debit processing for small tickets?

Anybody out there using credit/debit processing for very small, but high volume sales? Most rates hammer you for a $4 sale but the same percentage is tolerable for a $25 sale and is no problem for a larger sale. Though a lot of mobile food vendors are cash only, I am working large festivals/events with many young people, who carry debit cards but not much cash. And not many stagger up to me and order 5 cappuccinos!

Basically, I'm trying to hold down or eliminate swipe fees, and will give up a little more percentage to do it. The math works that way for a small ticket. Anyone know of services for this kind of need?

Thanks, Ed

http://www.hoboespresso.com

Cash only. That is what I suggest. (Yes, I read your comments about same, etc.)

Let them know there's a small surcharge on debit payments... 25 or 50 cents (or whatever it costs) unless they make a purchase of $X amount.

quote:

Originally posted by UncleVic

Let them know there's a small surcharge on debit payments... 25 or 50 cents (or whatever it costs) unless they make a purchase of $X amount.

Unless things have changed since my days as Sorority Treasurer, , this isn't legal. You can't charge MORE for credit/debit payments and you can't set any kind of minimum on the use of credit/debit cards.

You can, however, offer a "Cash Discount".

quote:

Originally posted by -Tricky-

quote:

Originally posted by UncleVic

Let them know there's a small surcharge on debit payments... 25 or 50 cents (or whatever it costs) unless they make a purchase of $X amount.

Unless things have changed since my days as Sorority Treasurer, , this isn't legal. You can't charge MORE for credit/debit payments and you can't set any kind of minimum on the use of credit/debit cards.

You can, however, offer a "Cash Discount".

You may be right, but I personally dont know. I've seen in several stores around here, signs posted minimum 10 or 15 dollar purchase to charge. Mainly in the mom and pop liquor stores... Personally I wouldnt accept credit / debit cards when you primarily sell low cost items. I still like the old saying "In God we Trust, all others pay cash"..

Yeah, I doubt it's "legal" but it's not a particularly policed sort of thing.

I definitely should have made that disclaimer...

It's true that many people do both - surcharge and minimum - but they are against the agreement that the merchant makes with the providers. Not illegal by the law of the land, but you could lose the privilege of accepting the card for payment. Obviously, the card companies don't want users to feel penalized for using the card, nor the merchants that accept them to penalize the consumer. You either decide it's a cost of the way you want to do business, or don't bother. Cash discount is a work-around, and worth considering - Thanks, Unc

In my biz the tickets are higher, so I can't comment on cheap sales, but I can tell you that the rules on debit cards are getting more difficult every day. Debit cards started out looking and acting like credit cards from the merchant point of view. Today the story is different. "Regular" debit cards are ok, but "special" ones (that look the same to you) carry higher fees. In my travel business, a lot of debit cards cost me my commission (typ 10%), because I am not a preferred vendor or have a special agreement with the card company. My customers get upset (with me!!) when I refuse to take them. I suggest that you use a really good processing service that keeps an eye on the rules. McDs for example, so I am told, accepts all cards, but ones with unfair merchant fees are electronicly rejected. I am no expert, but I suggest that you do your research.

tmiles: some people accept only debit cards with the visa or mastercharge logo - as far as you know, does that get around this issue of hidden higher fees?

By the way, it turns out that the cash discount is against the regs too. I strongly sympathize with vendors here who say "heck with it, let them pay cash." Friends of mine over 50 years old (like me) say that too. Friends under 30 say, "no way, dude. I only carry debit." But I do have to face that my product hits a younger market.

