Apparently, the Westin Fort Lauderdale Beach Resort had been charging a 2% credit card surcharge, and after Marriott said they would put a stop to it, it became a 1% surcharge. Matthew points out that under Florida law, the hotel can legally do this. There were some bans on credit card surcharges several years ago, and then "cash discounts" were allowed instead, but apparently the distinction was ruled a first amendment violation.
Don't get me wrong. Small businesses with razor-thin margins are legitimately being crushed by credit card fees, often 2.5-3% and 30¢ per transaction, especially on small transactions like a cup of coffee where cash makes more sense. That $2 cup of coffee isn't making anyone any money if you pay for it with a credit card. That’s where I see credit card surcharges as reasonable, as long as they’re clearly stated in advance.
I even feel for gas stations, which in many if not most cases are small local businesses who don't enjoy the deep pockets of the oil company whose logo they've paid a franchise fee to show. Those mom-and-pop gas stations are only getting ten cents per gallon of the $2.89 we're paying while the big gas distributor companies, oil companies, and state tax agencies split almost all of the rest. Guess which portion the credit card costs come out of. Yup, the small shop owner's 10 cents, not the distributor's buck or the oil company's buck. I hate the high cost of a tank of gas, even as I've used far less gas this past year than any before, but it's not the local gas station's fault.
There's a local restaurant that's started saying the menu price reflects a cash discount, and there's a 4% higher charge if you're paying by card. At first, they were letting guests know about that only when the check arrived, and that's just not fair. The unpleasant surprise leaves a bad taste in people's mouths after a good meal. I'm sure some server tips suffered as a direct result. Yes, a small restaurant with slim margins is affected by those credit card transaction fees, and wanting to pass them along is understandable, as long as the business is up front about it.
But a hotel? They can’t possibly expect people are paying in cash for their several-hundred-dollar or even several-thousand-dollar stays, and a credit card surcharge (or the inverse of a cash discount, it doesn’t matter how you phrase it) on a hotel stay is not reasonable. Of course some guests will hand over a wad of cash or write a check, but that's not what the vast majority -- probably damn near 100% -- of guests is doing. They probably figure business travelers won't care, or even wealthier vacationers who'll casually pick a Westin resort might not miss the difference, but families who've saved up for a splurge should not be faced with the last-minute discovery that they're being charged a couple percent more than they thought they were.
I like the idea from one commenter on Matthew's blog post. Hotel springs a credit card surcharge or "cash discount" on you at the last minute? Go to the bank and get your $800 hotel bill in pennies and give them those. Without the wrappers.