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CC minimums will soon be legal

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In a free market, is is not up to the government to allow or disallow.

 

If they did not, there would be no free market. We would eventually have one oil company, one bank, one grocery emporium, one mass retailer and no competitors. It'd be like a sporting event with no referee and no rules. The more powerful entity would just obliterate their competition and keep doing it until there was no competition left.

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I probably won't patronize stores that have minimums

 

And it's absolutely your right to do so. If enough people do the same, the minimums will go away. If not, then the market has also spoken.

 

I tend to pick my stores based on convenience and product quality. If they have what I want at the price I want it at, I'm willing to pay by whatever method necessary, lol. Credit cards are just a means to an end, not a religion.

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In a free market, is is not up to the government to allow or disallow.

 

If they did not, there would be no free market. We would eventually have one oil company, one bank, one grocery emporium, one mass retailer and no competitors. It'd be like a sporting event with no referee and no rules. The more powerful entity would just obliterate their competition and keep doing it until there was no competition left.

 

 

 

The market is not free in its current state. The government (from primarily one political party) is choosing sides from one industry over anoher

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In a free market, is is not up to the government to allow or disallow.

 

If they did not, there would be no free market. We would eventually have one oil company, one bank, one grocery emporium, one mass retailer and no competitors. It'd be like a sporting event with no referee and no rules. The more powerful entity would just obliterate their competition and keep doing it until there was no competition left.

 

 

 

The market is not free in its current state. The government (from primarily one political party) is choosing sides from one industry over anoher

 

I never thought I would see the day when someone complained that the banks didn't have enough political power! They have been doing great in that department for so long, they lost a little ground, but they really overstepped quite a bit too. They will be fine, don't worry.

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In a free market, is is not up to the government to allow or disallow.

 

If they did not, there would be no free market. We would eventually have one oil company, one bank, one grocery emporium, one mass retailer and no competitors. It'd be like a sporting event with no referee and no rules. The more powerful entity would just obliterate their competition and keep doing it until there was no competition left.

 

 

 

The market is not free in its current state. The government (from primarily one political party) is choosing sides from one industry over anoher

 

I never thought I would see the day when someone complained that the banks didn't have enough political power! They have been doing great in that department for so long, they lost a little ground, but they really overstepped quite a bit too. They will be fine, don't worry.

 

It's not so much the banks being shafted as the consumer. Business in general has too much clout, not just the banks.

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In a free market, is is not up to the government to allow or disallow.

 

If they did not, there would be no free market. We would eventually have one oil company, one bank, one grocery emporium, one mass retailer and no competitors. It'd be like a sporting event with no referee and no rules. The more powerful entity would just obliterate their competition and keep doing it until there was no competition left.

 

 

 

The market is not free in its current state. The government (from primarily one political party) is choosing sides from one industry over anoher

 

I never thought I would see the day when someone complained that the banks didn't have enough political power! They have been doing great in that department for so long, they lost a little ground, but they really overstepped quite a bit too. They will be fine, don't worry.

 

It's not so much the banks being shafted as the consumer. Business in general has too much clout, not just the banks.

 

Generally speaking, consumers as a composite whole are not being shafted here. The only ones that might FEEL they are being shafted are those that feel a business is not entitled to turn a small profit on every purchase. MOST people don't look to put small purchases on plastic...and of those that were doing so, MOST won't have a problem with carrying five or ten bucks on them if their stores of choice elect to impose a minimum.

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In a free market, is is not up to the government to allow or disallow.

 

If they did not, there would be no free market. We would eventually have one oil company, one bank, one grocery emporium, one mass retailer and no competitors. It'd be like a sporting event with no referee and no rules. The more powerful entity would just obliterate their competition and keep doing it until there was no competition left.

 

 

 

The market is not free in its current state. The government (from primarily one political party) is choosing sides from one industry over anoher

 

I never thought I would see the day when someone complained that the banks didn't have enough political power! They have been doing great in that department for so long, they lost a little ground, but they really overstepped quite a bit too. They will be fine, don't worry.

