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hegemony's $100 bill strategy for dealing with subprime merchants


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#51 hinklesc

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Posted 20 July 2010 - 11:27 PM

They're being offered valid payment and not accepting it.


No different than insisting they take a check despite a large "no checks" sign. If they stick to their guns, you'll either be making frantic phone calls for someone to run you over some accepted form of payment, or visiting with law enforcement. There is no requirement that a merchant take your card, your check, or your cash, if they have posted notice. There IS a requirement that you pay them.


I know that 3 things would happen if they called law enforcement on me. First, I would never return and influence everyone I know to do the same. Secondly, I would make sure that the scene I caused costed them more than the $3 under minimum where they would not accept card. Thirdly, I would call the county prosecutor I know very well (work together often) and ask him to spot me $10 in cash.

If that does not work, I guess I would walk my happy *ss to an ATM and get their money (less tip for my hassle).

Edited by hinklesc, 20 July 2010 - 11:27 PM.




#52 frank22

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Posted 20 July 2010 - 11:30 PM

How often do you think a sit down restaurant will be less than $10? If it is take out the choice for you might be food or no food, for the merchant it will be sale or no sale. Either way a pain for all concerned. I think the post count on this board talking about it will be more than it actually happens in real life.

#53 frank22

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Posted 20 July 2010 - 11:38 PM

They're being offered valid payment and not accepting it.


No different than insisting they take a check despite a large "no checks" sign. If they stick to their guns, you'll either be making frantic phone calls for someone to run you over some accepted form of payment, or visiting with law enforcement. There is no requirement that a merchant take your card, your check, or your cash, if they have posted notice. There IS a requirement that you pay them.


I know that 3 things would happen if they called law enforcement on me. First, I would never return and influence everyone I know to do the same. Secondly, I would make sure that the scene I caused costed them more than the $3 under minimum where they would not accept card. Thirdly, I would call the county prosecutor I know very well (work together often) and ask him to spot me $10 in cash.

If that does not work, I guess I would walk my happy *ss to an ATM and get their money (less tip for my hassle).


I have no idea how this issue rises to such a level for you, but I have to say HOLY COW!

#54 hinklesc

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Posted 20 July 2010 - 11:38 PM

How often do you think a sit down restaurant will be less than $10? If it is take out the choice for you might be food or no food, for the merchant it will be sale or no sale. Either way a pain for all concerned. I think the post count on this board talking about it will be more than it actually happens in real life.


Agreed, with you here.

I don't think most would do this, as it would make them look petty.

Wonder if the fast food joints would hop on this? I had coffee at McD's the other morning. Not bad and I get it for 59 cents (senior, but not senior) and did notice most transactions were plastic.

#55 frank22

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Posted 20 July 2010 - 11:45 PM

How often do you think a sit down restaurant will be less than $10? If it is take out the choice for you might be food or no food, for the merchant it will be sale or no sale. Either way a pain for all concerned. I think the post count on this board talking about it will be more than it actually happens in real life.


Agreed, with you here.

I don't think most would do this, as it would make them look petty.

Wonder if the fast food joints would hop on this? I had coffee at McD's the other morning. Not bad and I get it for 59 cents (senior, but not senior) and did notice most transactions were plastic.



I don't think they will, as you point out, it has helped sales. They also have better terms. I think the minimum is not going to be the major issue, it is really going to be the ability to offer discounts. A merchant posted on Consumersit that wherever he/she worked they weren't going to do anything with minimums, but they were looking hard at offering a discount for cash.

Edited by frank22, 20 July 2010 - 11:47 PM.


#56 radi8

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Posted 20 July 2010 - 11:53 PM

they weren't going to do anything with minimums, but they were looking hard at offering a discount for cash.


I suspect that's how it will play out in a lot of places. No minimum for the card, but cash will get a discount. Most likely that "discount" will be the same price you are paying now- with the small-ticket items being marked up enough to cover the processing fees.
That 0.90 snickers will be $1.00, discounted back to 0.90 if you pay cash.

#57 Passenger25

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Posted 21 July 2010 - 05:56 AM

How often do you think a sit down restaurant will be less than $10?

Late night diner/college hangout, split checks, it'll happen all the time.

Strange that merchants who never considered cash discounts before are talking about them now. I suspect they'll talk a good game, delay implementation, then forget about it once the debate has faded from the news.

