07/08/2023
🚨 Long Post Warning 🚨
People always ask me if we accept credit cards or other digital payment methods (Cashapp, Apple/Google Pay, Zelle, etc) and the answer is yes. Flip the question and ask the question: “What’s your preferred method of payment?” My answer is always cash! The reason is exactly outlined later in this post below. Yes, credit card points are great, but from a business perspective cash is far more impactful.
Your $15 bottle of honey that you paid with a credit card cost me about a dollar in transaction fees. Should I pass that cost onto the buyer by factoring that into my pricing? I could, but I don’t. Why is this? I hate passing on a credit card or other imposed fees onto my customers. As a consumer, I get frustrated when I see businesses at the tail end of the transaction show a “Price for credit cards add X%” or “Convenience Fee of ‘x’ dollars if paid digitally”. We as a society need to change the narrative and as a business owner instead of saying fee or adding the cost into the price; businesses should offer a discount or clearly state their preferable payment method.
For my business personally, our payment processor Square just doubled, yes you read that correctly, doubled our online transaction and website hosting fees last month. Should I increase my pricing to cover that expense? From an economics perspective, Yes; From a business owner perspective, No and I/we won’t.
Please help the rest of your small businesses who’ve already taken on more burden on supplies and inflation by using and paying with cash! This goes for restaurants too!
💲Please understand what NOT
using cash is doing.
Cash is important. 💸
Why should we pay cash everywhere we can instead of a credit card? 💳
I have a $50 bill in my pocket. I head to a restaurant and pay for dinner with it. The restaurant owner then uses the bill to pay for the laundry. The laundry owner then uses the bill to pay the barber. The barber will then use the bill for shopping.
After an unlimited number of payments, it will still remain a $50, which has fulfilled its purpose to everyone who used it for payment and the bank or payment processor hasn’t made any money from the cash payment transaction.
But if I go to a restaurant and pay digitally via a credit card and through a payment processor fees for my payment transaction charged to the seller are 3%, so around $1.50 and so will the fee $1.50 for each further payment transactions.
Therefore, after 30 transactions, the initial $50 will remain only $5 😫 and the remaining $45 became the property of the bank or payment processor 🏦 thanks to all digital transactions and fees.
Small businesses need your help and this is one way to help ourselves too. Pull small draws of cash out at a time and use that instead of tap, credit, etc.
When this is put into perspective, imagine what each retailer is paying on a monthly basis in fees at 3% per transaction through their POS machine.
If they have, for example, $50,000 in sales & 90% are by Card, they are paying $1500 in fees in ONE Month. $18,000 in a year! That comes out of their income every month.
This would go a long way to helping that small business provide for its family!🏦♥️
