"IF" that tax deductable FEE is the straw that broke the camels back...DON'T TAKE CREDIT CARDS

But don't expect to retain most of the business

Yes the market should swipe them out.

See that proves my point. It would have been better for the merchant if he gave away the candy bar rather than put it on a credit card. Do you think that is fair??? Him being forced to do that? And you think think it should be your right to force him to do it. You are so concerned with that one CC agreement forced on the merchant? You must really like the CC companies- you are working for them for free.

if the merchant cant afford the card agreement he should turn in his processer and just take cash or checks. i know of business that do just fine refusing cards including ARCO.

Disagree.

If there was no NDA, this very probably made the news.
Confidential discussion ends when your name is known.

People often present private financial information here.
I expect the site owners know my personal info, and the
mods might have access, but nobody else gets my name
without a court order.

ER

That customer did not spend $152 last week???

That customer will not spend $96 next week???

All they wanted today was a candy bar and had no "CASH"

you expect wrong. We have no access to your name or even where you are posting from unless we really try to find it which we dont. The admin has access to my name and other mods names because of what we do for them. Members informations is strictly held in confidence IF we even have it because from what I remember signing up as a new member they didnt ask for my personal info except for email address.

I think in today environment they feel forced to accept, but are taking real losses that is frustrating them.
Practically the rules are not normally enforced, which is good. It is really the very few militants on boards such as these that press the issue. Yes, as you say they accept the contract when they sign. They just feel they have no choice. This is really the big guy screwing the little guy pure and simple and you are the big guys tool. He cannot work to change the rules because of collusion laws. Kind of ironic, hah?

I think without this rule the CC's would cut a better deal because this rule forces the stores to almost hide the fee. It is like giving a blank check to them because the cost is not born by the person making the decision. It is real strange that only in this instance you are supportive of the big banks. If the merchants could add a small fee transaction, many would use cash and they banks would not like this one bit. They would get the same low or no transaction cost the big guys get and everyone would be happy accept the banks.

POINT--->I USE MY CREDIT CARD or I DON'T BUY IT

TACO BELL HERE WAS CASH ONLY...they doubled or tripled their business as soon as they started taking credit cards

so it was you in the dirty sweats featured in hege's former siggy?

Note: you didn't answer any of the real questions, tax destructibility and cost of business.

As for a customer charging something small and then later charging bigger items. I don't think it would often be the case in a small shop. Often many transactions would be small and probably the same guy is charging the same small stuff. Your take on things may be ONE way to go, but I don't think it works practically. Each transaction should be profitable in a business. Your way may work, but if a merchant doesn't think it will it is not for you to tell him differently. It doesn't make sense in the real world. If you think it will, then that is fine, trying to impose that on him is wrong. Even if it works in your case, there are many cases and many types of stores. It doesn't happen that way in most.

I agree with you here but the simple fact of the matter is its against the agreement and in some states against the law to charge a fee for using a credit card. if the merchant doesnt like this or its unprofitable for him then he should give up the ability to accept cards.

I can use my CREDIT CARD at McDONALDS and spend $3 + tax

They don't tell me to THEFT the food

The $3 was spent BECAUSE I could use my credit card

Had I not been able to use my credit card...THE $3 SALE WOULD NEVER HAPPEN

Good.

What I am saying is, detailed personal info is the
same as signing your real name to a post. Like,
"I won't use my real name, but I filed a lawsuit
in Far Marinda, Del on August 3, 2007 and won
$23,456 from Citibank ."

The poster mentioned a specific incident with
plenty of specific detail. Assuming this is real,
his/her name is now public record.

ER

this is true.

You have brought up Taco Bell before. I think you just click on a template of canned responses kind of like Customer Service departments do?

It is well known that the big corporations have the power to negotiate the per transaction cost that the small merchant can't. So Taco Bell just pays the percentage. It make the small transaction costs the same as the large transaction as a percentage. So it works for them. So you are arguing apples and oranges here. If the merchant didn't have to pay that fee either we wouldn't have an issue. I am arguing about the fee that the large places don't pay or is very small. So that kind of proves my point too.

Let me also agree that there is real benefit that the merchants receive from accepting CC's. But it has a costs and this cost needs to be managed just like any other costs. Just normal cost management is all they want to be able to do. Exactly how they do it will depend on their own experience and the specific industry. You are not privy to their costs structure and it is best if you don't try to impose yourself on them without being asked.

