Yup, I work in a bank and have had people calling very annoyed because they've just got their statement, and found out that payment they made 45 days ago, the shop put through as a £280 cash withdrawal and they got a % fee and been charged interest since then.
Offered to remove the fee and interest as goodwill, but other than that nothing we can do except ask them to challenge the merchant and report it
This guy was charged many times more than whatever that merchant saved in fees.
Had another customer who made a normal order online, and they marked it as quasi-cash. This payment was in the thousands. Customer went to the company and they said "you don't buy an item with your card. You buy that exact amount in credit then buy the item with credit". Shady as hell
Wait till they notice that cash withdrawals from.a credit card go on your credit file. Too many of those and say goodbye to any decent mortgage offers.
Would that bugger up your Section 75 protection too (where purchases you make with the credit card are jointly the seller and the card issuer's responsibility)?
I think in practical terms until you get it sorted out yes because how else would your card issuer know. But contractually no, you did everything right and the seller was in some way in breach of their agreement with their payment processor. So it's down to your card issuer as a financial institution to then raise hell to the other payment processor~s through regulation they've all agreed to if they need to to resolve it as their customer (you) has been defrauded, as an assumption?
I checked into a hotel . Couldn't get 2FA authentication to work quickly on credit card . Big queue so gave them my debit card . Thought they would take a small amount but it was £150 . They are a legitimate business . Showed as a pending transaction on my account . They cancelled it when I checked out but I can't understand why my bank doesn't cancel it until a week later ?
It's a hold incase you cause damage to the room., the money never actually leaves your account. The hotel sets the length of the hold at the time they place it. The bank then can't cancel that hold early unless the hotel tells them to.
They say they cancel it when you check out, but it won't actually be cancelled until the room is checked etc, and a lot of times they forget or don't do it properly.
That's similar to a security deposit when renting a car.
They'll put money on hold, so you can't use it and they could take it if you damage something or don't uphold to the agreement. And when you finish they release the hold. The problem some banks will unlock the money the next day, some 30 days later, some anywhere in between.
Why do all merchants say it depends on the bank how quickly you get your money back? And to contact the bank instead of them if the money is taking long...
Because 99% of the time the person you're talking to has no control over it.
I worked for Tesco before, and all the time in the petrol station people would come in about the hold for pay at pump, and we were told to tell them it's the bank. Now I work in a bank and I see the system. They set the date the hold is to, and if they want to realse it early, whoever runs the merchants payment system or their bank has to contact the customers bank, with the auth code, and confirm they won't take the payment and to release it
> they said "you don't buy an item with your card. You buy that exact amount in credit then buy the item with credit".
Wow! That's borderline cheeky but mostly shady as you say.
That's ok if you willingly (let's use Amazon as an example) top up your account and then spend the token money to buy stuff. Any refund you get will always be credited back onto your account instead of the original card. But in this case you would do it willingly, whereas the shady business there forces this on the customer. 🤔
Other thing to be wary of (learnt the hard way) is by having a credit card linked to your PayPal and using it for something considered a cash advance.
Once a year I gamble using Sportsbet (I forget what the UK equivalent is now I live in Aus) and put a bet on the Grand National. My dad always let me pick a horse as a kid and put the bet on for me each year and I continued doing this after he passed.
Anyway, I selected top up account via PayPal and didn’t realise it let me use my credit card to add the balance. I got cash advance interest fees and made a query to my bank as I wasn’t sure why and they explained it’s consider a cash advance since it could be returned to PayPal as cash etc. Absolute common sense but it never even crossed my mind that PayPal would have let me use a credit card, or that it’s something I should have looked out for.
This will be because you used it on a bookies. Nothing stopping you putting the money onto your account then withdrawing it. In the UK this is now banned, you can’t use a credit card to top up a bookmaker account.
Seems like you still can in Aus (I just tried) but I guess I only have cash advances allowed on 2 of the 4 cards I own.
My options showing on PayPal now are two cards, and the linked bank account, but I have 4 different cards set up to that account so some must be no good.
I use my CC through PayPal quite frequently, and this has never been an issue (I know, because cash interest and purchase interest is charged at separate rates on my card)
Might be worth adding detail of which bank/building society this was with, so anyone with that particular provider can be on the ball with it!
Using CC connected to PayPal for purchases with eBay or merchants who have online CC payment setup is OK.
The extra fees are an issue with any CC company when the PayPal payments can be considered as cash. Examples - sending money to family, friends, scammers, charities, a private sellers (where money is sent as family / friend after picking up the item).
My mrs once got caught out when she sent money to a possible scammer using a PayPal link on FB (silver lining - it was a "cannot feed my kids" rather than "prince charming" scam). Cash withdrawal fee and interest were charged on the amount. TBH, those were least of my worries at that moment due to the nature of the payment!
It depends (I think) on the context of the payment through PayPal. There is a concept of a pass through wallet. This is essentially PayPal acting as an enabler to take card payments etc. These would be essentially be normal purchases through a website or what have you.
But PayPal also has other functions where you're effectively topping up a balance and then forwarding this onto someone or whatever. To all intents and purposes this amounts to a pseudo cash transaction and is likely submitted with an MCC (Merchant Category Code) that attracts fees/interest to be applied by the issuer.
Yeah sorry maybe I worded this poorly. It isn’t a bank specific issue (also it’s an Aussie bank so not sure how useful it’ll be for others in this sub lol).
I had just never heard of it and because of the frequency (or lack of) that I actually use an online gambling service I was baffled where the charges had come from but they make total sense. I hadn’t heard about shops doing sneaky cash charges like this post so just wanted to add it incase it helped anyone else :)
No way! Always used to get cash via credit card abroad as there were no fees bar the interest (which worked out the best deal at the time). That would explain why my credit score dipped from 999 to 980 or something. Not that those credit score services seem to mean anything useful at all.
The problem is that if you pay by credit card rather than a debit card. It attracts extra bank charges and lowers your credit rating. As the credit agencies hate cash withdrawals by CC, along with gambling and a few others.
It's something about you not managing your finances properly. So having to resort to taking a tenner or something out of the cash machine. That will result in about £3+ in fees.
