Card Handling Fee

[altis]

I've seen a lot of this sort of thing recently when paying by credit card:

'I accept that 2.5% of the above price is paid to xxxx Financial Services Ltd as a card handling fee'

Anyone know why?

[duncant403]

Originally posted by altis
I've seen a lot of this sort of thing recently when paying by credit card:

'I accept that 2.5% of the above price is paid to xxxx Financial Services Ltd as a card handling fee'

Anyone know why?

It was an attempted VAT scam. The stores believed (so I read) that the handling fee portion of the transaction was VAT exempt and so by specifically stating on your receipt the amount of the price you paid that was for the handling fee they could save on VAT. But the Inland Revenue has confirmed that this is not the case and they still have to pay VAT on the full amount. I guess the stores just can't be bothered to change their software to take that note off again...

(The only concern I have is if you had to take a product back as faulty, would the store refuse to refund the "handling fee" as that part of the transaction was without any problems?)

[altis]

Thanks - perhaps I should read my VAT Notes more carefully ;)

[bob_builder]

Originally posted by altis
I've seen a lot of this sort of thing recently when paying by credit card:

'I accept that 2.5% of the above price is paid to xxxx Financial Services Ltd as a card handling fee'

Anyone know why?

I believe that it is to make you aware that not all of your money is going to the store. Currently it states something along the lines of "the total amount paid is tha same however you pay".

What worries me is that there are moves to stop credit card companies charging so much for transactions. This has already happened in Australia, I believe, and there, people are starting to have to pay the 2.5% on-top of the normal price. In fact, this is already happening in this country on holidays, PC accessories, etc. so it might get worse! :(