7-Eleven Store Owners Have Had Enough…

We are happy to see businesses start taking action against the high fees that they are paying for their credit card processing. Let’s take a look at one of the excerpts from the article posted below:

“We have two stores in California. 50% of our credit card processing fees is about $800 per month. The other store is almost a $1,000 a month. Our [interchange] fees are based on the total transaction, not on a merchandise purchase. If a customer bought a thirty-five cent pack of gum and received $30 cash back so that $30.35 was run on the card, I would pay the percentage of fees based on the money I gave back as well, not just on the merchandise that was sold. My store allows customers $40 or $50 cash back, and it has typically 50 of those in a day. I have to pay interchange fees on all of that.”

There are a couple points that all merchants should know in regard to this quote:

1.) If you allow cash back on your transactions, you are essentially paying their ATM fee for them through your interchange fees. Remember, your interchange fees will range from 1.4% to over 3.00%.

2.) All customers and their cards are equal – Remember, according to Visa rules and regulations, you cannot add your own convenience fee to a transaction just because they are using a credit card. You have to charge everyone the same. In this case, you are unable to charge a convenience fee just for a credit card purchase on cash back…you would have to charge everyone (even cash customers) the same convenience fee on all transactions. This is a very frustrating aspect as you are pretty much trapped into eating these exorbitant costs.

Referenced Article:

http://www.businessweek.com/smallbiz/running_small_business/archives/2009/10/7-eleven_store.html

Thanks,

Steve Williams – The Processing Brokerage
www.processingbrokerage.com

Tags: Credit Card Processing, Interchange Fees, Processing Brokerage, Small Business

This entry was posted on Wednesday, October 7th, 2009 at 3:19 pm and is filed under Industry News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.