Credit and debit card start up charge

[Jason Studer]

Cosco is one that I know for sure, my son works there part time while he finishes school.

I guess a Convenience Fee would be a better term or cash discount

I will be posting cash price and credit card prices separate.

I am not sure what my cost are going to be yet, but after reading other threands on this forum it sound like people are being charged 8%to 12% I might go as low as 8% and if it is a little higher absorb that myself.

I have been asking customers for months how they fell if I were to add a fee or "cash discount" to use a C.C. everyone has been totally fine with it and under stand that for them to be charged an extra 40 cents or whatever is no big deal to them.

 

[chaz]

Assuming you mean Costco, is charging a credit card fee, I believe you are simply WRONG. Costco currently only accepts Amex for credit purchases, and that changes to Visa sometime in 2016. Costco, has negotiated some darn good C/C fees.

You seem set on a very high % convenience fee, and count down. Go for it.

 

[bighead]

As a consumer I hate being di#$ed for that "convenience fee" by a business, and all things being equal I will not patronize a place that does so.

As a business strategist I believe it is a cost of doing business, and that we should do what we do with our other costs and bury them beneath the price which we charge our customers.

In practice I am $2 for 3 min for cash, and $4 for 8 min. start with count up and a max of $15 from my self service customers. I make more money off the credit card customers, and I had my first chargeback in 5 years a few months ago. It was for $5 and not even worth my time to challenge.

FWIW

 

[PaulLovesJamie]

As a consumer I hate being di#$ed for that "convenience fee" by a business, and all things being equal I will not patronize a place that does so.

As a consumer, I often pay cash and I hate being di#$ed with a higher price to cover baked-in cc fees for other consumers, I will not patronize a place that does so.

Yes that is tongue in cheek, but the logic is sound - its simply the other side of the same coin.

Look, I view this as simply one piece of my pricing strategy, which is specifically for my customers in my market. CC is still <20% of revenue, and the number of businesses here with "cash only" signs has increased in the past few years. I very strongly believe that if I baked CC charges into my prices - ie count them as a "cost of doing business", I'd effectively be forcing my cash customers (the majority) to be subsidizing the cc customers.
I do not believe that is the best way to serve my market.

Not too different from the decision to accept mudders - if I were in Colorado I'd put out a "mudders welcome" sign. If I were in a city where <1% of my customers made 100% of the mess, should I charge every customer a higher price for "cleaning" and call it the cost of doing business? Or should I keep my prices lower for the majority of my customers and forbid mudders? Which option serves my market/customers better?

I might be wrong, I think about it quite a bit. But my market is NOTHING like some of you guys in more urban areas.

 

[chaz]

At least in my area, CC equals higher spend, so any fees are not an issue as I'm making more money with count up and with those that simply want to pay by CC. Plus less cash to handle saves time! Time is my most valuable asset!

 

[JMMUSTANG]

Fee or no Fee?
Being in the self service wash business since 1976 I can tell you without a doubt that paying the cc fees are one of the BEST thing that has happened in our industry. That and having the ability to accept bills in the bays. Also the Bubble Brush.
It's also nice to see the money in my bank account in the morning from home.
I didn't have to open the safe and haul quarters to the bank.
If you have an issue with the fees change your time or charge more per minute/seconds to make up the difference.
This is not rocket science
Don't laugh it's true.

 

[Earl Weiss]

As a consumer I hate being di#$ed for that "convenience fee" by a business, and all things being equal I will not patronize a place that does so.

Being a frequent cash consumer I hate being dissed to subsidize the the extra cost of CC transactions partly passed thru to me. Fair is fair. If you cost the business more, they should charge you more.

In addition to the wash I sell gasoline. So, the high CC costs vs margin on a gallon of gas plus having the CC companies stick me for alleged fraudulent charges really chafes. Sadly, competition requires that I accept CC and not charge any different.

 

[chaz]

Here's a thought....as you are a cash guy... Charge the same as everyone else for the gas, but then offer a discount for cash. Then you will be honoring your belief that cash should mean lower price to user as they are costing you less. Why would competition affect that?

