Pelletsales.com Credit Card Fees

[tflight]

Has anyone called pelletsales.com to ask about their "processing fee" for credit cards? Merchants, through their agreements with the various credit card companies, are not allowed to charge a fee for people to use credit cards. pelletsales.com is doing this, as seen by their "processing fee" that gets applied at checkout as well as this statement in their FAQs:

Why do you charge extra to use credit cards?

Our credit card processing company charges a 2.75 percent fee for all credit card transactions.

While their price is still competitive, it isn't that much more now for me to buy from someone local with a good quality pellet I like, so I'll probably pay the little bit more and buy local.

My understanding is that a store can offer a discount from the advertised price for cash, if they desire. However they cannot charge a fee on top of the advertised price towards people who choose to pay by credit card. So yes, theoretically they could raise the price of all products by 2.75%, then offer a discount from those prices for people paying cash.... and effectively be charging the same price. You can read about this in (broken link removed) (MasterCard has similar wording).

No Surcharging - Always treat Visa transactions like any other transaction; that is, you may not impose any surcharges on a Visa transaction. You may, however, offer a discount for cash transactions, provided that the offer is clearly disclosed to customers and the cash price is presented as a discount from the standard price charged for all other forms of payment.

I'm not trying to raise a big stink and through my reading here most people seem very happy with them. But the extra $34 for something that is against the rules will likely cause me to not place the order and purchase locally.

 

[Lousyweather]

They do it because they can. Youre right though, in that a consumer has to factor in ALL costs when purchasing over the 'net....including fees and delivery.......

 

[tflight]

because they can.

If by that you mean "because so far they are getting away with it", then I agree. But according to Visa "they can't do that".

 

[richg]

When you factor in delivery charges, pelletsales is no more cost effective than several local hearth shops. I already have plenty of fuel for the 2009-2010 heating season, so they have pretty much lost me as a customer due to excessive delivery charges and processing fees.

 

[Lousyweather]

because they can.

If by that you mean "because so far they are getting away with it", then I agree. But according to Visa "they can't do that".

can, and have been for a couple years now, right?

 

[Lousyweather]

When you factor in delivery charges, pelletsales is no more cost effective than several local hearth shops. I already have plenty of fuel for the 2009-2010 heating season, so they have pretty much lost me as a customer due to excessive delivery charges and processing fees.

agreed, 100%, but Pelletsales does often make pellets available where they otherwise wouldnt be available. Bottom line: the savvy consumer does his/her homework.

 

[defield]

At the risk of "setting off" some fellow "pellet heads", there is, I think another way to look at the pelletsales.com credit card charges.

My take is that they are attempting to offer pellets at the lowest possible prices ( for them) and still remain a viable company.

If purchasers prefer to pay by personal check, there is no additional service charge.

In my case, after reading all of the threads I could find about price predictions for the coming heating season, I opted in on an early Spring buy which, for a brief time, offered free shipping.

I purchased in late January for an April delivery.

I could have paid by check and saved a $22.00 ( and a few cents) credit card use charge. Rather than tie up my money for 2 to 3 months by paying by check, not to mention being concerned about prepayment on goods not delivered, I felt that the charge was a reasonable cost of doing business and protecting me since the card is not charged until the pellets are delivered. ( All that happens is that pelletsales.com checks with the credit card company to verify that the card is good for the amount of the purchase, but the card is not charged.)

I would also suggest the thought that by doing this, PelletSales is not charging a hidden cost to all customers, just passing on a cost they would have to pay the credit card companies for those who do not wish to pay by check.

 

[tflight]

PelletSales is not charging a hidden cost to all customers, just passing on a cost they would have to pay the credit card companies for those who do not wish to pay by check.

Which is in violation of their agreement with the credit card companies.

I'm not suggesting the charge is hidden/sly or that it done with anything but honorable intentions. I've never done business with them so I've got nothing good nor bad to say about them. I'm just saying that it is against the rules they agreed to by accepting credit cards, and in some states is illegal.

 

[Shane]

tflight is right, what they are doing is not on the up and up. Justify it all you want, when you sign that merchant agreement you say you'll not do that, and they are. Black and white.

 

[stoveguy13]

You cloud look at it from the other end as well they are charging you less if you send a check it is not another charge but a discount for using a check and there is nothing wrong with. people ask for cash deals all the time and i dont see anything wrong with what they are doing if you dont like the pricing then buy it from another place it really is not a big deal.

 

[Shane]

I look at it this way. A merchant should not pay a red cent to accept a credit card. If merchants refused credit card companies then credit cards don't exist right? I know that the common take is that a merchant who pays to accept credit cards is getting sales they otherwise would not have gotten because customer didnt' have cash in hand, but I have a feeling that the cc co would fold if enough pressure were exerted on their existance.

