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  • mfindeisen6

Your Customer is Getting an Extra Christmas Gift and Your Business is Paying For It.

Updated: Jan 31, 2022

You have a small business that's doing well, struggling or just okay. Regardless of how your business health is today, I wish you well along with all the success you deserve. If you are a merchant that sells things or services, you may not be aware, but you can give yourself a pay raise.

If you have the time to watch television, you have seen commercials for cash back credit cards or rewards cards. Celebrities sell the cards that give incentives to sign up for the cards then get cash back when making purchases. Returns offered of one to three percent or more from purchases. Which means there are now more consumers with more buying power. That’s a good thing for the economy and should be good for your business. So, what’s the problem? Is there is a question to ask about rewards cards and the cash paid to their cardholders, your customers?

At first glance it may look as if the card issuing banks are making an investment by putting up their money to generate more credit card customers. If all rewards cardholders get cash back of one to three percent of all purchases can you imagine how much cash that would be? Millions? No, more like billions. But no, banks are not putting up their money to entice customers to use their rewards cards. No, banks are not but you are!

The cash cardholders are rewarded with is paid for by you. Your business and all the other businesses that accept credit cards pay the billions of dollars paid to cardholders by increased merchant fees. You and every other business pay higher credit card processing fees when taking payments with rewards cards.

Look at it like this. Your customers are getting an extra Christmas present every year and you are paying for it. Now you may decide to accept this loss as a part of doing business. But it’s not, it’s the banks shifting the expense of generating more profit for the banks to small businesses.

You could raise prices across the board to cover the loss by processing fees you pay. Maybe you have. But raising all prices penalizes your cash customers by having them pay for your credit card customer's cash back and vacations.

The solution? Is there a way to give yourself a pay raise and stop paying for that extra gift? Yes, there is, and thousands of merchants are making the decision to do so, not only stop paying more to take rewards cards, but to stop paying for taking all credit cards. No, they are not going cash only, that would be the end of business. How are they doing it? With a program that allows them to make the same profit on non-cash sales as cash sales. A built in program that raises the amount paid for credit card sales slightly higher than cash sales. A program that gives customers a choice. Pay cash to save or pay a slightly higher credit price.

The difference in the credit price goes to the processor who, in turn, pays all the merchant fees that you have been paying. The processing fees, the monthly fees, PCI fees, all the fees. Do yourself a favor. Pull out your merchant statements for the past year. Add all the fees from the past twelve months. Total them. Circle the total. Then think about that total, the total amount of all the fees you paid to a bank so that that bank could give away your money in order that there would be more credit cards in circulation to make the bank more profit. What could you do with that money? For your family, for your business?

But. BUT!

What are my customers going to think??!! In the words of one business. I gladly pay them as a means to grow my business! Saving my credit card fees by passing them onto the consumer would kill my business. Kill my business? How could giving away profit help grow a business? This program frees up cash to promote your business if you wanted to. Many customers have become accustomed to higher credit card prices. They are now asking what the credit price will be when paying by credit card. True, a few customers may become disgruntled, but if you do happen to lose a few sales, wouldn’t you still save money if you were able to keep all you have been paying to take credit card payments? After all, do your customers come to your business because they want what you sell, the location, like your business, like your employees and you or only to save a few dollars?

Is it time to take a look at the program that thousands of other businesses have switched to? Don’t you pay enough already, for everything?

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