#58 TrevorHere

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Posted 21 July 2010 - 07:58 AM

How often do you think a sit down restaurant will be less than $10? If it is take out the choice for you might be food or no food, for the merchant it will be sale or no sale. Either way a pain for all concerned. I think the post count on this board talking about it will be more than it actually happens in real life.


Time will tell. It appears to be a hot button issue for both the merchant and the customer. Each believing the other party should back down on the matter.

The merchant should just take a card for less than $10 vs the customer should just pay cash for under $10.

Some policies/issues/laws just never get resolution or compromise with some sort of testing or protest...

#59 centex

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Posted 21 July 2010 - 09:21 AM

How often do you think a sit down restaurant will be less than $10?


That point is lost on MANY...hell, a glass of wine has me over ten bucks before I even have the seat warmed with my posterior... :lol:

#60 frank22

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Posted 21 July 2010 - 09:51 AM

they weren't going to do anything with minimums, but they were looking hard at offering a discount for cash.


I suspect that's how it will play out in a lot of places. No minimum for the card, but cash will get a discount. Most likely that "discount" will be the same price you are paying now- with the small-ticket items being marked up enough to cover the processing fees.
That 0.90 snickers will be $1.00, discounted back to 0.90 if you pay cash.


I don't think it will play out that way, especially for the small merchants. These transactions are still mostly cash, they would not want to raise all prices and play with the discount, it would be to much of a hassle and would upset most customers. I think they are happy just having the option of the minimum if they need it. I think they will be required to use a fixed percentage as discount, in the neighborhood of 2%. The fixed swipe fee makes is difficult to address with a cash discount because your candy bar would be around a 10% discount. I think the minimum issue plays out in one of these two ways. 1) Much as it has, with some stores having minimums, although more may now, it won't be an explosion of minimums. 2) An accommodation between merchants and the CC industry. They could reduce the swipe fee for the merchant, this could promote the use of cards for low value transactions. It has already been done with larger corporations. Also possible is a reduced swipe fee for only the small transactions. This keeps the profits on most transactions, but would do away with the minimum issue completely. To me this makes sense from the CC industry's perspective. Everyone is going on this being an issue between the merchant and consumer, this is really an issue between the merchants and CC industry, we are just in the middle. The best answer really lies between those two.

As for the other merchants on the fake discount, it will happen at some places, for a few reasons I don't think it will happen at most places, but there will be other times to discuss this aspect of it.


Passenger25:

Late night diner/college hangout, split checks, it'll happen all the time.

Strange that merchants who never considered cash discounts before are talking about them now. I suspect they'll talk a good game, delay implementation, then forget about it once the debate has faded from the news


Around me these types of places already have the minimums. I know college students have cards, but they also have cash, so I guess they adapt, but mostly have already. It is cumbersome to divide a meal using cards, it is done but I think you are over playing the impact this will have.

As to the discount: It was technically allowed, but it was extremely cumbersome to implement. This law now takes that away and makes it practical. This is one of the things they were fighting for. It wouldn't have been listed in the new rules if they could already do it. They will not forget about it, it is something they fought hard for. They view this as a way to keep in check the rising fees for CC transactions. Over the last decade the fees have close to doubled. They want to put some pricing pressure on the banks, one huge problems is there was none, when this happens prices are higher than they would normally be.


TrevorHere:

Time will tell. It appears to be a hot button issue for both the merchant and the customer. Each believing the other party should back down on the matter.

The merchant should just take a card for less than $10 vs the customer should just pay cash for under $10.

Some policies/issues/laws just never get resolution or compromise with some sort of testing or protest..


I disagree that it is a hot button issue between the merchant and customer. Most customers don't think about it much, and those that hit the issue understand when they are told, it is a minor inconvenience at best. I think you are right about how things get resolved, I believe the new rules will help resolve the issue, it might not be right away, but the banks want us to use the cards for these transactions and they don't cost anything extra, they will decide to maximize revenue under the rules the way they exists.

Edited by frank22, 21 July 2010 - 10:11 AM.


#61 frank22

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Posted 21 July 2010 - 10:04 AM

How often do you think a sit down restaurant will be less than $10?


That point is lost on MANY...hell, a glass of wine has me over ten bucks before I even have the seat warmed with my posterior... :P


I think the point is not really lost, it is IGNORED. They want to make hay where the sun don't shine because they are upset about losing an entitlement they feel they should have. Issues are expanded beyond their real impact. The minimums are going to hit with a thud for most. Hear a bang if you want, but most will not be listening.

