Support Small Businesses... By Not Using Your Credit Card There
Keep the Money in the Shopkeeper's Pocket
It can be 1-3% for big businesses and 3-6% for smaller merchants--and when you're a struggling mom-and-pop business, 6% of every sale can be a lot. Ever wonder why some businesses enforce a minimum amount for credit card payment? It's to duck losing money on those small sales. A big corporation might not miss the money, but your local coffee shop or family-run gas station will.
In order to keep profits stable, businesses often build in a 'hidden tax' to compensate for lost money in credit card sales. If fewer people were to use their credit cards at small businesses, they would be able to lower their prices and thus better compete with the massive stores. A community store can't afford the same discounts of a Wal-Mart, but by keeping their credit card expenses low, you can help them get there.
Of course, small businesses could just charge the credit card-paying customers more, or not accept plastic at all, but this discourages business--something the small-town shopkeeper can hardly afford to do. Most retailers have simply opted to eat the cost. Easy for Wal-Mart; hard for Walter's Fish & Bait Shop.
What's the responsible consumer to do? Just pay with cash or a check. It won't cost you anything more (except your, what, 1% cash back reward if you're in one of those nifty programs), and what you'll gain is the satisfaction of supporting your community-focused business. We complain about chain stores and 'big box stores' and call for regulation and boycotts, but we can also help our local businesses not just by shopping there but by changing how we pay when we shop there.
Besides, paying by credit card holds the line up, and no one wants to be that guy.
So save your credit card purchases for online shopping or major payments or big chain stores. Pay your local drugstore bill for $11.49 and support the small enterprise. It's the American thing to do.
Published by A. Bertocci
Adam is a writer, filmmaker and humorist who writes about media, movies, pop culture and the greatest city ever founded. View profile
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3 Comments
Post a CommentGreat topic! Over Christmas, I went to visit my mom and noticed something. Wawa, a chain of convenient stores, gives a discount if you buy gas with cash. They have updated their signs to add a cash price. The difference was .$04. Funny thing was, we only had our debit cards because we are so accustom to paying. But-- Wawa also has a free ATMs! Wawa is by no means a mom and pop shop, but still a regional chain and obviously they are hurting as well. Another thing I thought of was that when we pay at the pump, we usually pump and go. Paying with cash gets you into the store and perhaps buying a drink, magazine, snack or something you weren't planning on getting. Hey- maybe this can be an article of it's own... Thanks! I will keep this in mind as I shop locally. I try to avoid box stores when I can anyway!
I have experience as a business manager and also used to be self-employed. Whomever is doing your taxes is not doing you a service! As a business owner fees charged from credit companies are deductible at the end of the year as an operating expense. And even the small business owner can get lower rates for taking credit or debit cards. You must haggle with the credit companies who want your business! You must tell them what YOU as the business owner will accept from them. It is not the size of your business but how many credit/debit transactions your business takes in during the month. If they will not give you a rate of 2% then keep searching. There are plenty that will! Beware of other "fees" though. Credit companies will try to stick you with those also for the lower processing percentage rate. It is cheaper to buy your terminal than to lease or rent in the long run. Be Firm before you sign.
Interesting article. I knew about the fee to business owners as I have two entrepreneurs in my family, but I honestly never really thought about the difference between paying with credit for a small purchase and paying in cash and how that effects a particular small business. You've definately made me think! Thanks.