We’re continuing on the really hot topic of extra fees, which have been the a subject of a few of my columns lately and generated a lot of strong opinions from consumers and business owners.
Today, I want to share two different takes on credit card surcharges. Both people have or had been long-time small-business owners.
Let’s start with Nancy Fay.
When I recently stopped by one of my favorite local bakeries, The Bake Shop at Ghent, owner Nancy Fay said she was hoping I’d be by so she could give another perspective on the credit card surcharges I’d been writing about lately (I have a weakness for the bakery’s fresh cherry danish).
Faye, who started the bakery 38 years ago, said she just recently had to give in and charge a 4% surcharge for credit card purchases.
She said the amounts businesses pay varies according to their sales, but she was losing $10,000 a year in credit card surcharges, in addition to a $39.99-per-month charge from her credit card processor.
When I asked Nancy why she didn’t raise prices, like some consumers have said they prefer, she said for her business model, she didn’t think that was fair. But it was probably different decision for each business owner, she said.
Her business is 50% cash and 50% credit card customers.
I usually pay cash for my $1.50 danish (and sometimes I get a coffee), but there have been times I charge a bigger transaction, like birthday cakes or Thanksgiving pies.
“Why would I want to charge you more because you’re paying cash?” asked Fay. “You pay $1.50. Someone else pays $1.56.”
Fay said if she had a business that was a majority credit card payments, she’d raise her prices instead.
“I just think it’s way more fair to the consumer” to charge those who are using credit cards for her business, she said. She’s only had one person complain since she started the policy and once she explained it was 4 cents on a $1 purchase, they kind of understood.
“We struggled with it a long time,” she said about charging the surcharge.
A different view from a small-business owner and consumer
Up until recently when he sold his business, Tim Freeman owned Altima Tan in Springfield Township for 16 years.
Freeman reached out to me last year not only as a small-business owner, but as a ticked-off consumer who was upset other businesses were passing along what he believed should be the cost of doing business.
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Freeman said credit card surcharges have been paid by businesses for years and it’s unfair to pass those fees on to consumers. When his electricity rates went up, he didn’t pass on the surcharge, he said.
As a consumer, he’d rather the business raise the price of goods and let consumers decide if they want to pay for the goods instead of what he calls sneaking in surcharges for the use of credit cards.
Last year, he was upset about a few favorite restaurants charging an extra 2.5% to pay with a credit card.
Now Freeman is even more upset that some businesses are passing along surcharge fees of 3% to 4%.
Freeman said he refused to pass on the surcharges to his customers – most of whom pay an automatic monthly membership by credit card and couldn’t “choose” to pay cash instead if he had passed along surcharges.
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As a consumer, Freeman has avoided going to or returning to most places where he has run into the credit card surcharges or brings cash.
Freeman doesn’t like having to carry around cash for dinner out. He’s done it, but only when he’s planned ahead.
“I don’t like it. I’m 72 years old. Who wants to carry around cash?”
And he’s been to places, not had the cash and refused to order using a credit card with surcharges.
“We walk out and I tell them why we’re walking out,” he said.
Beacon Journal consumer columnist Betty Lin-Fisher can be reached at 330-996-3724 or email@example.com Follow her @blinfisherABJ on X, formerly known as Twitter, or www.facebook.com/BettyLinFisherABJ and see all her stories at www.tinyurl.com/bettylinfisher
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