Edited to add: Your McDonald point is the same as Taco Bell. You have not addressed the cost of doing business issue and the tax deductible issue. It is normal business 101 and your take on a loss now for profit later mantra is not normal business practice in any industry, so while it may work, getting upset when a merchant doesn't follow it is wrong.

BS..........................

For the few who don't grap the LOGIC...I buy something because I can use my credit card

No credit card...no sale

500 NON SALES A DAY/WEEK/MONTH YOU GET FOR NOT TAKING CREDIT CARDS GETS YOU WHAT...IN THE MONEY DEPARTMENT???

(if you didn't take credit cards...and the customers walk out)

Big companies also get better rates for advertising, and marketing.

Accepting credit cards has PROVEN that you get more customers, and they spend more. Think of accepting credit cards like marketing, big companies get it cheap and the little guy get's squeezed (myself included).

Saying that you accept credit cards is very similar to saying you have a drive through window at your restaurant (if your in the fast food business). You get more customers, and the cost of the drive through is a discreet cost of the product, NOT a direct cost.

bingo

POINT--->I USE MY CREDIT CARD or I DON'T BUY IT

Ha Ha on the BS......

I missed the I use credit or I don't buy it point. The thing is that is OK. Very few people feel like that and any business cannot cater to everyone. The merchant should have a choice also in whether in the long run he would like to cater to someone like you and whether he would not. Peaple always only charging $3 might not be worth it and he might be better off without you. That you MAY charge more at some point COULD happen. But let him decide. It should be his choice and a small place that has many small transactions might find his losses on these transaction are such that he doesn't want to. Let him make that business decision on his own.

Most people I know accept the issue of the small transaction not being profitable and don't mind paying cash.

ll I am asking a little understanding of the small guy. I just don't see it a big issue for me, but I can see where it would be for a business.

Other than a few $$$$$ for vending machines...I'M 100% CREDIT CARDS or I DON'T BUY IT

Don't tell me I can't only spend $1.57 on my credit card

Then you won't get my $57.12 sale or my $96.18 sale after that

Since your small place doesn't sell HIGH END STUFF...you won't miss the $1,000+ TV SALE (ON A CREDIT CARD)

POINT

Moving to the correct forum.

You lost me on the part in red. Why can't they work to change the rules?

I agree, btw, that many businesses *feel* forced to accept CCs, but I would disagree with the idea that they really are. I also operate under the idea that ALL costs should be lumped together when a business determines it's pricing strategy and that CC fees by themselves should not be a "make-or-break" item. If it is, then the business has other deeper more serious issues than just CC fees. They're on the edge anyway.

The fact that most businesses now accept CCs also places them on more of a level playing field to begin with, which reduces even more any disparities when businesses are competing against each other. If you really want to get into serious disparities, we'd be better to address volume wholesale discounts that larger retailers get that smaller mom-and-pop places don't get. That does more to tilt the playing field than any CC fees do.

FWIW, I know many restaurants that don't take CCs, and they're always packed. Why? Because they're damned good.



I'm presuming you mean me specifically.

I'm not necessarily supportive of big banks, per se, but rather consistency. To be honest, I would not be all that bothered or offended if transaction fees were allowed... as long as I knew well enough before I made the purchase so I could make my decision accordingly. I mean, I'd prefer they not, but it wouldn't be a big hairy deal to me worthy of railing against like I'm sure it would be for some.

I do favor following established and agreed-upon rules, however, while they are legal and in place. Even for the so-called little guy.

In the end the customers pays the fee anyway, even if they don't realize it. As it stands right now, cash buyers subsidize credit buyers, and (theoretically, at least) neither would subsidize anybody if fees were allowed and both sides would pay their own way. Ultimate choice, for people who like to spout that kind of stuff.

FTR: I do support even big business, including banks, to make a fair profit. "Fair" being subjective, of course... and no, I'm not going to try and define what "fair" is just so someone else can come along and be argumentative when it is clearly subjective opinion to begin with.

Unless the thread is about *why* people in debt are in debt... then magically there is zero correlation.

Personally, I buy because I want or need it, not *because* they take CCs.

That the little guy get squeezed on other thing such as marketing I don't think means much. That is one reason the little guy may do less of it. He manages it based on his reality. That is all that should be done here. An expense which needs to be analyzed and priced based on many factors. Let this be an expense like any other and it IS a variable expense that he can match with the transaction. It is at LEAST REASONABLE FOR HIM TO.