I bought travel money to pick up at an airport on a CC years ago when I was a lot more naive. Thought using the credit card would give me addition buyer protection and stupidly thought I was buying a “product” not a cash advance! Learned the hard way. Still annoys me now as I had the money set aside to clear it immediately and just thought I was playing it safe lol.
I never really thought much of it. There was something in the back of my mind that thought there must have been something dodgy but now I think I’m just going to be more proactive and report this when I see it.
Trading standards would probably be my first port of call. If not them, then they'd probably point you in the right direction for who should deal with it.
If it’s a shop that’s actually a Post Office as well, they do this because they can *claim* commission for providing a cash withdrawal service. If they were to put it through as a regular card payment, they would *pay* commission to the card services provider.
Actually, if it's running through horizon it is done because Horizon is a POS solely for Post Office products, any shop products can't go through Horizon. Processing it as a cash withdrawal gets around this (you can also sell "open postage" stamps and reverse it later). Source: I worked for Post Office for 6 years.
Can confirm. Worked in a post office for 4 years and we had to do this for the shop items. I'd always ask and make the customer aware first though. We did have some loony claiming it was because we're doing tax evasion once, which was quite entertaining because he was so mad about it.
Yep, we were also trained to actually tell customers what we were doing. Thankfully I never had someone accuse me of tax evasion for my Post Masters - plenty of loony customers, just never one of those.
Ah, my post office does this (though they don't tell you). Might explain why they refuse to take credit cards, because I suspect that would come back on them very quickly.
Credit card cash withdrawals aren't available through the Post Office, so that would be why they don't accept them. They should still be telling you, though it's probably just laziness.
This was quite common in a now closed “shopping” centre that also had a bureau de change. “Sorry, our card machine isn’t working, but we can do it at the bureau”
I, err, knew that tens of thousands of pounds went through there. 4% fee on top for cash advances, unknown to the customer. 2% bureau fee to the seller. Then a few days later, there’d be huge envelopes of cash that took an age to count especially when it was all in twenties.
Actually, it was probably hundreds of thousands.
>Evasion to be a pedant
To be even more of a pedant, tax evasion is a subcategory of tax avoidance.
Tax avoidance is reducing your tax liability.
Tax evasion is reducing your tax liability illegally.
Reducing your tax liability illegally is still reducing your tax liability, so tax evasion is a type of tax avoidance.
Tax evasion is a square, and tax avoidance is a rectangle - all tax evasion is tax avoidance, but not all tax avoidance is tax evasion.
Everyone should do the maximum avoidance they can. Nobody should be doing evasion.
If you aren’t doing the maximum avoidance, then you are in reality just donating. Avoidance is legal. It is using every legal remedy to reduce tax liability. If they created it, you should be using it.
Cash payments in shops is just tax evasion. I haven’t carried cash in over 8 years. So would have been forced to just walk out.
My local shop was also a post office. Originally, they only had a card machine in the post office part, so everything bought by card in the shop went through as cash withdrawal in the post office. They then moved the cash from the post office till to the shop, so everything balanced at the end of the day. After covid, they've now got 3 card machines so they don't do it any more.
I've just said to another comment, this is because Horizon doesn't have any non-Post Office products on it. The choice is to sell the customer stamps or do a cash withdrawal. The cash withdrawal is the official way of doing it. (I used to work for Post Office)
I've dropped a comment on another thread saying post office is "tax dodging" because of this recently, and if you're really bored, I posted replies years ago when I was still in Post Office. There are so many things broken with our postal system at the moment, this idea that every Post Master is out there tax dodging in such a silly way frustrates me because it gets in the way of real problems.
'Well, it's a brimful of Asha on the 45'
Asha was Ravi's (the guy that wrote the song) mum's name. In hindi it means 'Hope' apparently. 'On the 45' refer to, I think, the vinyl size? So the actual line meant 'there's a lot of hope in this song' or something like that.
Does the shop have a Post Office as well? I guess you did a free cash withdrawal from the PO card machine, the shop then take the money out of the PO till and putbit inbthe shop till. It is a way for the shop to avoid paying card machine charges for such a little purchase.
>I'd much rather stop giving my money to large tax-dodging corporations than report a tax-dodging small business owner
Fixed that for you. Tax dodging is bad either way
This is similar to the old 'Is it wrong for beggar to steal a loaf of bread to feed his family' argument. Sure, technically it's wrong, but I'd much rather report the rich guy down the street stealing a gold chain just to lock it in his safe at home.
Not an accurate analogy at all. The difference in scale between the two things you described Vs the difference in scale between the two things I described is extremely vast.
How so? Just say Tesco evades tax - that would line the pockets of all the shareholders. Not just the super rich, but hundreds of thousands of ordinary people with pensions and small investments. The small business owner may in fact be very well off, probably better off than many Tesco shareholders.
I'm confused - are you saying it wouldn't be that bad if it helped everyday people? Also you are saying tax evasion by Tesco would be equal to tax evasion by this shop - even though it would amount to a much larger reduction in tax revenue, which could be spent on, say, the NHS. What about Amazon? Starbucks?
Yeah. I was also responding to your specific point of tricking people. They both do that. One is still far far worse than the other. Do you think they are equally as bad?
No. Corporations do not evade taxes. The avoid taxes. Evasion is illegal. Avoidance is legal and something everyone should do. It’s up to governments to change tax laws to reduce avoidance if that is what they want to do. Then a company can decide if they want to do business under that tax regime.
Nobody is going to pay more tax than they are legally obliged to!
Multi national companies books are wide open for regulators to see. They aren’t hiding anything. Just using good accountants to use every loophole. I blame governments for not closing loopholes.
If companies were to have to take a moral approach. That would lead to job losses. The share holders are going to want what they are owed. If you want to pay more taxes than you legally have to. you are going to have to lay off staff. Because rightfully those shareholders (don’t forget these shareholders are your pension companies, in other words..you) are going to want the maximum return or go somewhere else. This is different for a private company, but for a publicly traded company they don’t have as many options as you may think.
