I generally avoid credit cards but sometimes rare circumstances make checks or cash inconvenient. A contractor did some work for me. The contractor’s bill was essentially:

• $2500 if paying by credit card (actual result: I pay $2475, he receives <$2425)
• $2500 if paying by other means

It became stark how foolish that pricing is when I saw that I received $25 cash back. Most consumers are easily exploited as they foolishly think they are $25 richer – without thinking about the big margin the MitM took. It means the contractor paid a fee of at least $25 but likely much more¹. Surely he would have profitted more if I paid by other means, like cash. Why didn’t the contractor offer a discount of ~$25—50 for paying cash? I know some do but it’s not as common as it should be.

The merchant agreement generally bans traders from surcharging credit cards (which govs tend to ignore when they accept credit card and add a surcharge). But there’s a loophole for everyone: the rules do not ban giving a discount for other forms of payment. It’s perfectly legit for a merchant to give a cash discount so long as up-front quoted prices match what is charged to cardholders. They should be doing this more.

When a consumer pays by credit card, it would be good for transparency & awareness to print on the receipt: “credit card fee of $75 paid by Bob’s Roofing”.

¹ ~1% is a fee cap in Europe but in the US there is no cap so fees are often in the 3—5% range. So the US contractor likely paid at least $75 in fees.