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comment by b_b
b_b  ·  3053 days ago  ·  link  ·    ·  parent  ·  post: Do you have cash on you?

I use cash as often as possible when buying small ticket items, especially from small businesses. I like rewards as much as the next guy, but if I go to my local coffee house and buy a coffee and a muffin for $5, I don't think it's right for them to have to pay on their already thin margins. I almost always have some cash on me, the exception being when my wife, knowing this information, uses me as an ATM, because she forgot to go. The proliferation of credit cards, obviously, is not free, as you well know. We're paying a high collective price for not using cash. Amex isn't giving me a free plane ticket every year out of the goodness of their heart.





thenewgreen  ·  3053 days ago  ·  link  ·  

Most credit card processors, for something like a coffee shop, will charge around 2.5 to 3% per transaction. They may include a $.05-$.10 fixed cost as well. Despite your statement, coffee shops actually have pretty robust margins. No doubt, they have small gross profit dollars per transaction, but the margins are pretty healthy. I suppose I am a consumer that thinks a coffee shop should be smart enough to build in credit card costs int o their business model. Otherwise, they're idiots. Cash is increasingly the exception and its not going to be around much longer, that's just the way it is. Businesses exist to convenience us, I as a consumer do not exist to offer convenience to the business.

mk  ·  3053 days ago  ·  link  ·  

Paging cgod. How significant is the payment difference for you?

cgod  ·  3049 days ago  ·  link  ·  

Square takes 2.5% off every credit transaction.

Credit accounts for about a third of my transactions.

Square will "earn" about 1% of the money I bring in this year.

user-inactivated  ·  3049 days ago  ·  link  ·  

Did you have credit card transactions figured into your prices from the get go?

cgod  ·  3040 days ago  ·  link  ·  

My pricing was mostly based on what other coffee shops in the area charge and the character of the neighborhood.

_refugee_  ·  3053 days ago  ·  link  ·  

Thanks for pointing this out, tng.

I'd also like to say that credit card processing fees are part of the cost of doing business and if a business owner isn't making a net profit on his business because he didn't account for these fees, there are much larger issues going on than CC network fees.

I feel similarly about my friend who is self-publishing her 3rd book of poetry. Each book has been funded by Kickstarter. I do not support her Kickstarter - if you are publishing and selling a book I think you should be able to front the cost of publishing and make the money back in the traditional way, not the "get everyone else to pay my expenses for me" way - especially as it is her third instance of doing this. Do it once, sure, that's cool and arty. 3 times? Now you are clearly relying on your friends' bankroll to make your dreams come true, because apparently you can't achieve them any other way.

(I also know a small business owner who did a Kickstarter to help with his business operating costs. I was very negative about this as well. Businesses are not charities. If you cannot either front the money, or get a loan, so that you have the capital to run your business - then maybe what the world is telling you is "don't run a business," not "expect that the community will fund your business for free (and with zero accountability for that money) so that they can later fund your business by using it." )

b_b  ·  3053 days ago  ·  link  ·  

Yes, I'm sure everyone prices it in. I'm not suggesting that business owners are stupid enough not to do that. I'm suggesting that 2-3% of our expenditures shouldn't be handed over to the banks. Finance already steals enough of our money. Voluntarily giving up cash contributes to their continued success in doing so. 2-3% on every transaction is essentially a sales tax that only benefits a very few people.

thenewgreen  ·  3053 days ago  ·  link  ·  

There is no doubt that it is a market ripe for disruption. It's one of the reasons I believe some form of cryptocurrency will eventually destroy the credit card industry. Till then, I'll be using my rewards card to get my points. I buy enough small ticket items a year to make for a significant amount of points. Why wouldn't I?