I disagree, partially, with your fee issue argument. The fees, with electronic processing, for Visa, MC and Discover are generally, depending on the deal, are around 2% or less. (Electronic processing with direct deposit is the rule). I ran a restaurant for a number of years and can count on one hand the number of disputed transactions. The fee is more than made up by (1) people's willingness to frequent the establishment b/c they honor credit cards; (2) the increase in the amount spent per person because they are not worried about running out of cash -- ordering an extra glass of wine of dessert, for example. I have always assumed that the reluctance to do is more based upon an unwillingness to leave an income trail for tax purposes.
As to the ease of entering into merchant agreement to accept the cards, it is my understanding that it can be difficult for new businesses with no track record to obtain somebody who will handle the transactions (because of fears of fraud). Jonathan A. Cass Silverman, Bernheim & Vogel Two Penn Center Plaza, Suite 910 Philadelphia, PA 19102 Tel: 215-636-4435 Fax: 215-636-3999 E-Mail: [EMAIL PROTECTED] This electronic message contains information from the law firm of Silverman Bernheim & Vogel which may be confidential or privileged. This information is intended for the use of the individual or entity named above. If you are not the intended recipient, be aware that any disclosure, copying, distribution or use of the contents of this information is prohibited. If you have received this electronic transmission in error, please notify use immediately by telephone, 215-569-0000, or by e-mail reply. -----Original Message----- From: William H. Magill [mailto:[EMAIL PROTECTED] Sent: Thursday, October 23, 2003 12:52 AM To: Jonathan Cass Cc: [EMAIL PROTECTED] Subject: Re: [UC] pad-thai? On Wednesday, October 22, 2003, at 03:45 PM, Jonathan Cass wrote: > I second (or third) the Vientiennete recommendation. My only gripe > with > them is they don't take credit cards I am not a cash carrying kind of > guy. I > understand the reasons why restaurants don't take credit cards (newly > established and unable to get a company to handle transactions; > prefer, for > obvious reasons, to be an all cash business), but I think it is a big > mistake. One of the primary reasons that small businesses don't take credit cards is the chunk of the take that the credit card takes. (sorry about that...) Amex is the worse, but Visa and Master Card, though lower have had a couple of suits over their rates. As I recall, CC companies get something like 3% of the amount of the credit slip... this is really a serious impact on Philadelphia businesses because of the GBT - Gross Business Tax. It's based on the total income of the business with no deductions for anything! Truly "GROSS." Getting a company to handle the transactions is pretty trivial -- assuming that the business has a commercial checking account (which is not always true). Virtually all banks will process the Credit Card slips for them... again for a percentage of the take. Another particularly onerous problem for small businesses is that if they get a "disputed charge" they loose the income immediately -- or rather they never get it. Basically disputes are deducted from their "income" before they get it. It's a real cash flow issue. Only if the establishment goes "on-line" (which is also necessary for debit cards) does that particular problem go away. But going "on-line" add significant monthly charges on top of the percentage of the tab taken by the CC company. There are lots of "deals" an establishment can get, but when push comes to shove, Credit Cards cost the establishment money. The CC's selling point is exactly you... convenience breeds more repeat customers more often. But the establishment has to have the volume to get the lower rates and make the whole thing worthwhile. And the volume we are talking about here is in dollars, not number of transactions. T.T.F.N. William H. Magill [EMAIL PROTECTED] [EMAIL PROTECTED] [EMAIL PROTECTED] ---- You are receiving this because you are subscribed to the list named "UnivCity." To unsubscribe or for archive information, see <http://www.purple.com/list.html>.