 

It's not so much the banks being shafted as the consumer. Business in general has too much clout, not just the banks.

 

Generally speaking, consumers as a composite whole are not being shafted here. The only ones that might FEEL they are being shafted are those that feel a business is not entitled to turn a small profit on every purchase. MOST people don't look to put small purchases on plastic...and of those that were doing so, MOST won't have a problem with carrying five or ten bucks on them if their stores of choice elect to impose a minimum.

 

 

Businesses were NOT entitled to profit on every purchase because they agreed to a contract. They more than made it up over the long haul.

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Not entitled to a profit on every purchase? Tell us again how that concept is in step with free market operations? Seems more like a concept espoused by those that want a DumpMart on every corner to run the mom and pops out of town...

 

Also sounds like the mantra of someone who believes no deception ever occurred in the discussions of future sales when selling the merchant on the usefulness of a merchant account...

 

I'll continue supporting my small local vendors when they have items I want...and I will do so even if they impose a minimum. I tend not to put my morning donuts on plastic anyhow...the dollar coins serve that purpose, and the coins WERE put on plastic.

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Not entitled to a profit on every purchase? Tell us again how that concept is in step with free market operations? Seems more like a concept espoused by those that want a DumpMart on every corner to run the mom and pops out of town...

 

Also sounds like the mantra of someone who believes no deception ever occurred in the discussions of future sales when selling the merchant on the usefulness of a merchant account...

 

I'll continue supporting my small local vendors when they have items I want...and I will do so even if they impose a minimum. I tend not to put my morning donuts on plastic anyhow...the dollar coins serve that purpose, and the coins WERE put on plastic.

 

 

If a merchant is not smart enough to understand what they are signing up for, that is nobody's fault but his/her own.

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Not entitled to a profit on every purchase? Tell us again how that concept is in step with free market operations? Seems more like a concept espoused by those that want a DumpMart on every corner to run the mom and pops out of town...

 

Also sounds like the mantra of someone who believes no deception ever occurred in the discussions of future sales when selling the merchant on the usefulness of a merchant account...

 

I'll continue supporting my small local vendors when they have items I want...and I will do so even if they impose a minimum. I tend not to put my morning donuts on plastic anyhow...the dollar coins serve that purpose, and the coins WERE put on plastic.

 

 

If a merchant is not smart enough to understand what they are signing up for, that is nobody's fault but his/her own.

So you support the lies they get sold with the charts and graphs that tell them nonsense about average sale increasing if only they were set up to accept cards? You know, the same deceptive sales pitch that tells them that the costs are more than offset by customers spending more per transaction.

 

You prefer a world full of DumpMart?

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Guest Sprightly

Minimums over $10 remain illegal.

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Actually a 5% loss of customers would be huge even with the little "offsets" you mentioned. Keeping customers happy(or unhappy) is of far more consequence than you (and many poorly run businesses) realize.

 

Not in anyone's wildest imaginations would there be a 5% drop of in sales(that was thrown out as an example), but if there were, a drop off in sales that brought in no profits or losses would be welcome. Many businesses have found by really crunching the numbers they have many customers that cost more than they bring in. That is what they say about these customers, and while many here disagree, or rationalize it, it is the merchants who run their business, so I am thinking they may know better.

 

You want to keep profitable customers happy, and if possible make unprofitable customers profitable ones, but blindly keeping all customers happy is not usually the best thing. Some customers are just not worth having, even rich ones.

 

The main thing is they will have a choice, and even though some may make a wrong choice I think they should be able to make it, like they do with every other cost.

 

A real possibility is that banks will want to keep the small transaction customer, and will change the fee structure to be more accommodating. This possibility does not seem to be accepted here because everyone is presently focusing on their outrage, but banks want us to go for our cards without thinking, anything that changes that dynamic will get a response from them. It seems to me they will be better off lowering these fees a bit. It likely will bring in more revenue. They will respond to the market(after some posturing) the way it will be, not the way it is now.

 

Let's look at a franchised convenience store.

 

Take a pack of smokes as an example. The retail, with 6% sales tax, is $5.94.

