Let's Talk: Cash or Credit?


Technology has really afforded us tremendous convenience and we all are pretty much the same, “let’s do things as efficiently and quickly as possible”! Some things though are not as they appear and one of those is related to the biggest convenience we would be hard-pressed to live without: credit and/or debit cards.

I have heard many people complain that some small businesses and service providers do not accept credit card payments. It may be difficult to understand why a business would not elect to allow payment by credit card when it is such a convenience to the consumer (and likewise, often times, annoyance when not available as an option).

I DO accept credit card payments but quite honestly it is expensive; there are associated fees and I can understand why some small businesses decide against this payment “convenience”. This morning I received George Whalin's Retail Management E-Letter on this very subject. I thought it would be helpful to share the basic points with consumers too, so that when you are met with the dreaded, “Oh, I’m sorry, we don’t accept credit cards”, you have a better understanding of the possible reasons why.

Among the many issues facing merchants today is the ever-increasing costs of taking, handling, and dealing with credit and debit cards.  Retailers, on average, pay out anywhere from 2% to 3% of sale fees – in addition to monthly and transaction fees. This may seem small yet those fees generated more than $62 billion to retailer costs in 2009 as reported by The Nielsen Report. Even Paypal assigns rates equal to about 2.9% + $0.30 per transaction. For a small business, that adds up to a substantial amount.

Many times retailers are charged per “swipe”. For example, if a salesperson/retailer scans a card through the card reader and it doesn't go through so they scan it again (possibly several more times). This can result in additional fees from the bank or card processor, varying among credit card processors.
Over the last two years, there have been significant increases in credit and debit card processing fees and costs. On July 1st, 2010 this will change again when two things will occur:
  • Processing fees will see across-the-board increases
  • 25 % of the equipment used to process these payments will become inoperable (which means retailers will need to purchase new equipment) 
(Source: George Whalin's Retail Management E-Letter )
As stated previously, my business, Storibook Designs does accept payment by credit card. It is a service that I've always felt I couldn't possibly go without offering.  As fees continue to increase though, I sometimes feel that business owners are between a rock and a hard place.  The cost of providing this service is something that I watch carefully and come next week, when the new changes go in to effect, you can be sure that I will be looking at the charges with closer inspection to see how it affects the bottom line.

How about you, as a consumer/shopper, do you find it annoying if a business does not accept credit card payments? Will you shop elsewhere if credit card payments are not allowed?

If you are a business owner, do you or do you not accept credit card payments?

I’d love to hear your feedback - consumers and fellow business owners alike!

Thank you ~ Sarah
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Craftsmanship: custom artistry by hand

Craftsmanship: custom artistry by hand
At Storibook Designs we create custom designs by hand; here it is not just sewing, it is art!