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Extra credit card charges listed on menu

This is a new one for me.

Someone provided a link to a local restaurant on one of the regional boards. When I checked it out, I was amazed to see two sets of prices listed for each item on the menu, a cash price and a credit price. There appears to be roughly a $1 up-charge for each app, and as much as a $3-4 up-charge for each entree if you pay with a credit card instead of with cash. Holy cow. That could really add up if you had a party of 4 & ordered apps, entees & desserts for a party of 4.

Is this legal? Have any of you seen this before?

Here's the link: http://www.divanturkishkitchen.com/

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  1. I am a restaurateur. We accept cards in our establishment - and by doing so are bound by a "merchant agreement." MC, Visa, Discover, and particularly American Express all have a clause in their respective agreements that says that they may rescind my merchant privileges if I try in any way to sway people from using their card. This means anything from setting a "credit card minimum purchase," asking for cash, or imposing credit card pricing - as you describe. Gasoline stations get away with charging a "credit" price because their merchant agreement is different - the card companies make plenty of money off of them.

    Amex, in particular, has people whose sole job is to visit authorized merchants and check that they're adhering to their merchant agreement rules: they check that the Amex sign is on the door and at the cash register, they make sure that there's an imprinter to imprint cards that are de-magnetized and won't "swipe" in the card terminal, and they make sure that there's no "$15 minimum purchase on credit cards" signage.

    Someone's going to catch up with this. What they're charging for credit card purchases is enriching them; the card companies charge no more than 3.5 percent on their receipts. What they're charging the customer seems to be more.

    2 Replies
    1. re: shaogo

      Yep. Good post. I wonder why the restaurant in Q did not simply refuse CC's. Their upcharge seems to be a vendetta against CC companies taken out on the people keeping them in biz. Not too freaking smart of them.

      I refused to take AMEX or Discovery Card. Highway robbers.

      1. re: shaogo

        I don't know. I wonder if this varies by state or regionally, or it depends on how it is staetd. There are many, many gas stations in my area that offer two prices, one for cash, and one for credit, and have been doing so forever (so presumably the cc companies haven't been able to put a stop to it. "Discounts for Cash" just aren't that uncommon, in my experience, though granted I have never seen it in a restaurant (that said, it would be a lot easier to give in a gas station, where the pumps are all automated, than in a restaurant where someone would have to keep track of which is what)

      2. Except for one item: Soslu Patlican (Eggplant with Sauce); lightly pan-fried cubes of eggplant toppe with sauteed fresh tomatoe and garlic.

        Cash $5.90
        Credit Card $4.95

        Weird

        6 Replies
        1. re: Sam Fujisaka

          Nice catch on the typo. It would be amusing to get a separate check for the Soslu Patlican and charge it, and pay cash for everything else...

          1. re: Sam Fujisaka

            The Coban Salatasi (Shepherd Salad) too!

            Cash: Sm $7.90 Lg $10.90
            Credit Card: Sm $6.00 Lg $9.00
            Add Feta Cheese: $1.00

            Maybe that's their way of doing weekly specials :-)

            Seriously though, these are 20-30% premiums for using a card; way, way more than any processing fee from their credit services vendor. And what about the tip? If I pay with a card one night and then with cash the next for the exact same meal can I leave a smaller tip?

            1. re: kmcarr

              I think the additional markup has something to do with the way that cash sales, somehow, tend not to get taxed at the same rate that CC sales do...

              Philly, and South Philly in particular, has a lot of restaurants and other establishments that do not take credit cards. Yeah, BYOBs have tight margins to worry about, but there is more to it than that.

              1. re: barryg

                There is a big difference between a stated practice of not accepting CC's, and what this resto is doing.

                1. re: barryg

                  barryg - change the word "taxed" in your first sentence to "reported" and you'll get a very clear picture of why some restaurants do not take credit cards!

                2. re: kmcarr

                  Only if you leave the tip in cash.....

              2. Shaogo is right. Setting different prices or minimum prices for credit card usage violates the standard contract terms between restaurants and credit card companies... but my understanding is that the rule is very seldom enforced. I see minimum amounts of credit card usage everywhere in NYC.