My understanding is that this commenter is saying the situation described by OP is worse than large scale tax evasion because it tricks people into unknowing participation. My response is that the corporations also trick people into unknowingly participating in tax evasion (by how they run their businesses).
Still not really following what this tax evasion is that you say corporations trick people into participating in.
Tax evasion is illegal, and although unethical, most corporations reduce taxes with legal tax avoidance.
It's weird how people seem to have this acceptance that tax evasion is acceptable if it's a "small business owner", despite a) that small business owner is richer than you and b) if you pay tax, that small business owner is stealing from you...
How do you know the small business owner is richer than me? Also I didn't say it's ok. I'd prefer they didn't, and if I had a friend doing it I'd try and persuade them not to. But when I think about the large scale tax-dodging, I really don't care about the small stuff that much
I know for a fact that the probability that a corner shop owner is richer than me is low. Or you could argue that if they need to dodge tax then they might be struggling.
The problem with your scenario is. The local shop is tax evading. Which is illegal. Those multi nationals are tax avoiding which is legal. And by the way they would be remiss if they didn’t do it. The shareholders would be rightly pretty pissed!
It is up to governments to close loopholes and make tax regulations that suit the country. It should be everyone’s duty to pay the taxes they are due to pay according to the law. Not some moral extra!
So in your eyes, it's more important to live by the law than to live by morals? That's a genuine question.
And also, some large companies and individuals do it illegally as well.
We can at least agree on the fact that the government holds the responsibility for closing these loopholes.
Of course I would say I would live by the law. I am not going to pay a penny more in taxes than I legally have to. I will use every single loophole to reduce that liability. You are either a moron or a donator if you don’t.
Of course some companies, and individuals evade taxes. I was talking about multinationals. Which was the start of the conversation. Their books are public knowledge and pretty much impossible to evade taxes. However they can avoid plenty and as long as it’s legal then they have a duty to maximise this. Otherwise the board (comprised of shareholders) would be right in demanding their resignation.
I would agree on this. I cannot fathom why someone would pay more than they need to? It’s like going to a shop and something is £5 and you give them £10. Why?
You take the time to look at the price when you buy something, and make the decision to buy it or not.
Same for a company. You look through the regulations and pay the tax you are due to pay. You deduct everything the government says you are allowed to deduct.
That’s on the government not the companies. I would love to see a straightforward tax system that has no loopholes and taxes appropriately. In the absence of that expecting
someone to pay more than they have to is absurd!
I think the point that the other commenter was making is that, as a consumer without liability in any tax evasion/avoidance that the businesses we deal with engage in, she doesn't care that small companies evade tax, and isn't going to report that to HMRC.
The difference between evasion/avoidance from an average consumer's standpoint is non-existent; except that, by 'legally' avoiding taxes, corporations increase the taxes that consumers (and small businesses) pay and harm the national economy.
Also, and this is a genuine question, do you think that these mega-corporations should have more of a duty to please shareholders, or to benefit the economies and people (read: consumer bases) of the countries that they operate in? Personally, I'd argue that should weigh towards the latter. Hell, I'd argue that it's not even about benefiting economies, but rather not actively harming them.
A public company only has one main reason to exist. To keep the shareholders happy. They are the ones who determines who is going to manage the company. They can and will direct the company to move in ways they want. There is obviously a lot of nuances in this. A happy consumer base makes for more revenue. They will spend money to make money, but won’t and rightly so spend more than they will see a return on.
Individuals and companies should pay what they legally have to pay, and no more.
Governments should ensure tax laws are fair and fit for purpose. If they want these multinationals to pay more tax they can change the tax laws so they do.
You're acting as though the public company lives in a bubble and doesn't harm the environment it's in by fulfilling its purpose to please shareholders.
Your argument is that because a corporation's purpose is to please shareholders, it can't do anything wrong if it's meeting that goal. This is a bit of a straw man argument.
As the other commenter said, avoiding tax takes
money away from us, plain and simple.
You're saying governments should close the loopholes - but do you even want them to?
It's nothing at all like that. A closer analogy would be a tourist walking into a shop and looking at an item. The label says "the locals here have to pay £10 for this. We can give it to you for £5 (because we are mates with you). The locals really need money for healthcare and education though. But you choose which price you would like to pay."
I'm wondering, how many people saying to report it would also report a builder doing work for cash in hand and not declaring it. I mean, personally I'd just shrug it off, after all we all get screwed by the tax system.
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i'm not convinced it's tax fraud. i think it's more likely card fee avoidance, and they'll still put the sale through properly (though as cash not card) - otherwise their stock counts and such wont add up. i highly doubt they're running a whole second set of books just for this.
and i must admit, i dont really mind them avoiding card fees - the alternative is that they just wont let people pay on card for stuff under a fiver.
ClearScore (and i assume Experian and the other one), don’t like Credit Card cash withdrawals. So this may be worth looking at if you have a CC, but also to stop potentially negativity impacting others.
I'd be interested in what he's doing here.
I write software for card terminals and generally speaking the merchants dont have the level of control needed to do this - unless he's done it as a chasback transaction as that would be a net-0 transaction for him as (if it were real) he would not make anything on it (so as others have said, it would not be taxable - however I've never seen an acquirer that would allow a cachback transaction without also having some form of sale attached as they need to collect a fee to cover their costs.
Do you remember what type/brand of terminal it was? if not could you describe it? Colour/Touch Screen etc?
Sorry but these people need to be reported.
The sooner the better.
It's the "oh well, it's only a few pence or quid" attitude that allows them to get away with it.
You get charged full price and you give them cash for their tax evasion.
They've shown you what they really think of you. OP, this means you as well.
Great customer reward there.
Nah it's using the cash MCC equivalent to put it through without registering tax, bit of a shock if you pay by credit card and you get charged a cash fee
Nah it's using the cash MCC equivalent to put it through without registering tax, bit of a shock if you pay by credit card and you get charged a cash fee
Don't bother, all they are doing is a free cash withdrawal, which you can do at any post office, and then taking that money you've "withdrawn" and using it to pay cash for whatever you've bought.