IMO, some of the MasterCard debit cards are the worst. The trouble comes with the "gift cards" that come as a reward for another purchase. They come with rules that the customer is supposed to know, but the typical customer always has the "let's try it" attitude. Now I am not saying that a card that the customer is told can only be used for travel via an 800 number may not go through when you are trying to do a hotdog, but I am saying, "why take the chance?". If you are on the road and your POS machine is not talking to the big mainframe in the sky, your customer can be long gone before you know the card is declined. All this shows how little I know, and how little you know, because you asked the question. My suggestion is to talk to your POS people, if they can't set you up with something that you are comfortable with, try the competition........and that brings up another consideration, mobile POS equipment is more expensive than the hard wired stuff. I am now paying 3.5% with no minimums or fees, on my owned POS machinery. There are plans out there for under 2%, but most of them have higher fees. BTW, I provided this info because you asked, but I agree with Adjuticator....cash only

quote:

Originally posted by Truckin

By the way, it turns out that the cash discount is against the regs too.

Wow, then we broke the rules. We didn't do it on purpose, but we did.

quote:

Originally posted by tmiles

I am now paying 3.5% with no minimums or fees, on my owned POS machinery.

If it makes you feel better, I know one fairly large restaurant company (think $100Million/year in sales) that pays just about 3%. So, I think you're probably getting a pretty good deal, comparatively...

quote:

Originally posted by -Tricky-

quote:

Originally posted by Truckin

By the way, it turns out that the cash discount is against the regs too.

Wow, then we broke the rules. We didn't do it on purpose, but we did.

Yeah, lot's of places do it and don't realize that it isn't legal, ANd the card police really are not out and about.

BUT all it takes is for one person to call and complain about the "$whatever$ minimum" that some stores require.

One bar that I frequented had such a sign, but the tip was allowed as part of their $15 minimum for CC sales though.
It sure did help the BT's tips enormously! Even though that wasn't not the original reason.

quote:

Originally posted by tmiles

If you are on the road and your POS machine is not talking to the big mainframe in the sky, your customer can be long gone before you know the card is declined. My suggestion is to talk to your POS people, ..... and that brings up another consideration, mobile POS equipment is more expensive than the hard wired stuff. I am now paying 3.5% with no minimums or fees, on my owned POS machinery.

I got all the way to the third POS before I realized you meant Point Of Sale instead of Piece Of S**t. I guess that means my mind's firmly in the gutter.

quote:

Originally posted by enginecapt

quote:

Originally posted by tmiles

If you are on the road and your POS machine is not talking to the big mainframe in the sky, your customer can be long gone before you know the card is declined. My suggestion is to talk to your POS people, ..... and that brings up another consideration, mobile POS equipment is more expensive than the hard wired stuff. I am now paying 3.5% with no minimums or fees, on my owned POS machinery.

I got all the way to the third POS before I realized you meant Point Of Sale instead of Piece Of S**t. I guess that means my mind's firmly in the gutter.

Dont feel bad... I've heard many a waitress call the terminals one of what you said...

truckin..... i suggest you simply shop around, you will find the company that suites your needs. there are tons of debit companies out ther, with tons of plans. we get calls almost daily. i usually hang up, or tell them we are happy(we have a good deal), but maybe i will listen and ask who has such a plan for you..
another option, just raise your price enough to pay the swipe fee.
if you fee is .50cents, and half use plastic, then bump your price 25-35 cent to cover with cushion.
coffeebluffbbq.com

quote:

Originally posted by bassrocker4u2

truckin..... i suggest you simply shop around, you will find the company that suites your needs. there are tons of debit companies out ther, with tons of plans. we get calls almost daily. i usually hang up, or tell them we are happy(we have a good deal), but maybe i will listen and ask who has such a plan for you..
another option, just raise your price enough to pay the swipe fee.
if you fee is .50cents, and half use plastic, then bump your price 25-35 cent to cover with cushion.
coffeebluffbbq.com

