Posted on 04/03/2024 6:37:40 AM PDT by 1Old Pro
Sebastian Maniscalco said he received a $3 COVID fee charge at a restaurant.
"It’s a real bad look as a business. Absorb the fee. It’s called the cost of doing business," Maniscalco continued, adding that it "ain’t right" in a seeming reference to the name of his upcoming stand-up tour.
(Excerpt) Read more at foxbusiness.com ...
And on a slightly related note...
One thing that gripes me is that FReepers often complain that DeSantis or Newsom should “do something” about the outrageous homeowner insurance premiums in their states.
Congrats on standing strong!
The only way to “absorb the cost” is to pass on the cost. Now you’ve got a couple of options there:
They can just increase their prices, thus charging everybody more
They can decrease quality (ie cheaper supplies), thus giving less for the same money
Or they can figure out which customers cost them more, and just charge them what they’re costing you
The fact of the matter is taking credit cards is expensive. You have to pay to be on the network, and they charge you for every transaction. Margins are thin in the restaurant business, there’s a reason 80% of them go out of business in the first year. The only thing these fees are is showing you the math. They could take option 1, increase prices across the board, and then you’re STILL paying the fee, just not seeing it.
Of course, it’s an Italian restaurant and it’s almost common knowledge that the place has been an organized crime front for more than 50 years.
I’ve run into several fast food workers who have no idea how to make change for cash transactions.
Yep, I might also write that down on the check so the waiter can relay my dissatisfaction to the owner/manager as well as gripe about getting less in tips.
Bottom line, allowing customers to use a credit card is good for business for many reasons, so why would you “punish” them with an extra fee and discourage their use? Makes no sense.
Because it isn’t as good for business as you think. First the business has to pay them, usually a good chunk of change, to be on the network, then they have to pay a percentage (usually around 3%) of each charge on that card to the card company. Most restaurants run at around 1.5% margin (the profitable ones at least). So you can see how 3% to the card company eat that.
Now of course you also have to add in inflation. Prices are going up all over, and customers are rebelling. Prior to this they just handled the card fee by upping prices across the board, so functionally non-card paying customers were paying “extra” but none of them noticed or cared. But when people are feeling the inflation pinch and changing their buying habits raising the prices gets tricky.
NOBODY is being punished for this. The businesses have just found themselves in a box. The market won’t flex around them charging more to everybody, and because of that their margins have shrunk even more. That 3% fee they have to pay the card companies is no longer being able to be absorbed. So they’ve got 2 choices:
stop taking cards
pass the cost to the customers using cards
It actually all makes perfectly good sense when you understand how the business of card transactions work.
If I had to pay cash for meals, I would eat out less due to the inconvenience of having to keep enough cash on hand.
I also would tip less. If I wanted to leave a 10 dollar tip, yet I only had twenties and a 5 dollar bill in my wallet - guess what I would leave?
Restaurants should thank God for customers using credit cards.
If they lose half their customers, the 3.5% fee won't matter, they will go out of business.
Of course they should...in today's world.
And if they lose money on most of their customers they go out of business.
In the end take up with the card companies. Why the hell are they charging 3% of EVERY SINGLE TRANSACTION over and above their network fees to move around a bunch of 1s and 0s which happens for them functionally free. It’s not like the old days of credit slips. Also note if you pay by DEBIT card instead of credit card, no fee. And these debit cards run under the exact system, they’re just moving their 1s and 0s around different buckets. So how can they run my Visa debit card for free but my other Visa backed credit card charges the store 3%, plus of course charges me interest.
The system as it currently operates is a scam run by the card companies. Has been for decades. We the end customer are only just now finding out about it because the stores are finally putting the scam on the receipt.
So if you really really think this is a bad thing call your card company, tell them their business practices are abusive and they should stop #$%&ing the stores.
being mob owned is the best insurance program and cash handling is not a problem. LOL
I wouldn’t know how to scan a qr code if my life depended on it.
And when we eat at Chili’s I refuse to use that infernal gizmo on the table to pay. Cash only. What are they going to do — ask you to barf up your lunch?
That makes two of us.
So on its face I agree with you, but in operation, I agree with the courts. I think the price list for products or services ought to say, "The price is X, if you pay by cash, the price is x-1%, if you pay by debit card the price is x-3%."
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