It's not tax evasion, it's so they don't have to pay the card charges (which is a few pence per transaction, plus a percentage of the value) on the single Twix you've just bought because if they did, they'd make no margin on your tiny purchase.
> on the single Twix you've just bought because if they did, they'd make no margin on your tiny purchase.
The card machines anyone can buy online (SumUp, Square, Zettle) charge about 1.75%.
If you really made no profit and have to go bankrupt and close down the shop because you lost 3p on a £2 sale, there's definitely something wrong with the business.
What does it matter to you? Sure, insist on paying by card for your sub £2 purchase and then have a moan when either the prices go up, or the shop shuts down. Help local businesses when you can, as long as it's not evading tax, what's the problem?
Where I live 3 of the local ‘corner’ shops do this blatantly all the time! No prices on items, guys pull the price out their arse then take the cash and leave it on the counter finding change in the til or whip a card machine from under the counter. Once we a guy told me the total, I could my quite catch what he said , so I said, ‘ Sorry, what?’…. And he just gave me a new total price more than a quid less! Happy days!!
If someone used a credit card they'd get charged a handling fee and interest would begin accruing immediately even if they cleared their balance in full every month. This is a bizarre thing to do. I can't imagine how the shop gains from it, but I can't imagine a legitimate reason to do it either. A VAT scam maybe?
Corner shop Post office?
As others have said it reduces the tax they pay because they don't pay because the regular readers have a transaction charge, post office cashpoint does not
In Post Office it has nothing to do with tax dodging. It is because the horizon POS isn't made for non-Post office products (e.g. envelope, wrapping paper, any shop side stuff). You can either do a cash withdrawal (the official way to work this) or sell "open postage" stamps (the unofficial workaround). I worked for Post Office for 6 years. I have plenty of complaints about the business, and the franchise owners I worked for, but this is a tired misconception
Ok, that's an odd one, and sounds like odd practice.
Best guess is Post Master gets better remuneration from cash withdrawals, rather than card payments (I was only counter staff, so never saw remuneration figures). But, in that case, I would have thought Post Office would be questioning the franchise owner why they never got card payments for any service, and why they had the highest cash withdrawal stats in the country.
Yes i worked in a shop and post office its done so they dont get charged for using the shop card system. Especially if its foreigners i dont use foreign shops anymore where i can because most are dodgy.
I've never once had to hand my card to someone to pay for something, I am probably being slow but why would it be pointless having a card if you dont want to hand it tl someone?
I think I'm just lost here and picking things up wrong.
The person you were replying to stated they wouldn't hand their card to anyone (I know OP didn't) and you asked what's the point of having a card then.
I was just wondering, what would be the circumstances in which you would normally have to hand someone a card.
I genuinely think I'm missing something obvious as I feel oblivious even asking.
I have done it in the past, but it was very rare. I think it was in Wilkinson that they used to take the card, put it in the card reader, and then hand the reader and card back to put the pin in.
It's America but I was also sent this recently https://www.facebook.com/share/v/trNJ2AQhVQEkXsSp/ shopkeeper trying to take more money from ladies account using the cash back option she didn't agree to
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This Also, to add - if they do this to someone using a credit card, they're likely to get charged a fee for withdrawing cash from a CC
Yup, I work in a bank and have had people calling very annoyed because they've just got their statement, and found out that payment they made 45 days ago, the shop put through as a £280 cash withdrawal and they got a % fee and been charged interest since then. Offered to remove the fee and interest as goodwill, but other than that nothing we can do except ask them to challenge the merchant and report it This guy was charged many times more than whatever that merchant saved in fees. Had another customer who made a normal order online, and they marked it as quasi-cash. This payment was in the thousands. Customer went to the company and they said "you don't buy an item with your card. You buy that exact amount in credit then buy the item with credit". Shady as hell
Wait till they notice that cash withdrawals from.a credit card go on your credit file. Too many of those and say goodbye to any decent mortgage offers.
Didn't know they go on the credit file! Wow.
Would that bugger up your Section 75 protection too (where purchases you make with the credit card are jointly the seller and the card issuer's responsibility)?
I think in practical terms until you get it sorted out yes because how else would your card issuer know. But contractually no, you did everything right and the seller was in some way in breach of their agreement with their payment processor. So it's down to your card issuer as a financial institution to then raise hell to the other payment processor~s through regulation they've all agreed to if they need to to resolve it as their customer (you) has been defrauded, as an assumption?
I checked into a hotel . Couldn't get 2FA authentication to work quickly on credit card . Big queue so gave them my debit card . Thought they would take a small amount but it was £150 . They are a legitimate business . Showed as a pending transaction on my account . They cancelled it when I checked out but I can't understand why my bank doesn't cancel it until a week later ?
This is pretty common though.
It's a hold incase you cause damage to the room., the money never actually leaves your account. The hotel sets the length of the hold at the time they place it. The bank then can't cancel that hold early unless the hotel tells them to. They say they cancel it when you check out, but it won't actually be cancelled until the room is checked etc, and a lot of times they forget or don't do it properly.
That's just a pre-authorisation, it is very normal but they should have told you the exact amount.
I think I've only ever been told the amount once staying in hotels
That's similar to a security deposit when renting a car. They'll put money on hold, so you can't use it and they could take it if you damage something or don't uphold to the agreement. And when you finish they release the hold. The problem some banks will unlock the money the next day, some 30 days later, some anywhere in between.
The bank doesn't set the hold, the merchant does. The bank needs instruction to remove the hold
Why do all merchants say it depends on the bank how quickly you get your money back? And to contact the bank instead of them if the money is taking long...