But if you dont feel comfortable with charging your regulars that "upgrade", just post a notice,,"Dut to the fact --blah blah blan_ that the credit card companies/debit cards, charge ME, your purveyor of your coffee, an additional charge to process a card, therefore I must pass it on to you, as much as I hate to, but I have to make money to", or something to that effect.
Tara's mind tonight is not as sharp as she would like it to be, but the Dancing Bull Zinfandel is interracting right now.
But I hope you get the gist of what I am trying to say.
I think for the most part people understand , if you are out right honest and to the point telling them that to accept a card, there is an additonal debt.
But it should be incorparated into the cost, as a "COL" rise.
Everyone expects a rise in anything. It is the american policy to have rent increases and all kinds of bills, and it is only natural to have these types of charges.
For the most part, I think if you post a sign, stating that if you use a debit/credit card you wil pay more, and if you use the almighty dollar, it will stay the same.
Most people will understand and pay the difference, and if you have a sign stating this well in advance of the day you will make this policy effective, then you will start getting more people paying cash.
This is from a person that loves her debit card, as I get the difference in my savings account, but would gladly pay cash for my local guy to help him out, and it seems that you may have customers that would rather give you cash that pay an increase.

Just give them an option, and give them fair warning instead of just springing it on them.
Just an opionion from a consumer,not an owner, but would like to be one.
Tara

Thanks for your thoughts, everyone. enginecapt, that was a riot.

For what it's worth, here is my plan: I was certainly calling losts of companies, and going over their stuff literally for hours over a few days. I posted here and elsewhere. The biggest problem is what tmiles points out about different cards, different rates. It is dizzying. 99% of the processor middlemen create a bundled rate that applies to every transaction, and you can be sure, that even if they are honest, and many are not, they are making sure they maximize their profit across the sum total of the transactions.

The best alternative model I could find for this was called "Interchange plus fee" which is a middleman with a flat contracted fee, who applies it to all variable rates (interchanges), so that you pay only the actual transaction, with no inflated margins. As to whether I should even do this, I am planning to service very large, recreational type events, where everybody walks around with cards, not $800 rolls. There are many other types of food and beverage service venues, like auctions and farm markets, where a lot of cash is available. As to whether one could do it without middlemen, I could not come to a conclusion. In the end, you can only do so many parts of your business, and what you don't do yourself, you pay for. So you pick what you want to do, and pay for the rest.

I just require cash...what do I look like a bank? Enough ATM's around to get the business. But then again I am a PIA

quote:

Originally posted by V960

I just require cash...what do I look like a bank? Enough ATM's around to get the business. But then again I am a PIA

Ronnies, a well know Auburn, Mass landmark for fried clams and ice cream is cash only. They do have an ATM on site for those who didn't remember to bring cash.

Credit card companies can be the biggest rip-offs! The fees that are generated on your bank statements originate with your card processor, they charge the interest rate, per transaction fees, and other things. To keep this short, they basically get paid directly out of your bank account, which is money you earned that you never see.

I recommend Cardservice International! They base their fees on your volume, and they know the restaurant business very, very well. They'll also review your current processor for free and make a competitive bid for your business.

http://www.restaurantedge.com/index.phtml?catid=1836

That link is their online form. Depending on where you are located an agent from their regional office will get in touch with you.

Eric
www.RestaurantEdge.com

I am a debit card fanatic. My take on this issue is, I look on the door of the establishment for the Visa logo. If it isn't there..... I go elsewhere. If I get inside and see a sign stating there is a reasonable minimum purchase required to use my debit card.... No problem, I will usually just purchase a little bit more.

Of course, there are a very few "special" places that only accept cash and I make sure I have money before I go there.

Regarding having an ATM in the establishment so people can get cash, I never, ever do that. It makes me too angry to just give someone 2-3 dollars just to get some cash.

Hope this helps.

As a frequent debit user I had no idea they did this sort of thing. I have always viewed debit as a simple transfer of funds. I thought there might be a very marginal fee for this service, but what has been talked about here is just nuts.

Seems we are in the new age of the Robber Barons. You really have to hand it to them, they have put their 19th century predecessors to shame. They not only freely rob the populace, they bribe their way into government to make their thievery perfectly legal.