Is this really how coffee shop owners feel? When I pay with a credit card are they really thinking this every time?

Arizona Coffee

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  1. DConstruct

    The fastest answer isn’t always the correct one but I would hope the answer is “no”.

    Given there are more secondary merchants coming online for credit processing the fee war should be a non-issue for small business. PayPal, Intuit and Square all have options that small business should review.

    For a $4 bill the .50¢ service charge is about 16% based on your image. I would expect that covers monthly fee, equipment rental, per transaction fee, and maybe a few others. For a Square transaction of the same price that percentage is 2.75%, 11¢.

    Everyone should review their business model as this new industry evolves because it can mean gaining or losing customers over some cents.

  2. austinmiles

    Debit charges have flat fee, while credit is usually a percent, sometimes with a smaller fee. Its generally around 3% or so. I understand that its annoying, but its a cost of doing business. Not just small biz but any business has to fork over for that. Plastic the norm now, and by directly offsetting those fees to the customer when others don’t, it makes people less likely to go in. Or at least to not tip.

  3. The last instructional video I got from my employer said that debit card with PIN was the lowest cost for the vendor, with credit card being the highest. Speaking with restaurant owners, I’ve been told that credit card fees eat up a larger chunk of the transaction than they wished. Isn’t this why Square was made, to offer small business a lower-cost alternative, especially without monthly leasing fees for the card reader?

  4. DConstruct said it right: “Everyone should review their business model as this new industry evolves because it can mean gaining or losing customers over some cents.”

    I can see both sides of the coin (since I’m on both sides frequently). I will walk away if I see a sign like that at the counter. They are most likely violating their agreement with their merchant service provider. Using Square or other companies that charge less than 3% with no addtional flat fee is the answer: Losing a dime for a $4.00 sale should easily be able to be absorbed. Losing customers (and tips for employees) may not be able to be absorbed over a period of time.

  5. I think some credit card companies prohibit business’s from charging extra for processing fees. I know I’ve seen that stated before.

  6. Steve

    It is what it is……deal with the charges and know your business. Simply stated earlier in this thread, if your doing this, then you’ve failed to realize your expenditures up front.

  7. This is actually against credit card companies’ terms of service. It’s even illegal in some states. Merchants aren’t allowed to charge extra for certain payment methods used as part of routine business.

  8. Daniel, that’s true, but I’ve never heard of it being policed – and it would be the credit card companies that would need to police this… I don’t think it’ll ever happen.