There's a good chance you'll love making payments through credit cards, but many business owners would rather use cash, a debit card, or even a check. If you've encountered resistance to using a credit or debit card, you could wonder why certain stores or restaurants don't accept plastic. One of the main motives is cost, certainty, and the complex.

Processing Costs

Businesses are charged charges when accepting payments by credit card, typically in the form of a percentage of every transaction.

Slim Margins

It may not sound to be much, but many firms only make a modest profit from their products and services. Processing fees can eat away at the margins. Businesses can choose between a lower profit or passing the expense on to their customers. Many companies would prefer to avoid either option.

Debit Cards

Generally, debit card transactions are cheaper than credit card transactions. However, the owners of businesses may not realize this or discern the difference between credit and debit cards. Some companies throw the baby in the bathwater and demand everyone to pay in cash or by check to make things easy.

Minimums and Surcharges

Some retailers attempt to minimize the impact of swipe charges by imposing minimums for purchases with credit cards or by charging customers extra charges when using credit cards. Merchants aren't required to establish minimums or charge extra fees for purchases made with debit cards. However, there are times when merchants establish broad rules that apply to all credit cards.

Credit Card Rewards

Why is it that credit cards are so expensive? Credit cards have several advantages that aren't offered by debit cards. These include protection for consumers as well as merchants. Additionally, card rewards such as cashback and travel miles are particularly expensive for merchants. The benefits offered are limited to a small portion of users, and owners of shops pay for these advantages in the form of more expensive overall fees. From another perspective, you can see that all customers support reward card users by paying higher fees.

Taxes

Taxes are also a burden for entrepreneurs, and some companies prefer cash. With no electronic record of each transaction, it's much easier for businesses to overreport the total revenue and tax-deductible income (which isn't legal). This makes it difficult for the IRS to show that you're not reporting. This may be the case, but it's likely to be a case, not the standard, but it can happen.

Certainty of Payment

Cash is the king. If you pay cash, the business knows that you have completed your transaction, and there's no chance of the payment disappearing (as long as they have funds). The cash could be fake; however, it's very unlikely. Cash is immediately available to entrepreneurs to deposit or use.

Card Payments

If you make a purchase using a credit card, the process can take several days for your money to be available on the business's merchant account. Additionally, the transactions could be reversed within several months: If the credit card has been used to commit fraud or a client is dissatisfied with a service or product, the card issuers will quickly grant the chargeback.

Check Payments

Certain check aspects are more secure for merchants since it is more difficult for customers to claim refunds. Of course, anyone could write poor checks or stop payments on a check; however, when the customer's bank pays for the payment (which may take several weeks), it's impossible to pull the check back. Instead of pressing buttons or dealing with card issuers, they must follow a more "impartial" dispute resolution process.

Complexity

In light of the above issues, some businesses stay clear of cards completely. They may benefit from accepting credit cards; however, they're not motivated enough to tackle the obstacles and devise the ideal payment method. Companies often don't have to accept cards because they already have enough customers. This is a privilege enjoyed by businesses that have distinctive products that people enjoy. Imagine an ice cream stand with an influx of customers through the front door. The customers are already spending enough; there's no need to fix something already broken. It's becoming easier and less costly for businesses to take card payments daily.

Why Stores Don't Accept AmEx and Discover

Certain stores accept credit cards; however, they are cautious. Most stores take Visa and MasterCard; however, they may choose not to accept American Express and Discover. But, this is changing, and about 95% of retailers are now accepting each American Express and Discover card.

Customers are awestruck by the convenience of their AmEx or Discover cards. However, fees associated with these cards may be more expensive than regular Visa and MasterCard. Additionally, it could make it easier for consumers to challenge and reverse charges to the issuers. Most people with an AmEx card typically also carry either a Visa or MasterCard, which means they can use a different card to pay should they wish to. However, some cardholders are so loyal they claim they'll never do transactions with businesses that don't accept their preferred cards.