Toronto retailers avoid Visa, Mastercard fees by going cash only

[marmar]

from the Toronto Star:


When Sam James introduced the option to pay with credit cards at his new coffee shop, he noticed something immediately.

He was losing money, and fast.

“It could cost me as much as 15 cents to take Visa for one coffee. That’s 20 per cent of my profit margin,” said James, who opened his third location in Toronto’s underground walkway PATH near St. Andrew subway station in June.

James says the high transaction fees were incurred by premium credit cards, such as an Air Miles MasterCard or Aerogold Infinite Visa. “I think it’s totally unfair that the merchant pays for the benefits the card companies offer,” he said, adding he has since switched to accepting only cash at his stores. ................(more)

The complete piece is at: http://www.thestar.com/business/article/1228266--toronto-retailers-avoid-visa-mastercard-fees-by-going-cash-only

[Zalatix]

1. How does this affect ATM Visa/MC cards?

So now we'll all be expected to carry cash instead of Visa/MC-backed ATM cards?

Wallet snatching, armed robberies and muggings will go up, for sure.

[SheilaT]

3. I pay cash for all of my day to day purchases, and

I have never had a wallet or purse snatched, nor been mugged, or anything like that.

And I do think I should get a small discount on stuff, since I'm not costing the merchant money the way the card is.

I would go out of my way to patronize a store like that.

[Zalatix]

6. Yes, but with more people carrying cash around, it will mean more potential prey for thieves.

Just because it doesn't happen to you doesn't mean it doesn't happen, or it won't. More people carrying physical cash means a more tempting target. This is basic jungle rules in action.

[SheilaT]

14. So back when people didn't have credit cards

and only carried cash there was a lot more robbery going on? Really.

[Zalatix]

15. Actually, there was a lot of robberies.

[SheilaT]

16. And of course thieves never want to be bothered taking

your credit cards.

[Zalatix]

17. If you're a thief and you see one person using cash and the other using credit cards

Which will you rob first?

Cash is more liquid and less traceable. We can agree on that, right?

[SheilaT]

18. I'm not a thief so I don't know for sure.

But, thieves can sure charge up a heck of a lot of stuff on a credit card, probably a lot more than the twenty or thirty dollars I typically have with me at any one time.

Oh, and I rather doubt that most thieves actually follow people around to see who is paying with cash and who is paying with a credit card and then selective target the former. No. They target people who look sufficiently vulnerable, if they even think it out that far.

You seem to be thinking that someone carrying cash must be carrying enormous wads of it.

[Zalatix]

20. You can call in and shut down the credit card right away.

Unless I'm mistaken and credit card companies don't have that feature, of course.

Your cash? It's goners.

[SheilaT]

21. And sometimes people are victims of credit card fraud, or they

manage not to notice a credit card is missing until they discover some thief has charged hundreds or thousands of dollars.

Equivalent cash fraud doesn't exist.

The thing is, there are real costs to the merchants for you using a credit card for every single purchase you ever make. And I help pay for your purchases, because they get to keep all of the cash I give them. It's a genuine shame that payers in cash don't get a discount. We should.

When I do use a credit card, I should pay a slightly higher price.

[Prometheus Bound]

9. You might add the sarcasm tag lest people think you're serious.

[Zalatix]

10. Gotcha. Because nobody ever robs someone when they think they're carrying cash on hand.

And nobody ever robs stores where they think there is tons of cash in the register.

[Prometheus Bound]

11. We're talking about a coffee shop.

How much extra cash would you put in your wallet every day if you had to pay cash for coffee? A couple of bucks?

And what ther merchants want is to change the rules, not to do away with credit cards.

Your panic is way over the top.

[Zalatix]

12. More than coffee shops are involved.

Using credit cards is bad in other, terrible ways (like increased debt), but this will also affect gasoline stations. And if you think they won't see increased robberies, well, you just try working at one when this trend kicks in.

[SoCalDem]

2. Yep.. offer an ATM in the store, and make them pay cash

[frazzled]

5. If it's not your bank's machine, you could end up paying $2-$3 to get your money out

Sorry, but unless it's an inexpensive coffee shop or restaurant, this isn't going to work. We have a few places we go that require cash, but this isn't going to work in the 21st century for most people in most contexts.

I can understand that a restaurant doesn't want to pay 15 cents for a charged cup of coffee (who does that, anyway?). So maybe the answer is: minimum purchase of $5 for credit or debit card.

But a consumer doesn't want to have to pay for $4/gallon gas to drive to the nearest ATM that won't charge them a fee; or pay $2-$3 at an in-store ATM. The economics just isn't there. The stores can start doing this, but believe me, they'll lose business.

[SoCalDem]

8. This place seems to be NOT losing money by going to cash

People soon learn to carry enough coffee money.

Our bowling center has an ATM that charges $4 and after a few times, people learned to have a check for bowling, or to have the cash.

[SheilaT]

22. There are people out there, and I've run into them lots of times,

who never carry cash with them, sort of like they're a member of the royal family. They charge, or use a debit card for every single purchase they make. And there are places that require a minimum $5 or so purchase on a card, and even then the merchant may actually be losing money on such a small transaction.

It's not that hard to have cash in hand, at least not if you have a local bank. I go to an ATM of my bank at the beginning of the week and take out the cash I know I'll need for that week. It's not a huge enormous sum, trust me.

The other issue I've noticed is that those who never pay cash also never have any extra money in the bank, because using a card for everything makes the cost for all those lattes and magazines and snacks and whatever, invisible. Because I'm paying cash for all those little things, I notice how much is in my wallet, and it makes me limit those little purchases.

People complain that they can't save money, but they fritter away fifty bucks a week or more on things they could really do without.

[riverbendviewgal]

4. maybe more cash will be crossing the registers now

people will be thinking twice about using credit cards

[Zalatix]

7. And I predict that robberies of both people and stores will go up.

More people will get hurt and killed as a result of this.

Everyone on the DU will scream I am wrong now, but watch the news reports. If more people start carrying cash and more cash crosses the registers, robberies will go up. I warned y'all right here.

I'm patient. If this trend materializes the consequences shouldn't take but about 6 months to become a noticeable issue.

[Matariki]

13. A lot of independent coffee shops simply charge that small fee for purchases under $5

big deal. problem solved.

[Nye Bevan]

19. I like getting miles for using my card,

but I don't want to put someone out of business.

It seems fair if he passes the CC fees on to me in exchange for me getting the miles. In other words, a discount for cash, just like at my gas station.