#62 TrevorHere

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Posted 21 July 2010 - 10:32 AM

How often do you think a sit down restaurant will be less than $10?


That point is lost on MANY...hell, a glass of wine has me over ten bucks before I even have the seat warmed with my posterior... :cry2:


No doubt :P

#63 hegemony

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Posted 21 July 2010 - 10:48 AM

the $10 minimum sign the merchant had posted near the register is gone!!!!! :D :clapping: I knew this owner had at least half a brain!!!

#64 BBQ123

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Posted 21 July 2010 - 07:23 PM

The merchants will be allowed to have minimums, but customers don't have to put up with them.

#65 radi8

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Posted 21 July 2010 - 10:35 PM

The merchants will be allowed to have minimums,


Looks like you need to edit your signature. ;) Twice, as certain merchants are allowed to set maximums now too.

#66 radi8

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Posted 21 July 2010 - 10:39 PM

Over the last decade the fees have close to doubled. They want to put some pricing pressure on the banks, one huge problems is there was none, when this happens prices are higher than they would normally be.


That is the problem right there. There is no competition in card processing, there is instead a cartel where no member will undercut the other''s price.
That isn't good for anyone but the banks.

#67 hegemony

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Posted 22 July 2010 - 10:24 AM

Over the last decade the fees have close to doubled. They want to put some pricing pressure on the banks, one huge problems is there was none, when this happens prices are higher than they would normally be.


That is the problem right there. There is no competition in card processing, there is instead a cartel where no member will undercut the other''s price.
That isn't good for anyone but the banks.



it is good for merchants who have a smart business model that does not throw the baby out with the bathwater.

#68 frank22

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Posted 22 July 2010 - 10:36 AM

Over the last decade the fees have close to doubled. They want to put some pricing pressure on the banks, one huge problems is there was none, when this happens prices are higher than they would normally be.


That is the problem right there. There is no competition in card processing, there is instead a cartel where no member will undercut the other''s price.
That isn't good for anyone but the banks.



it is good for merchants who have a smart business model that does not throw the baby out with the bathwater.


There is no smart business model that doesn't try to control costs that double, no matter how valuable that service is.

#69 hegemony

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Posted 22 July 2010 - 10:44 AM

Over the last decade the fees have close to doubled. They want to put some pricing pressure on the banks, one huge problems is there was none, when this happens prices are higher than they would normally be.


That is the problem right there. There is no competition in card processing, there is instead a cartel where no member will undercut the other''s price.
That isn't good for anyone but the banks.



it is good for merchants who have a smart business model that does not throw the baby out with the bathwater.


There is no smart business model that doesn't try to control costs that double, no matter how valuable that service is.



how about charging consumers a price higher than the costs?

how about building an iterated relationship with a consumer? these shortsighted merchants act as if every transaction exists in a discrete universe.


what next? federal regulations to give retailers free water and rent? :)

#70 frank22

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Posted 22 July 2010 - 10:58 AM

Over the last decade the fees have close to doubled. They want to put some pricing pressure on the banks, one huge problems is there was none, when this happens prices are higher than they would normally be.


That is the problem right there. There is no competition in card processing, there is instead a cartel where no member will undercut the other''s price.
That isn't good for anyone but the banks.



it is good for merchants who have a smart business model that does not throw the baby out with the bathwater.


There is no smart business model that doesn't try to control costs that double, no matter how valuable that service is.



how about charging consumers a price higher than the costs?

how about building an iterated relationship with a consumer? these shortsighted merchants act as if every transaction exists in a discrete universe.


what next? federal regulations to give retailers free water and rent? :)


Exaggerate much? There is no federal regulations that will give us or the merchants free credit card services, so you are rolling your eyes to your imagination. They are just allowing for a small amount of merchant and consumer control. This rule doesn't even regulate prices, never mind giving them to us for free. The merchants also didn't even get the ability to control the extra costs of the rewards products. Even after the rule they will have no choice but to pay the extra reward fees.

#71 frank22

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Posted 22 July 2010 - 11:04 AM

how about building an iterated relationship with a consumer? these shortsighted merchants act as if every transaction exists in a discrete universe.


