Math Geek Mom: New Fees

When I teach Economics, I often find myself teaching about the effects of a tax on the supply and demand curves for a product. While a tax can be levied on a producer or a consumer, it is generally the case that the producer and consumer will each pay a portion of that tax in the end, once the equilibrium price changes in response to the tax. Indeed, the degree to which a consumer and producer share the cost of a tax depends on how willing those agents are to change their behavior in response to a change in price. In economic language, we say that who actually pays a tax “depends on the elasticities.”

I found myself thinking of this recently when I learned that merchants now have the opportunity to charge a fee to customers who use credit cards to pay for products.  It seems that fees previously paid by merchants can now be added to consumer’s bills, resulting in as much as a 4% increase in the current price charged for a product. This disturbed me, since I tend to use credit cards as if they were charge cards instead of cash. While the current price of products already reflects the fees charged to merchants, an additional fee over and above the current price is something I would like to avoid.  I know that there are ways to avoid paying this fee, such as using cash, but I find the potential loss of convenience annoying. And so I resolved that I would not pay these extra fees.

My first step in keeping this resolution is to ask merchants if they are passing along these fees, even before I shop for anything. My understanding is that if they do add such fees, they are required to tell you before you shop, but do not have to tell you what the fee is until you check out. It is interesting that so far I have not found any workers in the several stores I have visited who admitted to taking advantage of this potential change in policy. All denied that I would be charged such a fee, and one even said “oh, we never do that” Most had no knowledge of the possibility.

So far, this inquiry has not been a difficult addition to my shopping excursions, and so far I have not found myself needing to go to another store to avoid the fees. However, I did receive several confused looks from the employees I spoke to. I am curious about whether my readers have noticed such a fee being added onto the cost of their purchases when using credit cards.

But no look was more confused than the look I received from a man who was wearing a shirt that looked identical to the one worn by the employees at my usual supermarket. He was helping his wife as she checked out with their groceries, and could have easily been one of the employees who often come by to help customers like me work the self-checkout lanes. Luckily, I asked him if he worked there before I asked him if he charged an extra fee for credit cards. I was very glad that my daughter was not with me that time!

I suspect that I will need to revise my approach when I shop with my daughter, as she has reached the age where anything that mom does is embarrassing. For example, last week she asked me to come watch her at her basketball practice. Apparently, I did a few things that embarrassed her, such as standing in the wrong section (the moms always stand by the other door…) and, God forbid, clapping and cheering a little when she got the ball in the basket. Indeed, it seems that my clothes and my hair style are not measuring up to her standards lately. It was only a few weeks ago, when she told me “mom, would you PLEASE look younger.” I had trouble explaining to her that I am afraid that there are some things that one just can’t buy at the local grocery store, using either cash or credit, no matter what the price.