Minimum for credit card purchase

itsbob

I bowl overhand
What about debit cards? I'm thinking those under $10 should be using their debit cards.

Most people won't do debit purchases, because than the cost is borne by the customer not the business. Ever wonder why all the BIG companies force their machines to ask you for a PIN?? Why doesn't it go directly to a credit purchase since the majority of customers are going to opt for credit anyways?? Chepaer for Wal-Mart, more expensive for the customer.

It used to be that Wal-Mart (for example) wouldn't get hit with the credit transaction fees, BUT the customer could and would get hit with an ATM fee..

Now that the shoe is on the other foot.. how would the customer buying a $1.89 soda like to pay a $1.50 or $2.50 foreign ATM fee every time they bought a soda??
 

vraiblonde

Board Mommy
PREMO Member
Patron
Haven't you guys ever seen a gas station give a discount when you pay cash? Now you know why they do that.

I use my credit card for everything, then just pay it off when I get my statement. But I also carry cash for small purchases and would never expect a business owner to eat the fees just because I didn't have $2 for my fountain soda.
 
R

remaxrealtor

Guest
Yes they come from the same source. But if you process it as a debit and use your pin number then the charges are less. If you use it as a credit card and sign the charges are more.

Exactly, but who cares what it costs the business owner, right?
 

Cowgirl

Well-Known Member
So it's been established that a $1.89 fountain soda purchased with a credit card costs the merchant $.04? How much of a markup does the merchant put on the soda? I'm not worried about $.04.
 

itsbob

I bowl overhand
You are RIGHT on Bob....but some people would like everything to be exactly to their liking with little consideration of any effects that may have. I cut and pasted a days sales:

01/21/09 $1,864.69 $0.00 $0.00 $0.00 $0.00 $372.93 $0.00 $39.25 $1,452.51 The $1864 was the total sales and the ACTUAL drop after fees is the end number...$1452....That's significant when you are trying to keep people employed.

WOW, almost 23% of sales??
 
D and I do use your Visa debits. Aren't they processed the same way?

Having to use your debit card vs. the check.

It is much easier to use debit cards vs. checks because the funds are directly debited and are itemized at time of purchase. Also, most cards can double as Visa or MasterCard along with the ability of using debit. The Merchants will love you for using your debit card rather then your credit card, it saves them money in the long run.
Its very simple to carry around a debit card instead of paper checks and you don't have to show your drivers license all you have to have is your pin number memorized. As long as you have the money in your bank account the debit card can be used. Make sure to check with your card issuer of any fees involved with using your debit card. The debit card is widely used and you never have to write a check.

Debit vs. Paper Money.

The good thing about debit cards vs. paper money, is if you lose your card you can have it cancelled and re-issued a new one. With paper money if its lost, it is long gone. Using your debit automizes your checking account and statement show exactly where you purchased from.
 
So it's been established that a $1.89 fountain soda purchased with a credit card costs the merchant $.04? How much of a markup does the merchant put on the soda? I'm not worried about $.04.

No, it has not been established that .04 is all it cost the merchant. This is just what Chasey assumes it cost the merchant.
 

Cowgirl

Well-Known Member
Having to use your debit card vs. the check.

It is much easier to use debit cards vs. checks because the funds are directly debited and are itemized at time of purchase. Also, most cards can double as Visa or MasterCard along with the ability of using debit. The Merchants will love you for using your debit card rather then your credit card, it saves them money in the long run.
Its very simple to carry around a debit card instead of paper checks and you don't have to show your drivers license all you have to have is your pin number memorized. As long as you have the money in your bank account the debit card can be used. Make sure to check with your card issuer of any fees involved with using your debit card. The debit card is widely used and you never have to write a check.

Debit vs. Paper Money.

The good thing about debit cards vs. paper money, is if you lose your card you can have it cancelled and re-issued a new one. With paper money if its lost, it is long gone. Using your debit automizes your checking account and statement show exactly where you purchased from.

Wonderful. :smile: Now people can stop worrying about the stupid $2 fountain soda, because we don't even have any credit cards. Only debit. :yay:
 

itsbob

I bowl overhand
So it's been established that a $1.89 fountain soda purchased with a credit card costs the merchant $.04? How much of a markup does the merchant put on the soda? I'm not worried about $.04.

Looking at the costs reMax posted, it wouldn't be $.04 it would be more in the neighborhood of $.40, but if that's no big deal to you go the ATM in the store, pay the $2.50 surcharge to get cash ($10 withdrawal that's almost the same % the business owner would be absorbing) and pay cash for your $1.89 soda and everyone would be happy.
 