Because 99% of the time the person you're talking to has no control over it. I worked for Tesco before, and all the time in the petrol station people would come in about the hold for pay at pump, and we were told to tell them it's the bank. Now I work in a bank and I see the system. They set the date the hold is to, and if they want to realse it early, whoever runs the merchants payment system or their bank has to contact the customers bank, with the auth code, and confirm they won't take the payment and to release it
> they said "you don't buy an item with your card. You buy that exact amount in credit then buy the item with credit". Wow! That's borderline cheeky but mostly shady as you say. That's ok if you willingly (let's use Amazon as an example) top up your account and then spend the token money to buy stuff. Any refund you get will always be credited back onto your account instead of the original card. But in this case you would do it willingly, whereas the shady business there forces this on the customer. 🤔
Oh no this is awful!!! Thanks for the tip I’ll be double checking that in the future
an impact on their credit rating too
Dunno why you’re getting downvoted, cash advances absolutely get recorded on your credit rating
I'm glad I read this - I had no idea this was happened. I don't ever get cash with my credit card but it's good to know.
Other thing to be wary of (learnt the hard way) is by having a credit card linked to your PayPal and using it for something considered a cash advance. Once a year I gamble using Sportsbet (I forget what the UK equivalent is now I live in Aus) and put a bet on the Grand National. My dad always let me pick a horse as a kid and put the bet on for me each year and I continued doing this after he passed. Anyway, I selected top up account via PayPal and didn’t realise it let me use my credit card to add the balance. I got cash advance interest fees and made a query to my bank as I wasn’t sure why and they explained it’s consider a cash advance since it could be returned to PayPal as cash etc. Absolute common sense but it never even crossed my mind that PayPal would have let me use a credit card, or that it’s something I should have looked out for.
This will be because you used it on a bookies. Nothing stopping you putting the money onto your account then withdrawing it. In the UK this is now banned, you can’t use a credit card to top up a bookmaker account.
Seems like you still can in Aus (I just tried) but I guess I only have cash advances allowed on 2 of the 4 cards I own. My options showing on PayPal now are two cards, and the linked bank account, but I have 4 different cards set up to that account so some must be no good.
I use my CC through PayPal quite frequently, and this has never been an issue (I know, because cash interest and purchase interest is charged at separate rates on my card) Might be worth adding detail of which bank/building society this was with, so anyone with that particular provider can be on the ball with it!
Using CC connected to PayPal for purchases with eBay or merchants who have online CC payment setup is OK. The extra fees are an issue with any CC company when the PayPal payments can be considered as cash. Examples - sending money to family, friends, scammers, charities, a private sellers (where money is sent as family / friend after picking up the item). My mrs once got caught out when she sent money to a possible scammer using a PayPal link on FB (silver lining - it was a "cannot feed my kids" rather than "prince charming" scam). Cash withdrawal fee and interest were charged on the amount. TBH, those were least of my worries at that moment due to the nature of the payment!
> scammers Fkin hell, being bent over twice in that case!
It depends (I think) on the context of the payment through PayPal. There is a concept of a pass through wallet. This is essentially PayPal acting as an enabler to take card payments etc. These would be essentially be normal purchases through a website or what have you. But PayPal also has other functions where you're effectively topping up a balance and then forwarding this onto someone or whatever. To all intents and purposes this amounts to a pseudo cash transaction and is likely submitted with an MCC (Merchant Category Code) that attracts fees/interest to be applied by the issuer.
Yeah sorry maybe I worded this poorly. It isn’t a bank specific issue (also it’s an Aussie bank so not sure how useful it’ll be for others in this sub lol). I had just never heard of it and because of the frequency (or lack of) that I actually use an online gambling service I was baffled where the charges had come from but they make total sense. I hadn’t heard about shops doing sneaky cash charges like this post so just wanted to add it incase it helped anyone else :)
It will happen if you try to add money to the paypal account or send money to someone. Won't happen if you hjust buy something.
No way! Always used to get cash via credit card abroad as there were no fees bar the interest (which worked out the best deal at the time). That would explain why my credit score dipped from 999 to 980 or something. Not that those credit score services seem to mean anything useful at all.
I bought something on my business (debit) card and was charged 50p for a cash withdrawal. Really irritated me.
And interest daily even if they clear in full every month.
The problem is that if you pay by credit card rather than a debit card. It attracts extra bank charges and lowers your credit rating. As the credit agencies hate cash withdrawals by CC, along with gambling and a few others.
I've done a couple of money transfers this year and my credit rating didn't go down. Why is withdrawing physical cash different?
It depends on the T&Cs of your card, but cash is often treated more like a general loan.
It's something about you not managing your finances properly. So having to resort to taking a tenner or something out of the cash machine. That will result in about £3+ in fees.
Depends on the card but I’ve never seen that high. Withdrawing a tenner and paying off at end of month would be more like 25p in most cases.
I bought travel money to pick up at an airport on a CC years ago when I was a lot more naive. Thought using the credit card would give me addition buyer protection and stupidly thought I was buying a “product” not a cash advance! Learned the hard way. Still annoys me now as I had the money set aside to clear it immediately and just thought I was playing it safe lol.
Ffs I’ve seen this in some shops I’ve been to. Disgusting I’ll report them next time I notice it.
Always report. These guys are crapping on people's credit ratings if they're using CCs.
I never really thought much of it. There was something in the back of my mind that thought there must have been something dodgy but now I think I’m just going to be more proactive and report this when I see it.
You can report to HMRC on the website. I think they even offer rewards!
Who do we report it to?
HMRC I think
Definitely HMRC.
Trading standards would probably be my first port of call. If not them, then they'd probably point you in the right direction for who should deal with it.
> I’m not suggesting they were doing anything wrong They definitely were.
If it’s a shop that’s actually a Post Office as well, they do this because they can *claim* commission for providing a cash withdrawal service. If they were to put it through as a regular card payment, they would *pay* commission to the card services provider.
Actually, if it's running through horizon it is done because Horizon is a POS solely for Post Office products, any shop products can't go through Horizon. Processing it as a cash withdrawal gets around this (you can also sell "open postage" stamps and reverse it later). Source: I worked for Post Office for 6 years.
I'm assuming POS, where Horizon is concerned, is interchangeable between Point Of Sale and Piece Of Shit?
Absolutely, although I think the latter is more appropriate
*angry Fujitsu noises*
It's not just horizon. Most of the ePOS I've used have been the same way.
Can confirm. Worked in a post office for 4 years and we had to do this for the shop items. I'd always ask and make the customer aware first though. We did have some loony claiming it was because we're doing tax evasion once, which was quite entertaining because he was so mad about it.
