SWhether it’s 50/50 with Venmo, paying with the Starbucks app, or tap-and-go on your phone, the way we pay has changed forever. But while our options have changed, and continue to change, some small business owners are forcing us to either keep counting the bills or jump headfirst into ideas for their future. It seems that he has decided on one or the other.
A great example from my hometown is the owner of a restaurant in South Philadelphia that “doesn’t accept credit cards” and instead forces customers to use an ATM machine that conveniently charges a $4.50 fee to withdraw cash. ing. Everyone needs to do this because no one carries cash these days.
Or the owner of a convenience store near Rittenhouse Square won’t accept credit cards for purchases under $5, forcing customers to buy more items they don’t need or simply (as in my case recently) ) Either turn around and walk out the door.
Or at a deli in Margate, N.J., a sign warns that unscrupulous customers who try to use credit cards instead of cash will be subject to additional charges.
And vice versa. An army of franchisees and other businesses insist on operating their businesses “cashless”, drawing the ire of the government.
California and
wisconsin to
Washington DC,
florida yes,
even in philadelphiato end practices that specifically discriminate against people who are not in a position to own credit or debit cards.
None of these practices are very wise. There’s a good reason for that.
The first is a simple calculation. Business owners who avoid credit cards don’t seem to realize this. They say they are doing so because they want to avoid paying fees, but transaction costs range from 2% to 4%, which can significantly eat into already slim profit margins for retailers and restaurateurs. For us, this is a natural position.
I understand that, but as an accountant, I would like to point out that this is an easy problem to solve. With just a little effort (and perhaps the help of an accountant), you can calculate the overall annual cost of these fees and spread this cost across all your products by raising prices slightly across the board. . Would you be upset if my burger cost him $11.60 instead of $11.15? It’s also 4% of yours, and I can’t even tell the difference. But like many other customers, I get frustrated when these costs are separated out and imposed like IRS fines. Or if a handwritten sign with an exclamation mark is posted at the register.Or, in some cases, simply
added indiscriminately on the check without my knowledge. Not smart.
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Oh, and if you think you’re bypassing the taxman because you only handle cash, you might want to think again. Her IRS auditor with half a brain can physically observe your business for several days and estimate the revenue fairly reasonably compared to the reported amount. Even if you are audited, you cannot fool anyone.
It’s also unwise to require customers to use any payment method that’s convenient for your business, regardless of their preferences. This isn’t about his 1984. Today’s customers use a variety of payment methods, from credit cards to mobile apps to Bitcoin. And yes, these forms of payment have fees that can be absorbed (see above). Refusing a customer’s preferred payment method is an insult to the customer. And it’s harmful to your business because customers get frustrated with the whole transaction and walk away or leave without making a purchase.
Small business owners are frustrated by high costs and inflation. They struggle to cover overhead costs. They are struggling to attract new customers as the economy slows. All of these concerns are valid. So how can these same business owners so casually turn down real customers with real money because they don’t like the payment method? It’s baffling to me. This is not a future growth model.
Source: www.theguardian.com