 

[kilbury]

second that, people are always asking for deals. Cash discount should be brought to peoples attention before the sale so they know they have that option, again I say option cause ultimately it is up to the customer. There is no breach of contract for offering a cash discount, but a business cannot say we charge more for using plastic. I've been down that road. Also consider the crazy interest rates they are getting out of the people who can't/aren't paying off the cards. So they are gettin a cut on the front and back end. That's as bad as the mob, oh wait I meant the goverment

 

[jtakeman]

They are charging a prossesing fee, Isn't that enough! I used to sell stuff on eBay and they would pull your listing if you tried that. Not a fair practice.

jay

 

[Lousyweather]

I find myself agreeing with Shane and BoF.....but then, Im a merchant. Maybe offer a discount for cash or check....and Im even hedging on a check. Cant add a fee, but we can discount for cash! As a mechant, though, we cant ignore the credit card......its far too common, in fact more common than cash now.....so, by not accepting it, we'd stand to lose alot of business......and thereby make the pooly-run, usurious credit card companies richer

 

[kilbury]

you would think that would be what the processing fee was for or they could include the cc fee in that if you were paying with plastic, i.e. processing fee is more if paying by card, leave the processing fee as a variable type charge. I have never had any experience with pelletsales.com beyond glancing at their website and talking with them at trade shows. The old saying is "cash is king" but may soon be taken over by the plastic prince! Lousy is right, the way people and banks work today credit card are a neccesary part of doing business.

 

[defield]

Just to let the Hearth.com members who are unhappy with pelletsales.com's practice of charging a processing fee for purchase by credit card know, I sent them the following e-mail:

You folks should be aware that there is a thread going on, on the hearth.com website, which you co-sponsor, about the processing fee you charge for credit card sales ( URL below). I have no problem with what you are doing and have defended it as "The Old Ranger", but thought you should be aware in case someone from the company wishes to answer the critics.

The last time there was a forum question about pelletsales.com, I forwarded a link to the thread to them and one of the owners posted an answer.

Lets see what happens this time . . . . .

Again, and at the risk of angering fellow members, I have no personal knowledge of the contractual arrangements PelletSales has with the credit card companies, but personally have no problem with what they are doing. Wish more businesses would ( or could ) do that and I would use cash or checks more often, but WOULD NOT HAVE in this case.

 

[tflight]

I have no problem with what you are doing and have defended it

The question isn't "do you mind paying the fee?". The question is "are they allowed to do it?".

I have no personal knowledge of the contractual arrangements PelletSales has with the credit card companies

You can contact Visa and/or MasterCard and ask them. I did. Both told me that the "processing fee" for credit card transactions violates the merchant agreement. MasterCard pointed me to this website where you can report violations under the "The merchant/retailer is adding a charge for using your MasterCard card" item.

All they have to do to be in compliance is to raise all of their prices by 2.75% and then offer a discount for cash & checks. The net price would be the same, the difference is in the advertised price.

Stores don't have to accept credit cards. But if they choose to accept them then they need to follow the agreements they sign as a merchant.

 

[rowerwet]

How is this different than the gas stations that give you the lowest price for gas if you pay cash? (there are a few around manchester, NH and it is worth it)

 

[tflight]

How is this different than the gas stations that give you the lowest price for gas if you pay cash? (there are a few around manchester, NH and it is worth it)

The difference is that they are offering a discount from the advertised price for cash. They are not adding a surcharge on top of the advertised price for credit cards. The credit card companies say that you can't charge more than the advertised price because someone wants to use a credit card.

So pelletsales.com could offer a discount for cash from their advertised prices and be in the clear. But they don't. If you pay with cash you still pay the advertised price. At the gas stations you mentioned you're getting a discount for cash as opposed to a fee for paying with a credit card.

 

[stoveguy13]

i just went on there site and dont see the fee any place it is just a cash dicount now so i guess it doesnt really matter anymore they have already changed it.

 

[jtakeman]

Wow,
That was fast.

 

[tflight]

i just went on there site and dont see the fee any place it is just a cash dicount now so i guess it doesnt really matter anymore they have already changed it.

I still see it. You need to go to the checkout screen (you don't need to submit the order). For mine it says "(waived for payments by check) Processing Fee: $33.92".

Also on the FAQs page ( www.pelletsales.com/learn_more/pellet_faq.aspx ) it still shows the credit card fee of 2.75%

 

[defield]

I do not have any doubt that TFLIGHT is correct. Just do not like it.

The part that bothers me the most is that the credit card companies, because of the current consumer structure, have the power to dictate terms like that to the business owner and then charge incredible interest fees to those who often can least afford them.

Won't change because some of us don't like it as a business practice, but it seems, as someone already mentioned, the credit card companies have things going their way, pre and post purchase.

I for one will NOT be reporting PelletSales to the credit card folks.

 

[defield]

Stoveguy13,

Re your post: "i just went on there site and dont see the fee any place it is just a cash dicount now so i guess it doesnt really matter anymore they have already changed it."

I just checked their site for my ZIP code and the processing fee is still there.

Perhaps they are leaving it in my ZIP code area, for my viewing pleasure, because I defended their alleged illegal practices . . . . ( JUST KIDDING . . .)

Ranger

 

[stoveguy13]

ok it is on the check out screen guess i should have gone deeper because it use to be on were you see prices. sorry . i still dont see the big deal with it is from my stand point unless you work for visa or another credit card company did they do something to you tflight?