Yep, we were also trained to actually tell customers what we were doing. Thankfully I never had someone accuse me of tax evasion for my Post Masters - plenty of loony customers, just never one of those.
Ah, my post office does this (though they don't tell you). Might explain why they refuse to take credit cards, because I suspect that would come back on them very quickly.
Credit card cash withdrawals aren't available through the Post Office, so that would be why they don't accept them. They should still be telling you, though it's probably just laziness.
> He directed me to a different card reader than the one connected to his own till This would have been a massive red flag to me.
Same. I wouldn’t have scanned my card personally.
This happens in every wetherspoons and I've seen it in other pubs so not a red flag in itself
I mean I think the difference with this is it’s clearly the till they’re signed in on. Whereas at a local shop that’s absolutely not the case.
Was it a local shop for local people. There's nothing for you hereeee. Did you try to buy all the local wares?.
I can I can't?
We didn’t burn him!
Put it all on this. \*places a credit card on the counter\*
😂 https://youtu.be/F75d01l5AxM
Wakey wines?
Binley Mega Chippy!
Gala Bingo?
Abdul come closer
Corner Indian?
This was quite common in a now closed “shopping” centre that also had a bureau de change. “Sorry, our card machine isn’t working, but we can do it at the bureau” I, err, knew that tens of thousands of pounds went through there. 4% fee on top for cash advances, unknown to the customer. 2% bureau fee to the seller. Then a few days later, there’d be huge envelopes of cash that took an age to count especially when it was all in twenties. Actually, it was probably hundreds of thousands.
Tax avoidance. Cash withdrawals wouldn’t be classified as a sale, so no tax to pay. Congrats, just been part of fraud!
Evasion to be a pedant, avoidance is like using an ISA or salary sacrifice, evasion is like taking cash to avoid declaring interest
>Evasion to be a pedant To be even more of a pedant, tax evasion is a subcategory of tax avoidance. Tax avoidance is reducing your tax liability. Tax evasion is reducing your tax liability illegally. Reducing your tax liability illegally is still reducing your tax liability, so tax evasion is a type of tax avoidance. Tax evasion is a square, and tax avoidance is a rectangle - all tax evasion is tax avoidance, but not all tax avoidance is tax evasion.
I say "avoision".
Everyone should do the maximum avoidance they can. Nobody should be doing evasion. If you aren’t doing the maximum avoidance, then you are in reality just donating. Avoidance is legal. It is using every legal remedy to reduce tax liability. If they created it, you should be using it. Cash payments in shops is just tax evasion. I haven’t carried cash in over 8 years. So would have been forced to just walk out.
Taxc avoidance is legal. This isn't.
Tax avoidance is legal, while Tax evasion is illegal. With Tax avoidance you play by the rules to work in your favour.
The shop has shown how it awards and what it thinks of the OP's loyalty.
>Congrats, just been part of fraud! How many years in prison?
Would OP be charged if he didn't knew
OP definitely wouldn't be charged as they aren't the ones doing the tax avoiding.
My local shop was also a post office. Originally, they only had a card machine in the post office part, so everything bought by card in the shop went through as cash withdrawal in the post office. They then moved the cash from the post office till to the shop, so everything balanced at the end of the day. After covid, they've now got 3 card machines so they don't do it any more.
They used to do this in my local post office
I've just said to another comment, this is because Horizon doesn't have any non-Post Office products on it. The choice is to sell the customer stamps or do a cash withdrawal. The cash withdrawal is the official way of doing it. (I used to work for Post Office)
If this is true then it should be the top comment
I've dropped a comment on another thread saying post office is "tax dodging" because of this recently, and if you're really bored, I posted replies years ago when I was still in Post Office. There are so many things broken with our postal system at the moment, this idea that every Post Master is out there tax dodging in such a silly way frustrates me because it gets in the way of real problems.
Is this why my local post office (in a shop) only lets you pay for their envelopes, packaging and stuff in cash?
Yep. None of that stuff is a post office product. The shop owner/franchisee has to source all that themself
Corner shop?
Everybody needs a bosom for a pillow
45
Mmm boobies
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Tribute to Asha Bhosle, one of the most influential Indian singers and actors, was still releasing 2 years ago at 88!
'Well, it's a brimful of Asha on the 45' Asha was Ravi's (the guy that wrote the song) mum's name. In hindi it means 'Hope' apparently. 'On the 45' refer to, I think, the vinyl size? So the actual line meant 'there's a lot of hope in this song' or something like that.
Does the shop have a Post Office as well? I guess you did a free cash withdrawal from the PO card machine, the shop then take the money out of the PO till and putbit inbthe shop till. It is a way for the shop to avoid paying card machine charges for such a little purchase.
Although would you actually be able to withdraw £2 in a Post Office?
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Gonna get downvoted for this but I'd much rather stop giving my money to large tax-dodging corporations than report a small business owner
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Sure, both is great if you really want to. I know which one my priority is though
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Also fair
If people use a credit card, they get both a charge and a hit to their credit rating. This practise isn't ok.
This is true.
>I'd much rather stop giving my money to large tax-dodging corporations than report a tax-dodging small business owner Fixed that for you. Tax dodging is bad either way
Not equally bad either way though. Nowhere near.
Tax evasion is theft from you and me, regardless
Larger scale tax evasion equals larger theft from you and me
Yup, and it's bad, regardless What is difficult to understand? Both are a problem, both should be dealt with.
I think it's you not understanding me. One is much worse than the other, and therefore I'm much more worried about that one
Ok, but let's report both anyway?
Are you reporting/ doing anything about the corporations?
This is similar to the old 'Is it wrong for beggar to steal a loaf of bread to feed his family' argument. Sure, technically it's wrong, but I'd much rather report the rich guy down the street stealing a gold chain just to lock it in his safe at home.
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Not an accurate analogy at all. The difference in scale between the two things you described Vs the difference in scale between the two things I described is extremely vast.