 

CC fees take 2-3%, right off the top.

 

Franchise fees are 5% of the pretax number.

 

State minimum mark up is only 6%.

 

Should we discuss a gallon or two of gas for the lawn mower, with a profit of $.09/gallon?

 

Small credit card sales suck. You can try to convince retailers otherwise, but it's the truth. You can say it's a cost of doing business, but the small slice of the pie that pays for that (known as profit) gets smaller every year.

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Actually a 5% loss of customers would be huge even with the little "offsets" you mentioned. Keeping customers happy(or unhappy) is of far more consequence than you (and many poorly run businesses) realize.

 

Not in anyone's wildest imaginations would there be a 5% drop of in sales(that was thrown out as an example), but if there were, a drop off in sales that brought in no profits or losses would be welcome. Many businesses have found by really crunching the numbers they have many customers that cost more than they bring in. That is what they say about these customers, and while many here disagree, or rationalize it, it is the merchants who run their business, so I am thinking they may know better.

 

You want to keep profitable customers happy, and if possible make unprofitable customers profitable ones, but blindly keeping all customers happy is not usually the best thing. Some customers are just not worth having, even rich ones.

 

The main thing is they will have a choice, and even though some may make a wrong choice I think they should be able to make it, like they do with every other cost.

 

A real possibility is that banks will want to keep the small transaction customer, and will change the fee structure to be more accommodating. This possibility does not seem to be accepted here because everyone is presently focusing on their outrage, but banks want us to go for our cards without thinking, anything that changes that dynamic will get a response from them. It seems to me they will be better off lowering these fees a bit. It likely will bring in more revenue. They will respond to the market(after some posturing) the way it will be, not the way it is now.

 

Let's look at a franchised convenience store.

 

Take a pack of smokes as an example. The retail, with 6% sales tax, is $5.94.

 

CC fees take 2-3%, right off the top.

 

Franchise fees are 5% of the pretax number.

 

State minimum mark up is only 6%.

 

Should we discuss a gallon or two of gas for the lawn mower, with a profit of $.09/gallon?

 

Small credit card sales suck. You can try to convince retailers otherwise, but it's the truth. You can say it's a cost of doing business, but the small slice of the pie that pays for that (known as profit) gets smaller every year.

 

 

aren't expenses an offset to taxes on profits?

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aren't expenses an offset to taxes on profits?

 

Not in a 1:1 fashion. The deduction for operating expenses is a fraction of the actual expenses.

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aren't expenses an offset to taxes on profits?

 

Not in a 1:1 fashion. The deduction for operating expenses is a fraction of the actual expenses.

 

He knows the answer, he just wants to bring it up again! :lol:

 

Like I said another time: Theft is a deductible expense, that means a merchant should not care? Should the fact that theft loss is tax deductible be brought up when discussing it? Maybe as a compensating factor at a thief's sentencing? Laughable.

 

 

 

FYI: Post # 13 starts the tax discussion

 

http://creditboards.com/forums/index.php?s...437288&st=0

Edited by frank22

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Credit cards are just a means to an end, not a religion.

THIS may be one of the most intelligent statements I have seen yet on these forums.

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aren't expenses an offset to taxes on profits?

 

Not in a 1:1 fashion. The deduction for operating expenses is a fraction of the actual expenses.

 

but there is some offset...if a merchant can't make a profit from credit card transactions then it should not accept credit cards. or is it that a merchant just wants to more fully line his/her pockets with my money>?

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aren't expenses an offset to taxes on profits?

 

Not in a 1:1 fashion. The deduction for operating expenses is a fraction of the actual expenses.

 

but there is some offset...if a merchant can't make a profit from credit card transactions then it should not accept credit cards.

 

It is not all transactions, it is just the small ones, but the small transaction have been growing with the increase in card use, and the costs have been rising by the increase in fees. I am glad that you agree that a merchant wouldn't want to take cards on the unprofitable transactions.

 

or is it that a merchant just wants to more fully line his/her pockets with my money?