R

remaxrealtor

Guest
Looking at the costs reMax posted, it wouldn't be $.04 it would be more in the neighborhood of $.40, but if that's no big deal to you go the ATM in the store, pay the $2.50 surcharge to get cash ($10 withdrawal that's almost the same % the business owner would be absorbing) and pay cash for your $1.89 soda and everyone would be happy.

Wikipedia:

[edit] Detriments to merchants
Merchants are charged many fees for the privilege of accepting credit cards. The merchant may be charged a discount rate of 1%-3%+ of each transaction obtained through a credit card. Usually, the merchant will also pay a flat per-item charge of $0.05 - $0.50 for each transaction. Thus in some instances of very low value transactions, use of credit cards may actually cause the merchant to lose money on the transaction
 

Chasey_Lane

Salt Life
No, it has not been established that .04 is all it cost the merchant. This is just what Chasey assumes it cost the merchant.
No, I didn't assume, although one of my links did say it cost the merchant 2% in fees. I told Bob my cost was probably low.

Soooo, I'd like someone to provide a link for other fees.
 

tyky

eieio
Wikipedia:

[edit] Detriments to merchants
Merchants are charged many fees for the privilege of accepting credit cards. The merchant may be charged a discount rate of 1%-3%+ of each transaction obtained through a credit card. Usually, the merchant will also pay a flat per-item charge of $0.05 - $0.50 for each transaction. Thus in some instances of very low value transactions, use of credit cards may actually cause the merchant to lose money on the transaction

It cost my company .25999 for each transaction plus the % and monthly fee for having it.
 

Chasey_Lane

Salt Life
Wikipedia:

[edit] Detriments to merchants
Merchants are charged many fees for the privilege of accepting credit cards. The merchant may be charged a discount rate of 1%-3%+ of each transaction obtained through a credit card. Usually, the merchant will also pay a flat per-item charge of $0.05 - $0.50 for each transaction. Thus in some instances of very low value transactions, use of credit cards may actually cause the merchant to lose money on the transaction

Also from Wiki: For one example of how interchange functions, imagine a consumer making a $100 purchase with a credit card. For that $100 item, the retailer would get approximately $98. The remaining $2, known as the merchant discount [8] and fees, gets divided up. About $1.75 would go to the card issuing bank (defined as interchange), $0.18 would go to Visa or MasterCard association (defined as assessments), and the remaining $0.07 would go to the retailer's merchant account provider. If a credit card displays a Visa logo, Visa will get the $0.18, likewise with MasterCard. Visa's assessment is fixed at 0.0925% of the transaction value and MasterCard's assessment is fixed at 0.0950% of the transaction value. On average the interchange rates in the US are 179 bps (1.79%) and vary widely across countries; in April 2007 Visa announced it would raise its rate .6% to 1.77%.[9]

According to Diamond (DTPI), a management and technology consulting firm, only 13% of interchange costs go to processing, which is the fee’s original purpose, while about 44% goes to paying for reward programs and 35% covers cost of funds and profit margins. According to Diamond, interchange costs are “paid for by merchants without directly benefiting them or their customer relationships. In fact, these rewards programs drive consumers to payment choices that are the most expensive for merchants."[10]

According to a January 2007 poll by Harris Interactive, 32% of the public had heard of the interchange fee; once explained to them, 91% said Congress "should compel credit card companies to better inform consumers" about the fee.[11]
 

itsbob

I bowl overhand
The catch is that the fee is assessed only if you treat the purchase as a debit and use your PIN to authorize the transaction. Press the "credit" key, sign your name on the receipt and no fee is charged.

Using a PIN could cost you
In a survey by the New York Public Interest Research Group, 89% of the banks surveyed tack on a point-of-sale fee of anywhere from 10 cents to $1.50 for PIN-based debit transactions. While the survey looked only at New York-area banks, people all around the country are finding these debit-card fees on their bank statements.

Just as with credit cards, retailers usually pay a fee for the processing of a debit card transaction. NYPIRG says a flat fee of 7.5 cents to 10 cents is paid when the PIN is used and the transaction is processed "online." If the customer signs for the purchase, it's processed "offline" and the fee can be up to 2% of the transaction.

Just FYI...

Using a debit card transfers the cost from busniess to customer..
 

itsbob

I bowl overhand
No, I didn't assume, although one of my links did say it cost the merchant 2% in fees. I told Bob my cost was probably low.

Soooo, I'd like someone to provide a link for other fees.

WHY do you need a link when you have small business owner ONLINE in the forum telling you EXACTLY how much they pay??

Is wiki a better resource than the actual business owner??
 
Just FYI...

Using a debit card transfers the cost from busniess to customer..

Maybe. I use my debit card for just about everything, and there are never any fees on my statement for any transaction, excluding 3rd party ATM machines.
 
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