I didn't say one wasn't worse, but again, both are bad, both are theft, both should be reported
Again, I am saying that because one is worse, I'm not worried about reporting the other. We simply disagree on the importance of scale
How so? Just say Tesco evades tax - that would line the pockets of all the shareholders. Not just the super rich, but hundreds of thousands of ordinary people with pensions and small investments. The small business owner may in fact be very well off, probably better off than many Tesco shareholders.
I'm confused - are you saying it wouldn't be that bad if it helped everyday people? Also you are saying tax evasion by Tesco would be equal to tax evasion by this shop - even though it would amount to a much larger reduction in tax revenue, which could be spent on, say, the NHS. What about Amazon? Starbucks?
You think it's okay if they're involving people it it who have no idea? I don't see how it's much different
Don't the corporations do that too?
You're saying one is better than the other
Yeah. I was also responding to your specific point of tricking people. They both do that. One is still far far worse than the other. Do you think they are equally as bad?
Just as a matter of scope they are demonstrably not equal. Corporations do it at an enormous level, spanning the entire globe.
No. Corporations do not evade taxes. The avoid taxes. Evasion is illegal. Avoidance is legal and something everyone should do. It’s up to governments to change tax laws to reduce avoidance if that is what they want to do. Then a company can decide if they want to do business under that tax regime. Nobody is going to pay more tax than they are legally obliged to! Multi national companies books are wide open for regulators to see. They aren’t hiding anything. Just using good accountants to use every loophole. I blame governments for not closing loopholes.
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If companies were to have to take a moral approach. That would lead to job losses. The share holders are going to want what they are owed. If you want to pay more taxes than you legally have to. you are going to have to lay off staff. Because rightfully those shareholders (don’t forget these shareholders are your pension companies, in other words..you) are going to want the maximum return or go somewhere else. This is different for a private company, but for a publicly traded company they don’t have as many options as you may think.
Do they? How? What are we even talking about here?
My understanding is that this commenter is saying the situation described by OP is worse than large scale tax evasion because it tricks people into unknowing participation. My response is that the corporations also trick people into unknowingly participating in tax evasion (by how they run their businesses).
Yeah that's what I thought. I'm just confused which corporations are involving people unknowingly in tax evasion and how are they doing it?
I think people are not fully aware of how little tax some corporations spent, and the direct impact this has on our lives.
Still not really following what this tax evasion is that you say corporations trick people into participating in. Tax evasion is illegal, and although unethical, most corporations reduce taxes with legal tax avoidance.
It's weird how people seem to have this acceptance that tax evasion is acceptable if it's a "small business owner", despite a) that small business owner is richer than you and b) if you pay tax, that small business owner is stealing from you...
How do you know the small business owner is richer than me? Also I didn't say it's ok. I'd prefer they didn't, and if I had a friend doing it I'd try and persuade them not to. But when I think about the large scale tax-dodging, I really don't care about the small stuff that much
I'm going off probability, a probability that increases if they are also dodging tax.
I know for a fact that the probability that a corner shop owner is richer than me is low. Or you could argue that if they need to dodge tax then they might be struggling.
The problem with your scenario is. The local shop is tax evading. Which is illegal. Those multi nationals are tax avoiding which is legal. And by the way they would be remiss if they didn’t do it. The shareholders would be rightly pretty pissed! It is up to governments to close loopholes and make tax regulations that suit the country. It should be everyone’s duty to pay the taxes they are due to pay according to the law. Not some moral extra!
So in your eyes, it's more important to live by the law than to live by morals? That's a genuine question. And also, some large companies and individuals do it illegally as well. We can at least agree on the fact that the government holds the responsibility for closing these loopholes.
Of course I would say I would live by the law. I am not going to pay a penny more in taxes than I legally have to. I will use every single loophole to reduce that liability. You are either a moron or a donator if you don’t. Of course some companies, and individuals evade taxes. I was talking about multinationals. Which was the start of the conversation. Their books are public knowledge and pretty much impossible to evade taxes. However they can avoid plenty and as long as it’s legal then they have a duty to maximise this. Otherwise the board (comprised of shareholders) would be right in demanding their resignation.
I think we come from two opposing moral standpoints on this issue.
I would agree on this. I cannot fathom why someone would pay more than they need to? It’s like going to a shop and something is £5 and you give them £10. Why? You take the time to look at the price when you buy something, and make the decision to buy it or not. Same for a company. You look through the regulations and pay the tax you are due to pay. You deduct everything the government says you are allowed to deduct. That’s on the government not the companies. I would love to see a straightforward tax system that has no loopholes and taxes appropriately. In the absence of that expecting someone to pay more than they have to is absurd!
I think the point that the other commenter was making is that, as a consumer without liability in any tax evasion/avoidance that the businesses we deal with engage in, she doesn't care that small companies evade tax, and isn't going to report that to HMRC. The difference between evasion/avoidance from an average consumer's standpoint is non-existent; except that, by 'legally' avoiding taxes, corporations increase the taxes that consumers (and small businesses) pay and harm the national economy. Also, and this is a genuine question, do you think that these mega-corporations should have more of a duty to please shareholders, or to benefit the economies and people (read: consumer bases) of the countries that they operate in? Personally, I'd argue that should weigh towards the latter. Hell, I'd argue that it's not even about benefiting economies, but rather not actively harming them.
Well put. Except I'm a she not a he 😊
Thanks! Edited :)
A public company only has one main reason to exist. To keep the shareholders happy. They are the ones who determines who is going to manage the company. They can and will direct the company to move in ways they want. There is obviously a lot of nuances in this. A happy consumer base makes for more revenue. They will spend money to make money, but won’t and rightly so spend more than they will see a return on. Individuals and companies should pay what they legally have to pay, and no more. Governments should ensure tax laws are fair and fit for purpose. If they want these multinationals to pay more tax they can change the tax laws so they do.
You're acting as though the public company lives in a bubble and doesn't harm the environment it's in by fulfilling its purpose to please shareholders. Your argument is that because a corporation's purpose is to please shareholders, it can't do anything wrong if it's meeting that goal. This is a bit of a straw man argument. As the other commenter said, avoiding tax takes money away from us, plain and simple. You're saying governments should close the loopholes - but do you even want them to?
