[Question] Credit card minimum charges

[IanF]

Hi Guys
I just need some perspective on this.
We have a speedpoint in our shop and for a number of years had a policy of a minimum sale of R50 on the speedpoint. I was told when we got the machine we can do this if we have a minimum sale policy which we waive when customers pay cash. Now with the banks pushing credit/debit card swipes more and more we get people getting R11 worth of copies and handing over a debit card, then saying they don't have cash. So we swipe it for the R11.00.
Then the terminal dials in which takes time and money to happen plus you have to keep the slips filed in case there is a query.
What is the best way to handle this without upsetting the reasonable customer?
I feel printing up a big sign saying "minimum sale Is R60 unless cash is paid" and stick this where anyone can see it.
In the states the printshops there have a $10-$50 minimum sale and just give away the small number of copies. They say the next time the customer comes in they spend the minimum.
What do you recommend?

[Blurock]

Put up the sign Ian. Swiping a card for less than R50 is rather idiotic as the charges are very high as a % of your purchase.

[Mike C]

Hi Ian, I remember many years ago being told by a shopkeeper that if I wanted to use my credit card that he would have to charge me a surcharge to cover expenses.
I remember being pretty upset at the time thinking that if he wanted to offer Credit Card facilities then he should be taking the knock.
The reality now days is that more and more people use plastic money for convenience and safety.

A sign is probably the best way to go ...

[murdock]

i had an instance the other day where i offered to pay cash R580.00...but requested that i get a cash discount...the shop fella told me to fly a kite so i paid with my credit card...surely if you own a shop and have customers who want to pay cash you would offer them some sort of incentive...like edgars do with their 10 % cash savings card...just an idea.

i have noticed most people in the supermarkets pay by card...even if it is a small amount like R11...but i suppose fro them it gets expensive handling cash.

[adrianh]

What benefit does the retailer get from receiving cash and then giving a discount to the value of the credit /debit card admin fee?

Ian, I would say that you should simply up your lower end prices and forget about it. All that the sign is going to do is to give people a reason to start an agrument. We are so used to going about our business without using cash that we just don't think about spending R30 using a debit card. If I had to go into a shop wanting to spend R30 and the shop had a sign saying that I needed to spend R 60 if I wanted to use my card I would simply walk out and go elsewhere. It is my choice to use my card to spend R10.

Up your prices, bite the bullet and avoid the argument.

[Pap_sak]

I get charged a percentage so it doesn't really matter if it's R1 or R1000 for me. If it happens often you could get a gprs unit and not have to worry about the telephone calls. Gprs units are also quicker, but you do pay extra - but get some back with the telephone call savings.

[murdock]

What benefit does the retailer get from receiving cash and then giving a discount to the value of the credit /debit card admin fee?

you right it doesnt benefit the retailer nor the purchaser...because if i draw cash it cost more than it cost for me to use my credit card...and by giving the discount you might as well save the money the cost of having to deposit the money...and thats the reality of it...hence the bank charges...they know how to print money.

the only savings is people who are smart enough not to use cards...because then not only are the banks getting rich...but the goverment is also cashing in on all the transactions...taxis...corner cafe...for example...no invoice...no tax.

[IanF]

Thanks everyone for the feedback. This is the new new trend so we must embrace I suppose.
I do pay a small fee for the machine and 5% plus VAT to the bank. To me the biggest annoyance is debit cards as the machine dials up even for the small amount, while on a credit card it only dials if over R100. I had 3 transactions yesterday of which one was over R50. Now to work higher on the copy prices for small volumes.

[adrianh]

Maybe the trick is to make the low volume prices very high and then to taper the prices off decreasing exponentially so that the unit price stabilizes at about R 60.

[tec0]

I think it can be said that that having cash on your person is a risk. Criminals are forever looking for a person to target and having money on you just help their cause.

That said, yesterday my car’s left hand static reflector broke due to a stray pebble.

As my luck would have it the traffic cops was on the same parking lot that I was. I was told by the traffic cop at the parking lot to have it fixed or face a fine. “The scary thing is how many trucks are on the road with broken or no reflectors and no functional rear lights...”

I walked into a shop and paid for the reflector in small change. They “the staff in the shop” actually laughed at me for paying with two R5 coins! The small reflector cost R9. And they frowned when I demanded my R1 change!

So this is the world we live in today, shops think that small change isn’t money and doesn’t even want to accept it but legally they have too. Needless to say if I used my card it would have cost more than the darn reflector but paying cash is socially unacceptable.

So I think that "some shops" are partly responsible for forcing people to pay via card.

[Pap_sak]

Thanks everyone for the feedback. This is the new new trend so we must embrace I suppose.
I do pay a small fee for the machine and 5% plus VAT to the bank. To me the biggest annoyance is debit cards as the machine dials up even for the small amount, while on a credit card it only dials if over R100. I had 3 transactions yesterday of which one was over R50. Now to work higher on the copy prices for small volumes.

Ian switch to Capitec for the machine - you do not need to bank with capitec to use there machine - it takes around 2 days for the money to be put into your account.

Costs:

rental fee including gprs and vat: R427.50 pm (no telephone calls and quicker)
visa 3.25%
Debt: 1.75%

No other fees.

Their merchant number: 0860 66 77 06

I have 3 of their machines and have saved a fortune compare with my 5% FNB machine - the only downside to capitec's is that they do not take the RCS card