A drive through is a different animal with different price structure and surely a transaction is more likely to be profitable than a small CC transaction. For one thing they can handle more volume and the inside restaurant is not burdened with the sit down overhead. It up to a business to decide how to price out products, customers and transactions. You are getting into the minutia of one to transfer it to another that doesn't apply. Even the same business will have different people price things out differently. It should be their choice and the more accurate the pricing in general the better the business is run.


I did agree that there is a real benefit in accepting cards and this is why the merchant is forced to accept them. The the costs of everything needs to be managed and this is all he wants to do. Allocating the costs to the transaction, like the extra cheese on a pizza. George doesn't have the answer in his template, but why is a CC transaction any different than the pizza? You cannot deny that it is a variable costs and it is good practice to price a transaction with all variable costs in mind. That CC's increase volume is good, but the small transaction could mean a loss, and so it is REASONABLE to see that as unwelcome volume. You may disagree, but you may be wrong, and it IS HIS business. You shouldn't be making his pricing decisions for him.

You know those fancy rewards cards everyone on this board loves?

Years ago the issuing bank managed their expenses and used a portion of profits to fund their cardholder rewards programs. That is no longer the case.

If someone comes into my store with a plain vanilla Visa my interchange rate is 1.64%.

If someone comes in with their fancy Platinum Plus Cash Back -- I pay 2.6-2.85%.

Want to use a Business Visa with rewards, employee cards, spending alerts, expense reports? Start at 3.8%.

See where that 1-1.25% cash back comes from?

Yet I can't refuse any card. I have to accept them all or none of them.


Is it going to make me stop accepting credit cards all together? Probably not. I really have no choice. The majority of the shopping public has taken George's point of view and decided it's their birthright to be able to use a card.

But is it fair that the merchant has to pay for the bank's rewards program?

For discussion purposes only... IF you were allowed to charge a fee to cover the CC fees, and you chose to do so, would you charge a flat rate or would you charge a variable rate based on the card being used?

The business owner really is the low guy on the proverbial totem pole here. The CC company supplies the credit product so they get to make the rules. The customer has the money that everybody wants. The merchant has nothing... other than inventory that they want to get rid of... but wants a piece of what everybody else has.

yeah but look at the bright side. alot of those customers are now belly up and paying for their years of gluttony now.

Flat rate to cover the administrative fees (authorization fees, header fees, etc.) and on small dollar transactions it would also cover a bit of the percentage fees. (i.e. $0.50-$0.75 on transactions under say $5.00)

I can work around a percentage based CC fee (i.e. raising my prices to account for a 1.6-2.8% processing fee).

But I have to pay the fixed costs (authorization fee, header fee, etc.) on a per transaction basis, not a per item basis.

In the hypothetical $5.00 purchase, the $0.25 authorization fee is 5%. In a tough economy where I am trying to keep my prices as low as I can, that's a good chunk of my margin.

But if I adjust my prices to cover the possibility of every item being sold individually on a card, my other customers need to pay more.

Interesting numbers. i didn't know that business cards charge higher transaction fees than personal cards. One thing I see in defense of the small business owners "violating" contracts is that those contracts are from man oligopoly (VISA/MC/Amex own 90% of the market). VISA and MC both had to settle multi -billion $ claims because of collusion, some to big retailers and in another case to Amex (preventing major card issuers to issue Amex branded cards). The steadily rising transaction fees certainly raise suspicion of collusion or at least exploiting their dominant market position.

My CREDIT CARD is not welcome...my business is not needed either

There was no NDA, I refused to allow it, the story is findable if you search hard enough. But I will leave out the details.

Last time I checked;

all MasterCard/Visa transactions cost 1.96%
all AMEX transactions cost 2.98%
all Discover transactions cost 2.45%

I knew AMEX was always the most expensive.

Yeah, especially for fraud. The only one that pays for credit card fraud is the merchant. Many banks report chargebacks and fraudulent transactions as a "profit center" like overdraft fees. They get the interchange income, a chargeback/investigation fee from the merchant, and recover the charge amount from the merchant.

I cannot request someone's ID when they want to use a credit card.

But with a cloned card the thief is the one that signed the back of the card.

Therefore, the signatures match.

But when the real cardholder gets their statement in the mail and files a fraud claim -- the merchant has to pay back the charge despite having done everything they are allowed to do.

