I feel like taking a crack at paraphrasing cosmosdan’s two main points, as I see them.
You, Visa and the Merchant are in a three way agreement. You have chosen a Visa account because it has promised to line up agreeable Merchants. The Merchants contracted with Visa, and thus have agreed to be agreeable, so as to attract Visa’s Yous. People here are mainly mad at Merchants for not abiding their contract with Visa. cosmosdan is suggesting you be mad at Visa for not honoring it’s contract with You.
Also, at least give the benefit of the doubt that the small shop owner is acting in good conscious when he believes he must set a minimum charge.
His secret underground point: Realize that supporting local businesses might actually trump pure dollar values for quality of life equations, you geeks.
I’ve had very few customers complain about asking for an ID. About 1/3 to 1/2 customers now have “ASK FOR ID” written in the card instead of a signature. Technically the card isn’t even valid at that point. Should we refuse it because the customers haven’t complied? One place refused to accept mine for that reason.
I’ve checked literally tens of thousands of signatures over the years. Some signatures {perhaps 1/2} are very distinct and you can easily match them without ID. Others have a pretty sloppy indistinct scribble for a signature. In that case the agreement instructs us to call the purchase in. I imagine we’d piss of more customers by doing that than the few who refuse to present ID because of the merchant agreement. Most customers actually thank me for asking.
For the few that do want to complain I’m happy to follow the agreement to the letter which means the purchase may take twice or three times as long if I have to call. Customer’s choice.
The question we asked relates directly to the OP as much as your assertion that handling cash costs about the same. The OP was pissed that a surcharge was paid for CC use. We’re asking if it the prices were a bit higher with a sign offering a discount for cash is a more acceptable way of accomplishing the same goal. It’s hardly a hijack.
It’s not a demand. It’s a request for courtesy. Simply answering the question asked would move the thread along more smoothly. My cites of my own years of personal experience are at least as valid as you telling me about your bro. Please respond to my point concerning losses due to CC fraud etc.
Perhaps my assumption about CC transaction fees being obviously more costly for the merchant are off and I’ll gladly consider valid information. You haven’t provided any. Other posters have provided pretty good information on both sides.
here is a brief article that confirms what doreen posted. The OP was in an Ice Cream shop that was charging 25 cents per CC transaction. Odd coincidence isn’t it? Does it take a lot of imagination to figure out what paying 25 cents overhead for each transaction does to the profits of an ice cream shop?
Why is it better? The numbers from Doreen and the poster working at the convienience store seem more up to date and relevant to this OP.
That was interesting but 10 years old. We’re also talking specifically about the cost to small business. I’ve already responded to your point about employee theft etc. There is theft from customers and employees associated with using CCs as well isn’t there? Please answer a direct question if you can?
If employees don’t properly check signatures and follow CC procedures then the merchant loses money on charge backs. I have direct experience with this happening. If a customer is using someone else’s card and the employee doesn’t check properly the charge can be successfully denied by the card holder which results in a charge back to the merchant. In that case they have lost the merchandise and the payment. Dishonest employees will also aide their friends to make bogus CC purchases. That cost the company. Dishonest employees in customer service will give their partners credit for items they haven’t actually returned. We had an employee at one store who was processing CC payments for his girlfriend that she wasn’t actually making. Also 1st hand experience.
If you’re going to factor theft into dealing with cash then you have to factor it into CC as well. Isn’t that right?
Let’s compare apples to apples and simplify by just dealing with the fees associated with processing cash vs. CC transactions.
The reason I have yet to show that is because it is not the argument I’ve been making. Nobody has implied merchants are losing money by taking CCs as in negative profit. The point is about reduced profit margin. If you’re so concerned about a hijack please stay on subject. The point is that the increased use of CCs for small transactions has increased the overhead associated with accepting them, thus lowering the profit margin for merchants, especially small independent ones who don’t have multiple stores to increase volume. The fact is that lots of merchants have responded to the changing payment habits of customers by imposing minimum purchase amounts or , as in the OP, adding a small surcharge for CC purchases. Why do you suppose so many merchants have done that? Please answer this direct question.
