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Cash back on credit card transactions for customers

by biscodiva, Window Shopper

  • Created: May 13, 2012, 2:27 am
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4 comments
I occasionally give customers cash back on their credit card transactions so they don't have to run to the ATM. is there a reason tax wise or otherwise that this could come back to haunt me?
Tags: Discuss Popular Topics, Other Business Issues
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the loan finder | Window Shopper | 5/22/2012 - 6:55 am

The cash advance issue is the key one. When you draw cash from a credit card
interest is charged immediately. By allowing cash out as part of the
purchase, you're effectively allowing people to side step the instant
interest and therefore costing the card company money.
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CitiWideFunding | Window Shopper | 5/15/2012 - 1:22 pm

You should look into a terminal that incorporates this feature. Your credit
card processor may order a site inspection and you could be red flagged.
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BizResearcher | Window Shopper | 5/15/2012 - 12:59 pm

You may want to check with the credit card companies. My understanding is
that, if you do this often on a credit card (not a debit card), Visa and
MasterCard may consider that you are enabling people to avoid taking out a
cash advance on their card. A cash advance involves fees, so you would be
helping people avoid those fees and the credit card companies frown on that.
You don't want to compromise your standing with the credit card companies.

kellylynn | Window Shopper | 5/14/2012 - 3:29 pm

I haven't heard of any negatives reqarding tax issues.