                At least the restaurant is upfront about the different charges. I agree that the price difference is pretty hefty. You can avoid eating there if you want!

                5 Replies
                1. re: cimui

                  The restaurant is just being up front about their breach of contract. The price differences are indeed hefty and ILLEGAL if the resto has entered into a contract with the card companies (thieving bastards that they are.)

                  In the interest of multi-cultural sensitivity, perhaps the owners are not aware of the legal ramifications of this breach of contract. My brother spent some time in Turkey and restaurants there are a unique experience. The surcharges may be intended as a polite (albeit startling) incentive for patrons to pay cash without full knowledge of what their legal consequences may be. Maybe they could be informed in a proactive manner.

                  CP

                  1. re: Chefpaulo

                    yeah, definitely violates the contract. but unless there's special, local legislation that allows third parties to sue the restaurant for violating its contract with the credit card company (i don't know of any, but i don't claim to keep up with such legislation, either), customers can't really do anything, directly. they'd have to convince the credit card company to take action (or just do as shaogo did and write messages to the restaurant / take their business elsewhere).

                    1. re: Chefpaulo

                      Not ILLEGAL as in prosecutable by the man, just a violation of a civil contract that would have to be resolved in civil (not criminal) court.

                    2. re: cimui

                      It's also a difficult rule to report someone breaking without using your CC.

                      There's a specialty grocer in my hood that charges a 20% surcharge for CC use. The first time I came across it, I scraped together all my cash to pay for what I was buying, and never went back again. When I got home I looked up the rules (in NY state - it varies by state) and in order to report them, I would have had to send in a receipt showing the additional charge. Well, I wasn't about to spend that there, so oh well.

                      1. re: irishnyc

                        Oh, very interesting, irishnyc -- I had no idea that NY state had any sort of law about it. What happens to the contract-breaking merchant if they're caught red handed?

                        20% is potentially a lotta dough! (and if i were a clever, contract-breaking merchant, i wouldn't mark the credit card charge as an additional, separate charge on the receipt; i'd just increase the charge for each item.)

                    3. I think I'd check with the attorney general's office in your state and report them if they're in violation. And I would certainly never eat there. Sheesh.

                      1 Reply
                      1. re: c oliver

                        This is a civil and not criminal matter as it is between two parties in a contract. The attorney general's office wouldn't care unless statute law of some sort was broken - ie a state law forbidding dual pricing.

                      2. A state's attorney general, I'm sure, has bigger fish to fry. Contact your credit card company to make a complaint. (I _guarantee_ you that if you tell Amex they'll send one of their auditors to find out what's up.)

                        I had to laugh at all the typos people have noticed. The restaurant's not only greedy, but careless. I not only proofread our menu prints myself, but I give 'em to 2 others to proofread. That's because I made a serious pricing mistake on a menu *and* website once, and it created havoc (the customers wanted a steak appetizer for $2.95 and the price was actually supposed to be $12.95).

                        4 Replies
                        1. re: shaogo

                          All I can say is THANK YOU for proofreading your menus 3x before printing/putting up online. I cannot tell you how many times I see mistakes in menus with misspelled words. Drives me nuts. I can only imagine how the pricing error wreaked havoc on your restaurant until it was corrected!

                          1. re: LindaWhit

                            It drives me nuts when they misspell potato as potatoe. When I was a kid there was a restaurant up in Miami that advertised on TV. Part of the commercial had the owner talking while a list of their food/sides scrolled across the screen. They misspelled potato. I refused to go there when the family went out to dinner and would lobby heavily to go elsewhere. When it finally closed in the 90's (soooo many years later) the obit for it was written up in the Herald. I was in my own restaurant at the time and recalled my ire to the bartender. She was not as riled as I was... naturally... but I think it cleared up why I was so nutzo about the special board.

                            If you cannot spell it, do not serve it.

                            1. re: Sal Vanilla

                              They must have went to the same school Dan Quayle went to.

                              1. re: Sal Vanilla

                                potatoe is a valid, if archaic, spelling