Discover Cardholders: Restaurants & Wholesale Clubs in April-June 2023 Expired

Chase says activate q2 by March 15th, but doesn't list the categories yet?

The hell are they waiting for. There's literally less than 2 weeks to go

Thanks OP

Buy the Costco Shop card from Costco online and get the 5% ($75) in one go!

Note that it took 1-2 weeks to get the card by mail

Isn't the shop card considered a gift card which are usually omitted from Cashback?

First things first: basic math.

Getting 5% back after a 4% surcharge is added to a price actually nets you 1.2% back, not 1%.

For example, say something costs $100. Add a 4% surcharge, and it now costs $104. Get a 5% discount off of $104, and you pay $98.80. That is a $1.20 savings off of the original $100 price, or a 1.2% net savings.

Secondly, you may want to know that if you live in California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Puerto Rico, or Texas (which nearly half the country does - 42.2% of Americans live in one of these places), it's illegal for a business to add any surcharge for using credit cards.

And even if you live anywhere else in the US, it's still illegal for any credit card surcharge charged by a business to be greater than the processing fees that the credit card processor actually is charging them to process the transaction (i.e., even where they are legal, a credit card surcharge can only be used to cover the actual cost of processing the credit transaction - they cannot legally make a cent of profit off of any credit card surcharge they charge).

And since no credit card processor charges 4% in processing fees (they all charge a range of processing fees, with larger retailers with larger volumes being able to obtain lower fees, while smaller businesses typically get charged fees closer to the top end of the range - but even at the top end, no credit card processor charges 4%), that 4% credit card surcharge is likely technically in violation of the law.

Since Discover is the focus of the deal here, the processing fees they charged businesses as of the latest financial quarter ranged from 1.58% + $0.05 per transaction to 3.28% + $0.10 per transaction. So, even the smallest mom and pop restaurant can't legally be charging a credit card surcharge fee for Discover of more than 3.28% + $0.10. And since typically businesses that add credit card surcharges only have one surcharge rate regardless of the type of credit card used, if this restaurant accepts Amex too, Amex's highest processing rate charged last quarter was 3.15% + $0.10, so really that means the maximum surcharge they add for using credit cards should be no more than that. (Both Visa and Mastercard charge up to 3.29% + $0.10 on the high end, 0.01% higher than the Discover maximum.)

So, charging a 4% surcharge is almost certainly a technical violation of the law in almost any state (and 100% a violation of the law in the states I listed where credit card surcharges are completely illegal).

So you have a couple of options:

1. Eat at any of the countless other restaurants that do not add a credit card surcharge to their prices.

I'd strongly recommend this option, as it is by far the simplest. If you just HAVE to eat at a restaurant that charges a 4% credit card surcharge, you have to decide from a few additional options in how to deal with it:

2. Just accept the 1.2% you get back this quarter (better than 0%), and use debit/cash (or, ideally, use another credit card which offers high restaurant rewards year-round, like the Amex Gold card, which gives 4x MR points year-round at restaurants, and MR points have an average value of 2¢ per point if transferred to travel partners, so you effectively can get at least 8% back if you travel at all - which still results in a decent 4.32% net gain even after a 4% surcharge is added) during other quarters if you just HAVE to go to this specific restaurant.

Again, this is by far the simplest option if you must eat at only this specific restaurant for some reason, and what I would recommend you do if you still choose to eat at this restaurant knowing full well they charge a 4% credit card surcharge - you should simply accept the consequences of your choice to eat there.

Alternatively, you could choose from more confrontational routes if you really want to maximize your savings and think it's worth your time:

3. Attempt to get the surcharge "waived" for almost certainly (and 100% certainly if you live in one of the aforementioned states where such surcharges are entirely illegal) being a higher credit card surcharge rate than is allowed by law.

The best way to do this is typically to ask to speak to the manager/owner privately. Speaking to them privately gives a much higher chance of success, because they will be more willing to agree to waive the surcharge for one customer, but if you make the request publically around other customers, they are less likely to waive it for you, as they don't want to have all their other customers to then demand for the surcharge to be waived for them too since they saw it get waived for you.

When speaking with the manager/owner, politely inform them that you believe they are charging such a high credit card surcharge (or any surcharge at all in the aforementioned states where surcharges are illegal - in such a state, this approach should easily work) that it's almost certainly a violation of the law, and you would like for it to therefore be waived for you.

To bolster your case, you may want to bring with you a copy of your state's regulations if you live in one of the states that have regulations making credit card surcharges illegal, or a copy of the federal regulations that prevent businesses from charging a credit card surcharge than is any greater than what the cost is to the business to process the credit transaction. Especially with small, independent restaurants (or even sometimes with a larger restaurant chain that uses a franchisee model, where each individual restaurant is owned and operated by its own franchisee/owner, rather than owned by corporate management themselves), the owner may legitimately not be aware of the relevant regulations governing this.

Usually, this will be enough, but if you get pushback, you may have to insinuate that if they are unwilling to waive the surcharge for you, then you will ask the relevant state regulatory body to investigate their credit card surcharging practices to determine their legality. But, I'd have to imagine if you are such a regular at a restaurant where their credit card surcharge ruins a deal for you that works at ANY restaurant, they'll probably be very willing to accommodate such a frequent customer to avoid losing you.

4. Actually report the high credit card surcharges being charged by the restaurant to the relevant regulatory body in your state for investigation. Eventually, the restaurant will likely have to lower or drop their surcharge rate, depending on where you live, although that's a bureaucratic process that can take a relatively long time, so it probably won't help much by next quarter when Discover is offering 5% back on restaurants.

Normally, I'd say this probably isn't worth the hassle, but if you eat at this restaurant so much that their surcharge ruins a deal for you that works at ANY restaurant, this could be something to consider if you aren't able to get them to waive the surcharge for you with the previous strategy, as it could save you significantly in the years to come if they are forced to lower/drop their surcharge permanently going forward.

What do you use your Visa cards on?

You're new to this aren't you?

There was even a court case about this. Anikeev v. Commisioner ​

Discover will start collecting info on purchases done at guns stores. If you value your second amendment rights, dump this company.

Discover will start collecting info on purchases done at guns stores. If you value your second amendment rights, dump this company.

Any purchases, even ones not made with a discover card? What kind of "info"? Have a source for this?

https://www.reuters.com/business/...023-02-17/ [reuters.com]

This is a very specific case where the rewards were income because they weren't buying good/services and getting cash back on it. They were essentially buying cash and getting cash. Completely irrelevant to 99.9% of people getting CC cash back rewards.

I guess I fail to see the issue, are you assuming everyone else won't do the same (the article says many already have without an announcement). They aren't collecting any information other than the merchant code of "Gun Store".

Also, if you don't want your gun purchases tracked in this way, just pay cash. However, a gun purchase will always be tied to an individual. You can't buy a gun anonymously.

Curious what your issue with this is, exactly, other than it's a change.

I guess I fail to see the issue, are you assuming everyone else won't do the same (the article says many already have without an announcement). They aren't collecting any information other than the merchant code of "Gun Store".

Also, if you don't want your gun purchases tracked in this way, just pay cash. However, a gun purchase will always be tied to an individual. You can't buy a gun anonymously.

Curious what your issue with this is, exactly, other than it's a change.