I know that all forms of payment carry risks and costs. Again Not the argument. I suppose it’s possible that all these merchants are wrong and you know more about their business than they do but you haven’t given me *any *reason to believe that.
It sounds like I have a shit load more personal first hand experience in this area than you do. You’ve provided exactly one brief anecdotal story about what someone else told you. Then you’ve avoided responding to my point about CC loss through fraud and other charge backs.
Once more. Our question directly relates to the OP and is not a hijack. I’m fairly certain the subject will come up again if it’s not answered here.
Sure. CC fees are now an accepted part of overhead just like rent, payroll etc. I think what we see is this particular part of overhead has adversely affected the small independent business owner more. as you have experienced.
I appreciate your attitude of understanding toward your local business. It’s what I’ve encouraged in the posters who have complained. I’d hate to see small unique shops and restaurants vanish from the landscape to be replaced by chains. A friend of mine went on vacation recently and complained that even traveling several states away , as chains replace small local businesses every town starts to look exactly the same.
I wonder how small local businesses can effectively communicate this to customers without offending people. Carry a bit of cash and patronize your local shop.
Here is an interesting article about gas stations changing their pay structure for gas and offering a cash discount.
I found this statement pretty telling.
Not hard to figure is it? CC companies use gimmicks like miles and cash back to encourage customers to use their cards for more purchases. Do they do this because they are benevolent entities and deeply cherish their customers? They do it to make money which is the basis of any business. More CC use,= more transaction fees= more profit. For them These transaction fees are paid for by the local merchant and cut into their profit {the reason they have a business} so they are looking for a way to pass this cost on to customers. It’s business plain and simple. Extra service is not free to provide and customers can expect to pay for it.
I first started working retail in Sears many moons ago. I remember a customer saying back then “I know I pay a little more at Sears but I don’t mind because of the service”
That customer understood the connection that better service costs the store more so they have to charge a little more to provide it. The consumer is free to choose better service at a higher price or lower prices. Over the last two decades customers have told retailers that low price matters more than good service and retailers have responded. Now we see the increasing trend and the move toward a cashless society. Swiping the card is so convenient. That’s fine, but it cost money for the merchant and they are trying to find a way to defray that cost. If you want the added service and convienience you have to expect the expense.
Lots of people have said that accepting CCs brings in a lot more business. I think CC use has been pervasive enough long enough and that is no longer true. People buy what they want and/or need. I don’t believe most merchants see increased volume simply by accepting CCs. They do see increased overhead in the form of CC fees when customers pay for smaller purchases with CC rather than cash.
Finally, an authority who can settle some outstanding issues.
Is it the policy of the credit card issuers to not enforce the “no minimum purchase” and “no service charge” rules in the merchant agreement? Can you offer any figures on the enforcement of these rules? cosmosdan’s entire defense of merchants flouting these rules seems to be based on weak enforcement, so if you could clear this up, it would be appreciated.
I take that to mean that larger merchants have the volume to negotiate lower transaction fees and processing. Is that true?
That would mean that small independent businesses lose more profit margin to higher fees wouldn’t it?
You do that to insure your* profit*. Correct? Nothing wrong with that. That’s why any business operates. There is competition for accounts. Are the larger accounts more desirable than the small independent merchants?
Also, concerning franchises. Does the main office of franchises such as McDonald’s
negotiate the merchant agreement for all their locations or do the regional owners have to negotiate their own?
No question about this. CC have successfully pervaded the way we do business and that is not a point of contention or complaint in this thread.
Well, if the person paid with cash there would be little chance for a charge back and no transaction fee correct? We’re discussing low dollar purchases for the most part. Doesn’t it save the merchant a significant amount in fees if more customers pay cash for purchases under $10? That’s especially true for merchants whose inventory includes a lot of items in that price range yes?