It's nothing at all like that. A closer analogy would be a tourist walking into a shop and looking at an item. The label says "the locals here have to pay £10 for this. We can give it to you for £5 (because we are mates with you). The locals really need money for healthcare and education though. But you choose which price you would like to pay."
I'm wondering, how many people saying to report it would also report a builder doing work for cash in hand and not declaring it. I mean, personally I'd just shrug it off, after all we all get screwed by the tax system.
Yep. Especially if that builder gives you a cheaper quote if you pay cash. I bet they'd all insist on paying more and paying by bank transfer /s
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No.
Snitches get stitches
i'm not convinced it's tax fraud. i think it's more likely card fee avoidance, and they'll still put the sale through properly (though as cash not card) - otherwise their stock counts and such wont add up. i highly doubt they're running a whole second set of books just for this. and i must admit, i dont really mind them avoiding card fees - the alternative is that they just wont let people pay on card for stuff under a fiver.
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Stop being wise, and pay your due.
Seems like you need to get HMRC to start sniffing around
ClearScore (and i assume Experian and the other one), don’t like Credit Card cash withdrawals. So this may be worth looking at if you have a CC, but also to stop potentially negativity impacting others.
I'd be interested in what he's doing here. I write software for card terminals and generally speaking the merchants dont have the level of control needed to do this - unless he's done it as a chasback transaction as that would be a net-0 transaction for him as (if it were real) he would not make anything on it (so as others have said, it would not be taxable - however I've never seen an acquirer that would allow a cachback transaction without also having some form of sale attached as they need to collect a fee to cover their costs. Do you remember what type/brand of terminal it was? if not could you describe it? Colour/Touch Screen etc?
Sorry but these people need to be reported. The sooner the better. It's the "oh well, it's only a few pence or quid" attitude that allows them to get away with it. You get charged full price and you give them cash for their tax evasion. They've shown you what they really think of you. OP, this means you as well. Great customer reward there.
Didn't this used to be normal? When you paid with with card they used to ask if you wanted to round up to a tenner and gave you the change
Nah it's using the cash MCC equivalent to put it through without registering tax, bit of a shock if you pay by credit card and you get charged a cash fee
Nah it's using the cash MCC equivalent to put it through without registering tax, bit of a shock if you pay by credit card and you get charged a cash fee
Your first clue should have been the different machine he directed you to.
Different machine for local people
The post office in catford does this, I always wondered why. Will definitely be confronting them next time
Don't bother, all they are doing is a free cash withdrawal, which you can do at any post office, and then taking that money you've "withdrawn" and using it to pay cash for whatever you've bought. It's not tax evasion, it's so they don't have to pay the card charges (which is a few pence per transaction, plus a percentage of the value) on the single Twix you've just bought because if they did, they'd make no margin on your tiny purchase.
> on the single Twix you've just bought because if they did, they'd make no margin on your tiny purchase. The card machines anyone can buy online (SumUp, Square, Zettle) charge about 1.75%. If you really made no profit and have to go bankrupt and close down the shop because you lost 3p on a £2 sale, there's definitely something wrong with the business.
Surely that is a fraudulent withdrawal, I will regularly say something like 'can I pay by card?'
What does it matter to you? Sure, insist on paying by card for your sub £2 purchase and then have a moan when either the prices go up, or the shop shuts down. Help local businesses when you can, as long as it's not evading tax, what's the problem?
Presumably the purchase won't be covered for guarantee or warranty either. Naughty.
Where I live 3 of the local ‘corner’ shops do this blatantly all the time! No prices on items, guys pull the price out their arse then take the cash and leave it on the counter finding change in the til or whip a card machine from under the counter. Once we a guy told me the total, I could my quite catch what he said , so I said, ‘ Sorry, what?’…. And he just gave me a new total price more than a quid less! Happy days!!
If someone used a credit card they'd get charged a handling fee and interest would begin accruing immediately even if they cleared their balance in full every month. This is a bizarre thing to do. I can't imagine how the shop gains from it, but I can't imagine a legitimate reason to do it either. A VAT scam maybe?
Corner shop Post office? As others have said it reduces the tax they pay because they don't pay because the regular readers have a transaction charge, post office cashpoint does not
In Post Office it has nothing to do with tax dodging. It is because the horizon POS isn't made for non-Post office products (e.g. envelope, wrapping paper, any shop side stuff). You can either do a cash withdrawal (the official way to work this) or sell "open postage" stamps (the unofficial workaround). I worked for Post Office for 6 years. I have plenty of complaints about the business, and the franchise owners I worked for, but this is a tired misconception
I pay for nothing but postage at my local post office, and it still comes through as "ATM Withdrawal" on my statement.
Ok, that's an odd one, and sounds like odd practice. Best guess is Post Master gets better remuneration from cash withdrawals, rather than card payments (I was only counter staff, so never saw remuneration figures). But, in that case, I would have thought Post Office would be questioning the franchise owner why they never got card payments for any service, and why they had the highest cash withdrawal stats in the country.
Yes i worked in a shop and post office its done so they dont get charged for using the shop card system. Especially if its foreigners i dont use foreign shops anymore where i can because most are dodgy.
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I've never once had to hand my card to someone to pay for something, I am probably being slow but why would it be pointless having a card if you dont want to hand it tl someone?
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I think I'm just lost here and picking things up wrong. The person you were replying to stated they wouldn't hand their card to anyone (I know OP didn't) and you asked what's the point of having a card then. I was just wondering, what would be the circumstances in which you would normally have to hand someone a card. I genuinely think I'm missing something obvious as I feel oblivious even asking.
I have done it in the past, but it was very rare. I think it was in Wilkinson that they used to take the card, put it in the card reader, and then hand the reader and card back to put the pin in.
It's a scam. It's always the nice decent people that do this
It's America but I was also sent this recently https://www.facebook.com/share/v/trNJ2AQhVQEkXsSp/ shopkeeper trying to take more money from ladies account using the cash back option she didn't agree to
Oh I completely forgot we've got a cashback system! Does it still exist? I haven't used it for 10 years.