 

[Earl Weiss]

Here's a thought....as you are a cash guy... Charge the same as everyone else for the gas, but then offer a discount for cash. Then you will be honoring your belief that cash should mean lower price to user as they are costing you less. Why would competition affect that?

Chaz, I can see you have not spoken to many gasoline retailers about this.

Been involved in retail gas for 40+ years. When gas was 25.9 and we were .02 higher than the guy down the street we would hear about it and volume would suffer. "Bank Cards" really did not exist. Only oil company charge cards at that time.

Now gasoline is $3.25.9 and if we are .02 higher than the guy down the street volume suffers. An old saying is "Cars have wheels" . Gasoline is one of the few industries where price, including sales tax is prominently posted (The car wash industry late to the game $3.00 prominent signs not withstanding) In Chicago you must post in the same size font the price for all grades and all pricing levels
such as cash / credit & / or with or without wash purchase. So, the competition will not let you undercut their lowest price tier.

The only way it would work is to level the playing field The more expensive customer gets charged for extra cost. If it's a 10 cent transaction fee plus a percentage that should get tacked on.

 

[chaz]

Wow...this thread is getting way off base, and I'm partly to blame. Oh well.

Nope, I have never spoken to any gas people.

But it seems like simple math. If you are ok charging $3 per gallon cash or credit and thus matching your competition, I'd think you'd be ok giving say a 5cent per gallon cash discount. I'm guessing you are paying about 2% c/c fee plus maybe a transaction fee. That's 6cents on a 3 dollar gallon. Giving 5cents of that to your cash customer you still make a 1cent plus the transaction fee.

 

[Earl Weiss]

Wow...this thread is getting way off base, and I'm partly to blame. Oh well.

Nope, I have never spoken to any gas people.

But it seems like simple math. If you are ok charging $3 per gallon cash or credit and thus matching your competition, I'd think you'd be ok giving say a 5cent per gallon cash discount. I'm guessing you are paying about 2% c/c fee plus maybe a transaction fee. That's 6cents on a 3 dollar gallon. Giving 5cents of that to your cash customer you still make a 1cent plus the transaction fee.

If you had spoken to any gasoline retailers they will tell you your simple math ignores the competition factor. If I am the only one with a 2 tier price structure the single tier competition will match my lowest posted price thereby siphoning away my sales volume.

This will only work if there were a widely used system to pass direct costs to the consumer who causes the merchant to incur the cost. The consumer can easily avoid the cost by tendering cash.

Seems a trend in retail gun sales. Cash Price is posted. CC purchases incur a surcharge. Same with Coin sales. Perhaps more merchants get on board when the gross margins on the sale are small.

 

[chaz]

But I guess there is enough margin (or profit from other items) that would allow the single tier piece guy to match your cash price while still accepting credit. They can't loose $ on gas unless they are making it somewhere else.

 

[Earl Weiss]

But I guess there is enough margin (or profit from other items) that would allow the single tier piece guy to match your cash price while still accepting credit. They can't loose $ on gas unless they are making it somewhere else.

Again, your guess may be right or wrong. They may use the gas as a draw to other profit centers. C- Store, Wash, Lube. They may have lower overhead due to a lower ,mortgage, real estate tax structure, or in a neighboring down with lower gas taxes.

All of this ignores the basic fairness doctrine of "user pays". While the public at large needs to subsidize uses deemed to be for the public good, there is no public benefit basis for the cash customer to subsidize the CC user.

America is a wonderful country and you are free to disagree that users should pay for what they use.

 

[Randy]

I have a good friend who owns a Union 76 gas station “C” store and he does real well. He charges 8 – 10 cents per gallon more for credit/debit card sales, he loves the credit/debit card sales because he makes more off those sales, about 5 cents per gallon more. Every gas station here charges 8 – 10 per gallon more for credit/debit card sales. His cash price this morning was $2.39.9 and his Credit/Debit price was $2.48.9. The ARCO across the street was $2.19.9 cash and $2.29.9 for Credit/Debit.