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The Independent
24-05-2025
- Business
- The Independent
Is it legal for Croatian restaurants to offer a discount for paying with cash?
Q We are on holiday in Croatia. In every bar and restaurant, we are asked whether we are paying by cash or card. We thought it was just so they could get the card machine ready. But one restaurant openly told us there is a 5 per cent discount for cash. Is this legal? Julie P A I shall look at this '5 per cent off for cash' transaction through the opposite end of the telescope. The restaurant is effectively saying: 'We charge 5.26 per cent more for paying with plastic.' (Trust me on the numbers, please.) That is definitely not legal. The European Union tells traders across Europe: 'You're not allowed to charge your customers extra for using a credit or debit card.' One reason the EU can make this demand is because it limits the commission that financial institutions can slice from each transaction. This is in marked contrast to the US. Surcharges of 3 to 4 per cent are widely applied for paying with plastic, reflecting the fees businesses must pay to credit card providers. One restaurant in Oyster Bay, Long Island, even prints menus with dual pricing. So what is happening in Croatia? I shall begin with a couple of benign possibilities: that the restaurant needs a cash-flow boost to pay staff wages. Getting your payment immediately rather than waiting a week or two for the bank to hand it over will help. Or perhaps the proprietor just loathes paperwork and prefers to deal only with cash. I suspect, though, that the real reason is to conceal from the tax authorities the true revenue of the restaurant. That can be a strong temptation; across the Adriatic, the Italian authorities fought back against tax evasion by demanding that every customer of a merchant be given a proper tax receipt and must carry it off the premises. Doubtless, many visitors to Croatia are tempted to cut the cost of eating and drinking by taking up the cash offer – more so, I imagine, if they are citizens of nations where the euro is also the national currency. Whether or not you avail yourself is up to you. Just bear in mind that withdrawing cash from ATMs increasingly involves a commission payment that could wipe out the savings. Q Why do you have to be searched three times at Dalaman airport? Jon O A In common with other Turkish airports, everyone entering the passenger terminal at Dalaman on the Mediterranean coast is screened, along with their baggage, before proceeding to check-in. This arrangement is at odds with most airports in Europe, where there is unrestricted access for passengers and their baggage. The entry check was actually in place before the 2016 terrorist attack at Istanbul's old airport in which more than 40 people died. Since then, security measures for airport terminals have been stepped up. After check-in, passengers proceed 'airside' through the normal security checkpoint that every airport has. But passengers on flights bound to the UK – of which there are a substantial number – are subject to a third search at the departure gate. That is at the insistence of the Department for Transport and Infrastructure, the ministry responsible for aviation security. The extra check before boarding the aircraft was brought in at a time when there were serious concerns about terrorism in Turkey. For a time, both the UK and the US banned large electronic devices such as laptops and tablet computers from the cabins of flights from Turkey. The sudden ban appeared to be based on intelligence suggesting that bomb makers belonging to al-Qaeda in the Middle East had improved their skills and expanded their geographic spread. The authorities in London and Washington DC feared that would-be suicide bombers could try to bring down an aircraft with explosives concealed in consumer electronics. While that ban ended relatively quickly, the UK government continues to demand additional aviation security on flights from Turkey. Britain's biggest budget airline, easyJet, says: 'There is no requirement to come to the airport earlier than shown on your confirmation email, but please make sure you arrive at the gate as soon as your gate is announced.' Passengers are advised to ensure their personal electronic items are charged ahead of the check. 'If you cannot turn on your device, you may be required to travel without it or place your item for safe carriage in the hold,' easyJet says. Similar extra security measures are applied to flights from Tunisia, Jordan, Morocco and Egypt to the UK. Q A friend of mine has recently had an operation involving a general anaesthetic and says he has been told he can't fly for six months. Why is this? Shamus McF A Anyone who has a general anaesthetic is likely to have had some significant surgery, which presents some risk of the potentially fatal condition of deep vein thrombosis. There is some inconsistency about how long you should leave before flying again. I have not heard of a six-month grounding, but I dare say in some circumstances this would be appropriate. The Civil Aviation Authority offers something of a surgery tariff, saying: 'It is appropriate to allow one to two days following keyhole surgery and between four and five days for simple abdominal surgery. Major chest or abdominal surgery requires a period of approximately 10 days. Simple cataract or corneal laser surgery do not cause major complications and therefore 24 hours is an adequate gap between surgery and flying.' The Royal Orthopaedic Hospital in Birmingham tells patients who undergo serious work on the operating table: 'Avoid long-haul travel for four weeks either side of your surgery.' It adds: 'The risk of DVT within the general population is 1:1,000. This risk is increased with long journeys (more than four hours), particularly flying.' Patients are also urged to 'inform your surgeon of your travel plans' – presumably so that he or she can provide an opinion of the wisdom of making a journey soon after surgery, and possibly offer advice such as wearing 'travel socks' during the trip. Airlines are always keen to know if passengers have had recent medical treatment – bluntly, because they don't want to have to divert flights due to a medical emergency. It is worth talking to the carrier in any situation where health could be an issue at altitude. On a related subject, a reminder that anyone who has a plaster cast because of a fracture will not be permitted to fly