 

This is really just putting negative spin on the discussion, however it allows me to bring up a good point. If you compare the difference in profit margins, you will find a huge difference between retail and Visa. Visa's net profit margins are 35%(huge) as an example Best Buy is 3%. How are retailers lining their pockets? How come you give Visa a pass? If you think 3% is lining, what about 35%?

 

You have called the merchants greedy before, how come you don't use the same terminology for Visa? They are making huge profits and lining their pockets much more than anyone else. This to me is blind, and it proves a huge prejudice.

Edited by frank22

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Actually a 5% loss of customers would be huge even with the little "offsets" you mentioned. Keeping customers happy(or unhappy) is of far more consequence than you (and many poorly run businesses) realize.

 

Not in anyone's wildest imaginations would there be a 5% drop of in sales(that was thrown out as an example), but if there were, a drop off in sales that brought in no profits or losses would be welcome. Many businesses have found by really crunching the numbers they have many customers that cost more than they bring in. That is what they say about these customers, and while many here disagree, or rationalize it, it is the merchants who run their business, so I am thinking they may know better.

 

You want to keep profitable customers happy, and if possible make unprofitable customers profitable ones, but blindly keeping all customers happy is not usually the best thing. Some customers are just not worth having, even rich ones.

 

The main thing is they will have a choice, and even though some may make a wrong choice I think they should be able to make it, like they do with every other cost.

 

A real possibility is that banks will want to keep the small transaction customer, and will change the fee structure to be more accommodating. This possibility does not seem to be accepted here because everyone is presently focusing on their outrage, but banks want us to go for our cards without thinking, anything that changes that dynamic will get a response from them. It seems to me they will be better off lowering these fees a bit. It likely will bring in more revenue. They will respond to the market(after some posturing) the way it will be, not the way it is now.

 

Let's look at a franchised convenience store.

 

Take a pack of smokes as an example. The retail, with 6% sales tax, is $5.94.

 

CC fees take 2-3%, right off the top.

 

Franchise fees are 5% of the pretax number.

 

State minimum mark up is only 6%.

 

Should we discuss a gallon or two of gas for the lawn mower, with a profit of $.09/gallon?

 

Small credit card sales suck. You can try to convince retailers otherwise, but it's the truth. You can say it's a cost of doing business, but the small slice of the pie that pays for that (known as profit) gets smaller every year.

 

 

aren't expenses an offset to taxes on profits?

 

 

Expenses are an offset to profits.

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aren't expenses an offset to taxes on profits?

 

Not in a 1:1 fashion. The deduction for operating expenses is a fraction of the actual expenses.

 

but there is some offset...if a merchant can't make a profit from credit card transactions then it should not accept credit cards. or is it that a merchant just wants to more fully line his/her pockets with my money>?

 

What is the purpose of a retail business?

 

A)Fulfill your desires

 

or

 

B)Make money

 

If you answered A, you selected how they go about achieving the correct answer, which is B.

 

Yes, the merchant wants to make as much as possible from each transaction. Why wouldn't they?

 

What you want is a retail charity.

 

Perhaps you should start one and see how that goes...

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"small transactions are the problem"

 

Really frank? Really? Go see if a car dealer thinks that if you tell them you wish to buy a new car using a credit card. They will "adjust" the price and not give you as good of a deal. But if you go over to their parts counter and buy a $10 container of oil and you can bet that credit card will be gladly accepted without any hesitation at all.

 

The retailers want it both ways. They don't want to pay the fees on small transactions, but the fees are also very high when you look at a larger sale, especially of a low margin sale to begin with.

 

You cited Best Buy as an example. So you go in there and buy a new electronic of some kind, no accessories, and have them price match the cheapest price you can find on the internet. This is a large purchase. You pay with a credit card. There goes what little profit they were making... unless you buy some higher margin accessories or an extended warranty.

 

The retailer's profit is not only about the transaction amount but what the customer buys.