Evidently interest and fees more than cover the risk of non payment by the card holder. Thats as it should be. Merchants do take hits in CC fraud and charge backs though don’t they?
I don’t understand this or agree. Did you ever work behind a register? The merchant agreement specifically asks the merchant and their employees to verify signatures does it not? You’re right. Cashiers are not are not graphologists which is one reason CC fraud is such an issue. Lazy cashiers often don’t even check which allows a thief to get merchandise. Others may glance at a signature but seldom dare to challenge it.
So the thief gets the merchandise and the merchant has no binding signature as required by the contract.
Tell me, in that case when the card owner has not made the purchase and we have no matching signature because the merchant or their cashiers have not followed proper procedure, who pays for the merchandise then?
Really? If the signature on the receipt does not match the signature of the card owner the card issuer eats the loss? What is required for the merchant to prove the BAU submission policy was followed in such a dispute?
Well that’s sure part of it. In another thread we had a business owner who got form letters about his $20 minimum on a regular basis but they never canceled the service. My other question is how CC users would react if merchants raised prices but offered cash discounts which has a similar result but technically complies with the agreement.
In an article I linked to that seems to be what lots of gas stations are doing.
btw, I feel certain it is not their** policy** to not enforce the agreement. The question is more about their actual practice.
So if **Maeglin ** can show that the no minimum/no service charge part of the agreement is, in fact, enforced as vigorously as the rest of the agreement, will you concede the point?
I’m not sure how he can show that and have serious doubts that it can clearly be demonstrated, but I’ll gladly look at any information provided. I’m more interested in how the consumer is responding to this trend and how they might respond to a raise in price with a cash discount since it serves the same purpose and maintains the agreement.
You mean as clearly as you have demonstrated that the rules are rarely enforced? That’s the only standard I am holding **Maeglin ** to.
I am in favor of competition on a level playing field, where everybody obeys the rules, and the consumer decides who should stay in business, and who should go tits up. Shopkeepers have no inalienable right to stay in business.
So long as merchants regard the agreements they signed as mere suggestions, I would agree.
I don’t like it when the rules are not enforced. But I fail to see that as a license for merchants to disregard their responsibilities. Consumers have a great deal more power to wield over merchants than they do CC companies. It is much easier and ultimately more productive to stop patronizing merchants who break the rules, than it is to complain to CC companies for not enforcing them.
What I meant was I suspect larger multi store cooperations can more easily absorb the cost of transaction fees by sheer volume. My guess is they also can negotiate lower fees to help that out. How is that a level field?
I guess I see it as a balance of responsibilities of all those concerned. They have some responsibility to their employees and family to succeed don’t they? They have to react to competition. I concede that raising prices and then offering a cash discount is a method that is more in keeping with the agreement. The customer has some responsibility to be realistic about how business works. When overhead goes up merchants respond and customers never like it, but they should understand that it’s a reality of business.
Your last sentence is revealing IMO. So if the agreement is not being kept you’ll stop patronizing the merchant in hopes they change policy or go tits up which is their just deserts, but you’ll keep using the card even if the issuer is not keeping their agreement with you? Is that a reasonable interpretation of your statement?
Get back to me when your suspicions rise to evidencery level of anecdotes.
That is of no concern to the consumer.
Yes. If I thought that cancelling my CC would have any impact whatsoever, I would do it. The only thing that reveals is a recognition of the realities of the marketplace.
Perhaps some other poster will offer some information.
It obviously is because it affects how business is done and we’re here talking about it.
Exactly. That’s what I’ve been suggesting all along. You can excuse the CC company for breaking their agreement with you under that phrase, but not the merchant. See my point now?
Of course consumers are free to respond however they wish to, but let’s not kid ourselves that it appropriate righteous indignation over some principle.
It appears the merchants are working on this issue. Check out unfaircreditcardfees.com. I see there is a congressional hearing on the subject of “interchange” fees tomorrow.