unless the cast has been split for its entire length. This will allow room for the limb to swell when the air pressure drops. A letter from the practitioner explaining the injury and confirming fitness will also be useful. Q I saw you comparing fares on Ryanair and easyJet with British Airways from Edinburgh to London. Out of interest, how many people actually manage to get hold of Ryanair or easyJet tickets for that actual price? The add-ons as you move to the payment page mean that these starting prices are often wildly optimistic. Name supplied A The background: you are referring to my article highlighting an extremely high fare on British Airways for the few remaining seats on a mid-morning departure in four weeks. The 10.25am flight from Edinburgh to London Heathrow on Friday 21 June is currently priced at £1,183. This is 70 times the Ryanair fare for its morning flight to Stansted of £17; easyJet's cheapest trip to Luton is £19. As the article explains, BA prices those particular seats at a level that no one would rationally pay. The airline does not want anyone to book a seat just between Edinburgh and Heathrow. The aim is to keep space available for a late-booking, premium intercontinental passenger – who might spend £5,000 on a one-way flight via Heathrow to the Middle East or the US. The 10.25am departure uses a small A319 aircraft and has a lot of potentially lucrative long-haul connections. To answer your question about the other end of the price spectrum: plenty of people manage to buy Ryanair and easyJet flights at fares below £20. I have never found these starting prices on easyJet and Ryanair to be 'wildly optimistic'. You simply have to decline all the options you are offered during the online purchase journey: speedy boarding, baggage, advance seat selection, etc. Those of us who travel light and generally alone are well versed in dodging all the add-ons. To be sure of getting the best deal, book direct with the airline rather than through an 'online travel agent' who may add extra charges. But bear in mind that the small cabin baggage limit will be strictly enforced. Of that £17 Edinburgh-Stansted fare on Ryanair, the first £13 goes to chancellor Rachel Reeves as air passenger duty, and once airport charges are paid, the airline is looking at a loss. So, understandably, airlines are always keen to augment their 'ancillary revenue'.
The Independent
20-05-2025
- Business
- The Independent
Should I bring cash when I visit the US? Businesses hit tourists with 10% surcharge for credit cards
As tourists in the United States contend with high prices and an extreme tipping culture, another unexpected cost in the billing area has emerged: hefty credit card surcharges. During a five-day trip through Long Island, business after business imposed significant fees for paying with plastic. Others insisted on payment in cash – in the very nation that invented credit cards 75 years ago. Visitors to the US in the coming summer will need to take reserves of dollars in cash or accept a typical price hike of 3 or 4 per cent on meals, accommodation and other tourist services. The main driver of the surcharges appears to be the percentage deducted from the business's revenue by the financial institution. Credit card issuers in the US vie to attract new members with increasingly generous incentives. These rewards are funded by the cut they take from transactions. In the UK and EU, the 'interchange fee' that card firms may charge is capped at 0.3 per cent. But in the US, the only limit to commission is what the market will bear. In New York State at least, it appears a tipping point has been reached. Sometimes the arrangement is described as a 'cash discount incentive'. A bicycle rental firm in Montauk displays a notice by the till reading: 'This business has a cash discount incentive of 3.5 per cent. All goods and services are priced for cash payment. Purchases made with a credit card will receive a small non-cash adjustment, which will be displayed on your receipt.' Along the street, a busy and successful diner now insists on payment in cash. Further east in Oyster Bay, another diner has doubled the complexity of its menu by listing cash and credit card prices, with the latter showing a 3 per cent surcharge. A local garden centre applies a 3.5 per cent fee, shown on stickers with dual pricing. In these examples traders are upfront about the fee. But nearby motel simply adds a 2.99 per cent credit card surcharge to the quoted rate without warning the customer. While debit cards are supposed to be charge-free, it appears that some businesses surcharge any plastic. With sales tax and a minimum 18 per cent tip added to the cost of a meal out, a credit card surcharge of 4 per cent can push the extras above 30 per cent – to the point where the price quoted on menus in dollars will represent the final cost to the traveller in pounds sterling. Closer to New York City, the surcharge habit has been picked up by convenience stores – which typically add 10 per cent to the price of items, sometimes with a minimum credit card fee of a dollar or two. Large organisations such as the Long Island Rail Road, leading tourist attractions and big brands including Nathan's Famous hot dogs absorb credit card charges. However, British visitors who simply rely on their usual plastic payment card are likely to be hit by a foreign transaction fee of up to 2.99 per cent. Cards including Halifax Clarity and those issued by First Direct do not make such a charge. But withdrawing cash dollars from an ATM is likely to trigger a flat fee of $3.50 (£2.80). Rob Burgess, founder of the frequent-flyer website Head for Points, said he is resigned to paying extra for plastic. 'Personally, I would swallow the card fees,' he said. 'I don't want to be faffing around with fees for cash withdrawals, the potential costs of changing back unused money and the general grief that comes with paying in cash – not least because you quickly end up with a pocket bulging with coins because, when you add the sales tax, everything you buy comes to an odd total. 'I also find that I tend to overtip if paying cash because you never like to ask for change. If you're paying on a card you can add whatever percentage you want. If that means the bill is $43.34 then that's fine. If you were paying cash you'd probably put down $45 and leave it.' Tipping levels are steadily increasing, with some restaurants providing calculations of the gratuity based on 20, 25 or 30 per cent of the bill.
