tag:blogger.com,1999:blog-7828714141383213600.post2363593485947616354..comments2023-09-09T21:06:41.688-07:00Comments on It's Pub Night: Belmont Station's New PricesBill Nighthttp://www.blogger.com/profile/09202318621724165312noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-7828714141383213600.post-59813911009518538762009-11-09T04:30:16.896-08:002009-11-09T04:30:16.896-08:00Kevin and Joe: thanks for the added data points. ...Kevin and Joe: thanks for the added data points. Still waiting on some examples from Chris.<br /><br />Bill F: The reason you're wrong, is that retailers have to compete on price. If a small retailer has higher credit processing costs than a large retailer, and they fold the costs into the price, they're at a disadvantage.<br /><br />Belmont Station is under stiff competition from grocery stores in the area, as this timely <a href="http://twitter.com/kscaldef/status/5548055383" rel="nofollow">tweet</a> illustrates. Grocers already have the advantages of bigger buying power, smaller overall margins, and the ability to shift margins around the whole store to make some money (loss leaders).<br /><br />You're right that there are many valid reasons to use a credit card, and believe me, I'm a heavy user. But charging for the cost of that service is not punishment, it's consumer choice. In fact, I'd argue that the reverse is true. Folding credit card costs into the price for everyone -- think of it as a 4% sales tax -- punishes the cash customers.Bill Nighthttps://www.blogger.com/profile/09202318621724165312noreply@blogger.comtag:blogger.com,1999:blog-7828714141383213600.post-59538674177713708332009-11-08T14:19:47.384-08:002009-11-08T14:19:47.384-08:00Technically speaking, merchants aren't allowed...Technically speaking, merchants aren't allowed to charge more for using credit cards. However, the common loophole that is rarely enforced, is that the merchant is allowed to offer a "cash discount". <br /><br />I understand that small merchants can be greatly impacted by the extra charges, especially those from AMEX, which are the worst. I just feel that merchants need to adjust their pricing accordingly across the board to buffer the extra expenses that accepting credit cards creates.<br /><br />A customer should not be penalized for using a credit card. There are many valid reasons people prefer them, such as getting award points or miles, or just people who don't like carrying around alot of cash. Just don't punish the customer.Bill Fnoreply@blogger.comtag:blogger.com,1999:blog-7828714141383213600.post-76572105863023932002009-11-06T12:37:17.345-08:002009-11-06T12:37:17.345-08:00My brother in law owns a cafe in Seattle and has s...My brother in law owns a cafe in Seattle and has said that credit card transaction fees are a brutal drag on profitablity. Problem is, sales are lost if credit cards are not an option. I commend Belmont Station for their approach to pricing, particularly since they're lowering cash prices, not raising credit card prices. I've read in a number of places that that consumers can do a huge favor to small/local businesses by paying cash. That being said, I never seem to have any on me!joenoreply@blogger.comtag:blogger.com,1999:blog-7828714141383213600.post-9956693552786681982009-11-06T08:55:41.001-08:002009-11-06T08:55:41.001-08:00This year has been horrible as far as processing f...This year has been horrible as far as processing fees and interchange rates go. So, I hate to see prices hiked, I can understand The Belmont Station's side.<br /><br />I write code for a regional retailer with around 70 locations. My main area is maintaining and enhancing the software that runs our cash register systems. This puts me right in the middle of dealing with this issue. It used to be that debit was a flat fee. When we started taking debit it was under $.20 per transaction. Once a purchase got over a few dollars, debit was a much cheaper than the 3%+ for credit card processing.<br /><br />For large purchases, debit is still cheaper than credit, but the point of savings has shifted to about $25.00; less than that credit card is the way to go. The bullshit thing is, credit card companies and banks are aware of this and try to direct customers to use their cards in the way that benefits them the most. This is they are pushing so hard to get customers to use debit cards on small purchases, where the retailer pays the most. This is also why many debit "rewards" only accumulate if your debit card is processed as a credit transaction. This leads customers to use their debit card as a credit card for large dollar purchases, again costing the retailer more.<br /><br />I've been told that many of these hikes are due to the banks being more heavily regulated when it comes to consumers (credit card and loan interest rates). since they can't gauge these customers any more, they are trying to make up for lost revenue on the merchant side.<br /><br />Be lucky you guys at The Belmont Station aren't big enough to be required to perform "certification" whenever you make a tweak to your cash handling systems. This used to be a free service offered by the bank to verify you were providing all the information needed to get the lowest interchange and processing rates. Now it is required and we pay $20,000 to $40,000 each time we do it.<br /><br />We also had to start performing outside audits this year (at $60,000 a whack) to verify that our card handling systems meet VISA/Mastercard security requirements.<br /><br />I think lower cash prices are a fair way to deal with these increase. I have started to see gas stations do it a lot. There are also some convenience stores around Eugene that just charge a flat $.45 fee for debits/credits. At my work, we can't realistically charge different prices based on tender. Instead we are looking at checking debit cards as they are swiped to see if they can use a credit card processor. If the purchase is low enough that processing as a credit is cheaper, we would use that method. It won't cover all the increases, but every penny counts.<br /><br />Oh the joys of dealing with credit cards.<br /><br />Cheers!<br />Kevin<br />beerandcoding.comKevinhttps://www.blogger.com/profile/06493321326831765055noreply@blogger.comtag:blogger.com,1999:blog-7828714141383213600.post-50423057410423077492009-11-05T21:04:00.620-08:002009-11-05T21:04:00.620-08:00Chris, thanks for the information, I didn't re...Chris, thanks for the information, I didn't realize prices at Belmont went down earlier.<br /><br />Do I have the right figures, that card processing is 50 cents + 3% of the transaction? Is it the same for credit or debit? And is there some kind of recurring subscription or equipment cost?Bill Nighthttps://www.blogger.com/profile/09202318621724165312noreply@blogger.comtag:blogger.com,1999:blog-7828714141383213600.post-6833441930806236402009-11-05T19:05:48.026-08:002009-11-05T19:05:48.026-08:00Hi Bill,
We've been steadily decreasing price...Hi Bill,<br /><br />We've been steadily decreasing prices for months, and the dirst thigs we dropped were the topp 100 or so 6pks and topp 100 or so big bottles in an attempt to get the prices down to grocery store level. Things like the Caldera 6pks were already so low (lower than Freddies) that we couldn't bring them down any further. This latest round of price cuts simply applied that formula to everything in the store, so if you're constantly buying popular items than it wouldn't appear to be a decrease. <br /><br />On the other hand, many of the slower moving 6pks and spendy Belgian type things came down as much as 8-10% (cash price) versus what we used to charge. <br /><br />As for the debit thing; it's no longer a simple flat $.50 fee to us, we now pay a percentage on those as well, so we aren't able to distinguish debit vs. credit. <br /><br />I'm sending this from my phone and don't have prices handy, but tomorrow I'll try and give you some concrete example of the reductions.Chrishttps://www.blogger.com/profile/04670279083285348299noreply@blogger.com