I am having the following dilemna: My business is about transparency, and I am struggling with the whole issue around accepting credit cards.
Simply put, credit cards are an expensiverip off. Both the consumer and merchant pay to use them. Small merchants pay close to 5% when all is said and done (1.9% to Visa, plus merchant fees, plus their internet connection fees, plus equipment fees, plus bank fees, plus the cost of their time to reconcile everything monthly).
The average consumer has no clue how much businesses are charged, because most merchant agreements have up until recently forbid the merchant from charging service fees at the time of the sale. As a result, most businesses have simply increased their prices across the board, building the fees into the overall cost of their product.
But what about the cash buyer?? 50% of my customers pay in cash. Why should THEY subsidize the person who buys $200 worth of bars on his Master Card?Mr. $200 purchaserdoesn't want to pay ATM fees, but they don't realize that the ATM fee is just $2.50, whereas the cost of that order to them for using their credit card is $10. The merchant certainly isn't going to suck it up.
What's worse is that as a consumer I don't see many merchants giving incentive to pay cash. Instead they are grabbing the extra $$ from the cash customer and hanging on to it. The cash customer is subsidizing the credit card buyer, and to me that's not fair.
The question I have is, AS A CONSUMER, (not a business owner) which option would you feel better with?
A) The price be increased overall by 5%, and cash purchasers offered a 5% discount.
B) The price be what it is and know what you are being charged for the "convenience" of using your card.
Personally, to me A is deceptive, but that's just how I am.
There is no right or wrong answer here. I am just soliciting feedback.
updated by @brad-churchill: 04/10/15 06:33:28PM