It is a complicated business decision on whether to accept losses at certain times in the hope of future more profitable transactions. These decisions should not be made by the customer, a service provider, or the government. You can make a case in certain instances, but in many you can't. It depends on the nature of the business. Let the merchant make his own decisions based on the nature of that particular business.

Edited by frank22, 22 July 2010 - 11:06 AM.


#72 TrevorHere

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Posted 22 July 2010 - 11:24 AM

how about building an iterated relationship with a consumer? these shortsighted merchants act as if every transaction exists in a discrete universe.


It is a complicated business decision on whether to accept losses at certain times in the hope of future more profitable transactions. These decisions should not be made by the customer, a service provider, or the government. You can make a case in certain instances, but in many you can't. It depends on the nature of the business. Let the merchant make his own decisions based on the nature of that particular business.


But at the end of the day, the biz cannot continue to exist w/o the customer. Therefore every decision a biz makes affects the consumer, and the consumer will react accordingly. It's a biz relationship. The biz can make its own decisions...but the results may either be positive, negative or neutral. These policies are no different than pricing of goods, promotions, location/parking etc.

#73 frank22

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Posted 22 July 2010 - 11:52 AM

how about building an iterated relationship with a consumer? these shortsighted merchants act as if every transaction exists in a discrete universe.


It is a complicated business decision on whether to accept losses at certain times in the hope of future more profitable transactions. These decisions should not be made by the customer, a service provider, or the government. You can make a case in certain instances, but in many you can't. It depends on the nature of the business. Let the merchant make his own decisions based on the nature of that particular business.


But at the end of the day, the biz cannot continue to exist w/o the customer. Therefore every decision a biz makes affects the consumer, and the consumer will react accordingly. It's a biz relationship. The biz can make its own decisions...but the results may either be positive, negative or neutral. These policies are no different than pricing of goods, promotions, location/parking etc.



The business cannot exist without profitable customers. There is a direct, known cost to these particular transactions. You are telling him you will be profitable tomorrow, and he knows by his own experience whether you will or not, maybe not specifically, but in general. Many of these customers will elect to use cash(I know some won't). The merchant will have turned some unprofitable customers to profitable ones. It is these merchants opinions that this will be a net gain. I think they are going to be right. By all means let the merchants know your opinion, I am sure they will take it under advisement.

I am surprised you are now saying this decision should be no different than his others aspects of business, I have been saying this from the beginning. However, you still seem to be wanting it to be treated differently by forcing him to offer it, even when it will be unprofitable, and not allowing him to charge for it.

Edited by frank22, 22 July 2010 - 11:56 AM.


#74 hegemony

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Posted 22 July 2010 - 12:27 PM

frank always forgets that the retailer has a choice about credit card fees. simply stop accepting credit cards. simple as that. oh wait...not accepting credit will eat into profits? hmmm...imagine that.

#75 frank22

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Posted 22 July 2010 - 03:28 PM

frank always forgets that the retailer has a choice about credit card fees. simply stop accepting credit cards. simple as that. oh wait...not accepting credit will eat into profits? hmmm...imagine that.


Not forgetting a thing, we have discussed this before(I guess we discussed everything before :lol: ). The choice is a false choice in this society. Credit cards equate to something like 80% of all transactions, and Visa/Mastercard have around 75% of the the market. They use the same networks and processors. There is little choice if a retailer wants to reach 80% of the market.
The consortium of banks built up the network with lower fees and then raised them after there was little choice. This is standard predatory practice.

VISA and Mastercard were set up by and wholly owned by the member banks for credit card transactions, it is only recently that they were separate. American Express and Discover had to sue Visa and Mastercard because of the monopolistic strangle hold they had on the banks. Visa and Mastercard settled before it went to court. This settlement was in the neighborhood of 3 Billion dollars for Visa alone! They of course "admitted no wrong doing" Although that issue is technically resolved, the GOA states the low market share of American Express and Discover is seen as strong indication of the monopoly that Visa/Mastercard have.

There is a competition between Mastercard and Visa that actually works against us. In order to sign up banks for their products, they compete by telling the banks they can provide higher rates and provide the banks with more income. The competition is not to lower the costs to the merchant/consumer, but to raise them. Of course these rates work against us. In this weird way competition costs us more. The cause of this is that the consumer pays for the product, but has no say in its use, we do not even have the choice of saving money by not using it. This is very perverse, and you do not see it for some reason.

(I am typing this quickly from memory, and I sure I could of made it more compact and fluent, sorry.)




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