If the bank is prohibiting a merchant from checking ID, then the banks should absorb some of the fraud responsibility.

It's completely one-sided, but as you pointed out above -- the merchant has no negotiating power.

Some people act like this number is more like 30% or 50%

at some of the margins these merchants are running it might as well be 30 or 50% including your own.

IF THE CREDIT CARD FEE IS AT THE MAKE or BREAK PLACE...drop credit cards

Don't complain when the total business DROPS at the same time

Im not complaining since it doesnt affect me in that way.

Fine, if it's such a meaningless number (hey, it's tax deductible after all, right?) why don't you just tell your bank you'll pay them 2% of your gross income in fees?

Your opinion on the importance of 2% would probably change once you were the one responsible for paying it.

Edit to Clarify:

And the fee is charged on the gross sale, not on the net profit. So 2% of what you sold it for is more than 2% of the income from that sale.

Awwww but Uncle Marv! We were having soooooooooo much fun where we were!

Thanks hun, I wasn't aware of this room, I don't venture out too much on the other rooms as I always seem to start pi**ing contests elsewhere LOL

From my understanding it is illegal to band together to negotiate pricing. Airlines can't do it and neither can merchants. I am not a lawyer or know first hand, but I have read many merchants say that. I think for purposes of this discussion we can accept it as fact, because they seem to at least all think that and it would muddy up the discussion.

Normal business practice is not to lump together multiple products and customers with all the same costs. There are fixed and variable costs, and the well run business know what each is and prices each product and customer accordingly. In this case transactions because of the nature of the small businesses.

There are other issues that small businesses deal with, but that does not change THIS issue. That it places them on an even playing field is true and I have addressed that the benefits are there but it behooves any small business to manage ALL expenses, and not for us to tell him what to do. In this case the benefit is for higher priced goods or transactions. But if a business has many lower prices ones he may have many losses and forcing this on him is wrong. Especially pointing to another customer saying you will make up my loss on him(or even me maybe next week). Again it is a lot to ask.

The average ticket for a restaurant is much bigger than a small store, that may be SOME smaller transactions could be true, but the amount would be small and not be material as to the bottom line. So the volume increase is worth it to them, and is for the small merchant, however the small merchant still has to deal with the small unprofitable transactions. Let him deal with it in his own way is all I suggest

I agree, and even have been upset about some minimums. I once charged $19.65 for something at a small store. The woman informed me of a $20.00 minimum. I rolled my eyes at her and pointed out it was .35 difference and she let it go. But I never went back. Left a bad taste in my mouth. But I don't need Visa to protect me from a bad store. I can make my own decision, and I find most minimums reasonable.

That is what gets me about the rule everyone espouses. No one is concerned with the rule for Visa's sake. The only way to look at it is everyone thinks they should have a right to force the merchant to eat a loss and they don't care about the merchant, throwing the rule in his face. I have never saw so much support for the credit card companies and forgive me if I feel it is only for ones self interest. A business should have a right to price things out the way they want. That someone would do it differently is fine. But the way these merchants wants to do it is at least REASONABLE. And everyone who says that it is overhead is in my view wrong, and in many merchants view. He has a right to this view, accept for the contract. I am arguing mainly that the contract is unfair, so saying the rule is the rule isn't the part I am debating. I am debating that the rule exists

There seems to be a perception by some that if a company does not accept CC’s they will go out of business. This is not true. Just this weekend I went to my local liquor store. I could not even get in the parking lot; I had to park on the side street. They do not accept CC’s but have the best prices. We were invited Saturday to our neighbor’s summer home. We went to eat at hamburger place that they claimed was the best in the country. They did not take reservations and we had to wait about 40 minutes. I must admit it was one of the best hamburgers I had ever had. It was CASH only, not even checks were accepted. Man would I have looked like a fool if I did not have cash on me!!! If you provide something the costumer wants they will pay CASH for it.

I know you are OK with facts getting in your way because you will ignore them.

The percentage would be just one component. The per transaction fee in additional to the percentage is around $.60. This means the total costs of a swipe for small transactions could be easily 30-100%.

DID I SAY YOU

KEEP ON DOING THAT MICRO-MANAGING OF THAT FEE

Never play for the long haul

Take the bad along with the good or you will over-dose on the bad

IF I DON'T SEE THE CREDIT CARD SIGNS ON THE DOOR or IN THE PHONEBOOK...I ask

It takes 10 or 20 seconds

Sorry I can join you...NO CASH