 

If I go to the gas station and buy a soda for $0.99 retail with a cost of about $0.30 from the fountain and charge it and it costs them 16 cents to take my card, they are still making a good bit of money. But if I buy the $0.99 retail and cost of $0.80 special 20oz bottle of soda from the cooler that likely cost them about $0.85 and pull my credit card out then they are not making much on me.

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As far as MasterCard and Visa go, remember, they provide the processing network, but they do not process the transactions; third parties like Heartland, Fifth Third, Paymentech (Chase), etc. do that. MasterCard and Visa take a very small amount of the transaction fee from each transaction. The majority of the processing fee goes to the processing company.

 

Do you have any clue what the costs are with setting up a network to process credit cards, one that enables customers globally to use these cards as a payment mechanism? It isn't just magic. The costs to set these networks up and front portions of the cost to create the connectivity and similar to do this in some countries that aren't very well developed isn't free.

 

My biggest gripe with the whole processing fee is that "intercharge" rate, that little 15 cents that is tacked on in addition to the percentage. I think they should just have a percentage and be done with it. But then the retailers complain that they are getting killed on large transactions because the percentage is too high and they would rather have a small flat fee plus a percentage than just a percentage... then they start complaining that small flat fee is costing them too much for the small transactions.

 

In the end, I am not concerned and do not think it will be difficult to use the cards for small transactions despite any new proposed legislation.

Edited by thelowpriceleader

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"small transactions are the problem"

 

Really frank? Really? Go see if a car dealer thinks that if you tell them you wish to buy a new car using a credit card. They will "adjust" the price and not give you as good of a deal. But if you go over to their parts counter and buy a $10 container of oil and you can bet that credit card will be gladly accepted without any hesitation at all.

 

The retailers want it both ways. They don't want to pay the fees on small transactions, but the fees are also very high when you look at a larger sale, especially of a low margin sale to begin with.

 

 

Small transactions are the problem with the minimum requirement, that is the title of the thread and what we are discussing. Bringing up other issues does make the conversation more complicated, and usually leads to the main topic getting lost in confusion, I think that is often the goal. The issue of the car dealers is not related to the retailers we are discussing.

 

Saying the retailers want it both ways is negative spin, the two issues do not come up in the same establishment, each is an extreme and the normal flexibility a retailer has for others costs are not allowed, that is the problem. You are insisting the two extremes get treated in the exact same way as the normal transactions. The CC fees are not designed for these transactions. They could be, so perhaps the new rules will spur Visa/Mastercard to change their fee structure, this is the easiest solution and could actually help them increase revenue by spurring both low and high value transactions. We might agree on this, at least it being a good outcome?

 

You cited Best Buy as an example. So you go in there and buy a new electronic of some kind, no accessories, and have them price match the cheapest price you can find on the internet. This is a large purchase. You pay with a credit card. There goes what little profit they were making... unless you buy some higher margin accessories or an extended warranty.

 

The retailer's profit is not only about the transaction amount but what the customer buys.

 

If I go to the gas station and buy a soda for $0.99 retail with a cost of about $0.30 from the fountain and charge it and it costs them 16 cents to take my card, they are still making a good bit of money. But if I buy the $0.99 retail and cost of $0.80 special 20oz bottle of soda from the cooler that likely cost them about $0.85 and pull my credit card out then they are not making much on me.

 

 

I only brought up BB because I wanted a quick retail profit number to compare retail profits to Visa/Mastercard. The retailers were called greedy(paraphrased in this thread, but actual in others) and I wanted to show that if greed is an issue you really need to look at the CC companies way before you get to the retailers. It shows that there is a blindness to the real numbers. My incidental use of BB allowed you to get into another issue, but the point was ignored. In your example. The cost fee of $.16 is lower than would be normal. The real cost would be a little higher. This highlights that the CC fee would be about the cost of of the goods themselves. Basically you are doubling the retailers costs in these transactions. The amount of these small transaction has been growing, so a growing number of smaller retailers transactions are becoming unprofitable. A real issue.

 

As far as profits being a result of exactly what is purchased. Yes, pricing requires flexibility, and they are allowed to be flexible with every cost of business, except this one. That is the problem.

Edited by frank22

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