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- Mar 2023
In short, in the absence of legal tender laws, the seller will not accept anything but money of certain value (good money), but the existence of legal tender laws will cause the buyer to offer only money with the lowest commodity value (bad money), as the creditor must accept such money at face value.
During the coronavirus pandemic, many vendors facing inflation began to pass along the 3% (or more) credit card processing fees to their customers. Previously many credit card companies would penalize vendors for doing this (and possibly cut them off). This fee was considered "the cost of doing business".
Some vendors prior to the pandemic would provide cash discounts on large orders because they could circumvent these fees.
Does this affect (harm) inflation? Is it a form of Gresham's law at play here? What effect does this have on credit card companies? Are they so integral to the system that it doesn't affect them, but instead the customers using their legal tender?