Restaurants in New York charge extra for those who pay by card

For Mary Diedrich, a recent loose brunch on the Lower East Side turned into a frantic attempt to find cash when a 3% credit card bill came in, according to the New York Post.

“Please note,” read a sign in bright red in front of the Poco tapas restaurant, “All prices have a built-in 3% cash adjustment. “Purchases made by credit or debit card will be adjusted for cash and will appear on your invoice.”

Diedrich, 34, launched the Chase app to find an ATM and withdraw a few hundred dollars to pay for food. “I thought: Why do we have to spend this extra money? he told The Post. “Taxi fares have risen and if you can save a few bucks, you decide to save.”

Restaurants offer discounts of up to 10% on cash

Cheap nail salons, bodegas and pizzerias have long offered hidden cash discounts. But now luxury restaurants also offer discounts of up to 10% for those who want to carry hundreds of dollars to pay for a snack and a bottle of Sancerre. With ever lower margins, general inflation and rising credit card charges in 2021, U.S. merchants paid $ 137.83 billion to process payments. 24.3% more than last year. It is another way for restaurants to try to stay alive in difficult times.

“For these companies, everything depends on profit. “And credit card charges are one of the biggest and most annoying costs they face,” said Matt Schultz, chief credit analyst at Lending Tree.

“Credit card swap charges are often the third highest transaction cost for restaurants, after food and payroll,” added Brennan Duckett, director of technology and innovation for the National Restaurant Association. “So the prices on the menu are rising slowly. “And more and more consumers are seeing credit card charges as part of their bills.”

At the Peruvian restaurant Mission Ceviche on the Upper East Side, which has a $ 46 steak and a $ 165 tomahawk steak on its menu, the final invoices indicate that customers have a 3.50% discount if they pay in cash.

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Customers do not seem to be worried.

“It simply came to our notice then. We receive at most one complaint a week, “said Carlo Silva, chief waiter at Mission Ceviche. He said 95% of people still pay by credit card, despite signs hanging around the restaurant that say, “If you pay in cash, you will not be charged extra.”

Saving money on credit card charges could boost food prices, according to Mission Ceviche CEO and associate Miguel Yarrow.

“Everything is more expensive now – seafood, lamb, eggs, milk, all the ingredients we use,” Yarrow said.

The law also has no problems with practice. In 2019, New York merchants were allowed to charge extra for credit card purchases until clear prices were set, following a lengthy legal dispute. However, businesses are not allowed to refuse cash. After a number of restaurants, including Union Square Hospitality Group and Sweetgreen, switched to cashless models, City Council approved the practice ban in January 2020.

At the Lamia Fish Market on the Lower East Side, guests receive a 10% discount when paying in cash.

“I try not to raise our prices,” says owner Lamia Funti. “We remain the same, our profit margin is much lower – either that or you have fewer customers. It was difficult for everyone. “

However, Funti said that only about 2% of customers pay in cash.

Diedrich never found an ATM and ended up paying with her card for her brunch, swallowing a 3% fee. He said he was unlikely to carry a bunch of bills all the time in an increasingly dangerous city.

“I prefer not to travel around the city with large amounts of cash, especially if I use public transport,” Diedrich said. “Everything has a price to pay these days.”

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