People Are Losing Their Minds!!!
by Travis Miller
Last night, with my eyes closed, almost asleep, I heard the most absurd story blurted out on the local news. It was as ridiculous as it could get...I thought, at least until they blurted out the next story, which was even more absurd.
Story 1: 4th of July fireworks displays are being canceled all over Central Florida because attendance is expected to be too low. "Thanks to high gas prices, people are choosing to stay home this 4th of July and have their own fireworks displays."
But that's good news for this little ratty fireworks stand. "This is our best year ever...people don't want to spend money on gas to go see fireworks at the river or downtown, so instead they're just buying fireworks to set off themselves.
Reality Check: Get real, people! Let's say that you would have to drive 30 miles to get to the fireworks display. Then 30 miles back. That's 60 miles. You drive a truck, that only gets 15 miles per gallon. That's 4 gallons of gas. $16. And that's the high end. If you drive 10 miles, and own a car, you're looking at under a gallon.
What kind of fireworks display are you going to have at your house for $4 - $16? A box of sparklers and a bottle rocket or 2? Maybe some of those snap pops or a smoke bomb...
I have a hard time believing this story. Hopefully it's just the media being idiotic and making vague assumptions that paint a picture of the "terrible" times we're living in.
But if that story is true, people need to wake the hell up, buy a calculator, and apply some accurate thinking to their lives.
Story 2: "Local businesses are hurting in this economy. Some owners are taking drastic measures to stay competitive."
Pizza parlor decides it's no longer accepting credit cards. Or, more specifically, they begin charging an additional fee to people who use a credit card. Guy comes on and says he's been able to lower his prices to $1.50 per slice for customers who pay cash.
This is his way to stay competitive. Unbelievable.
What was he charging per slice before? $1.75? If your customers are that concerned with a quarter, you're doing business with the wrong people.
He then goes on to explain that the bank takes 7% on credit card transactions. Well, he needs to find a different merchant account. There are plenty at the 2%-3% range. Which, by the way, would be 3 to 4 cents on that $1.50 slice of pizza.
The reporter says, "This new policy has customers thinking twice before swiping their cards, and many more using the atm machine." The atm machine is in this guy's shop (I'm sure he makes a vig on the usage). You would pay $1.50 to $2 fee to the machine, plus $1 or $2 to your bank. People would do this to avoid the $.50 charge for using their card?
This is mind numbing, honestly. The only thing people should be thinking twice about is whether or not to continue doing business with this imbecile.
If you want to find a way to "stay competitive" in this economy, I can assure you, not accepting credit cards, or charging to accept them is the wrong strategy.
Instead, this guy should have found a way to bundle additional value in with his pizza (like a drink, a break stick, toppings). Raise the transaction value by $.50 by adding additional value, which would probably have cost of around $.10. That adds $.40 net to each sale, which would more than cover the bank charges.
Please don't be an idiot like this guy. If the cost of credit card transactions is threatening your business, you may as well close up shop.
