Credit card sales

[Mike Blakesley]

When we first started taking cards, our film booker told me to expect about 40% of our sales to be on cards. I thought he was nuts.

We were at 40% almost instantly, and this week for the first time (running Super Mario Galaxy), our credit cards hit an even 80% of our sales.

I know, I know, the fees. But, we get most of them back through a surcharge on our app, and people love the convenience, so it's all good. A lot of our customers come in from other small towns in the county and they love knowing their seat will be guaranteed to be ready for them.

[Frank Cox]

What do you do when someone wants to buy a 50 cent lollipop and whips out his card?

[James Biggins]

What do you do when someone wants to buy a 50 cent lollipop and whips out his card?

You set a minimum credit card spend. It's ok in the U.K. Is it a problem in Canada?

[Marcel Birgelen]

What do you do when someone wants to buy a 50 cent lollipop and whips out his card?

It all depends on your situation and what you can do, both legally and contractually with your payment providers.

Around here for example, the general rules are:
- You cannot charge extra for electronic payments.
- You can deny electronic payments, especially for small amounts, but you need to explicitly state this via signage.
- Although many locations are now "electronic only", a recent court verdict has struck this down. Still, many locations don't yet comply with this ruling.

Since debit card transactions are usually pretty cheap around here, it's normal to accept those transactions for any payment, even the smallest ones. Some locations also accept credit card transactions for those smaller charges and they "eat" the transaction cost. I guess the trick is not to sell single lollipops for 50 cents... You'd be hard pressed to find a lollypop for under the equivalent of $2.50 at any cinema around here... I recently checked my receipt and I've seen "nacho sauce" selling for EUR 2.60...

There is a great discrepancy here between payment cultures: Germans are still used to pay cash and entire businesses still operate cash only, while in the Netherlands and Belgium, not accepting electronic payments will probably be your commercial death sentence. While in the Netherlands electronic payment was already the default before COVID, I guess COVID gave it the last bump, same for Belgium, where cash used to be a bit more prevalent still, yet ever since COVID I'd say cash is the outlier. I guess it also helps that most payment systems nowadays more or less seamlessly work cross-border. I still can remember a time, this was different...

Still, it's striking to see how dependent we've become on those systems. Just yesterday I stopped at a gas station that didn't have a working Internet connection and therefore couldn't accept any kind of electronic payment. I was lucky enough to still have some cash on hand. At least, this gas station still had a POS that worked without a "cloud connection"...

[Steve Guttag]

What I think should happen is that those entities that make currency (e.g. Government institutions) should be able to issue their own cards, just like a bank card but without the "credit" aspect. Eliminate the transaction fee/swipe charge entirely. Get it back to the equivalent of playing cash and cut out the middle-man, so to speak. Credit Cards can still exist, for those that wish to bank that way. But with a government issued card, the cost of the transaction should be eliminated, just like paying with cash. Give it the same protection as credit cards too (if lost/stolen/forged). And the same penalties as currency forging/manipulation.

I find it insane that we pay a 3rd party for a transaction that shouldn't involve them at all. This is a transaction between the customer and the vendor. The currency is from the government.

[Jack Ondracek]

I have those little "Gummy Burgers", that kids will spend their last pocket change on. I've never seen anyone try to pay for one of those with a card, so I don't think I'd worry about the occasional one-off.
Beyond that, we tend to "bake in" the cost of credit transactions into our prices, so we kind-of look at it in a reverse way. If someone uses a card, we get what we expected. If they use cash, it's a bonus.

Our plastic use also skyrocketed, especially after Covid.

[Paul Finn]

I have been to two grocery stores this week that will no longer accept or return pennies. The items' price is either rounded up or down to the nearest five cents.

Paul Finn

[Lyle Romer]

I have been to two grocery stores this week that will no longer accept or return pennies. The items' price is either rounded up or down to the nearest five cents.

Paul Finn

I guess the saying "pinching pennies" will not be understood by the next generation!

[Marcel Birgelen]

What I think should happen is that those entities that make currency (e.g. Government institutions) should be able to issue their own cards, just like a bank card but without the "credit" aspect. Eliminate the transaction fee/swipe charge entirely. Get it back to the equivalent of playing cash and cut out the middle-man, so to speak. Credit Cards can still exist, for those that wish to bank that way. But with a government issued card, the cost of the transaction should be eliminated, just like paying with cash. Give it the same protection as credit cards too (if lost/stolen/forged). And the same penalties as currency forging/manipulation.

I find it insane that we pay a 3rd party for a transaction that shouldn't involve them at all. This is a transaction between the customer and the vendor. The currency is from the government.

There are so many parties profiteering from this transaction business, it's going to be hard to get them all thrown out there. For example, if you pay via Apple Pay or Google Wallet, both of those parties skim a few cents off of your transaction, while providing almost nothing of value. The payment provider wants their cut, the card issuer wants their cut and in most cases, there also is a bank involved that wants to get their cut too. Banks and credit card companies are going to claim that they're essential for fraud control, etc., while being guilty of producing one of the most insecure payment systems on this planet: The credit card system itself.

Yet, over here in the EU, it's going to look like it's finally happening, as the first countries are launching Wero (terrible name) as a standard direct payment system both for POS and on-line sales, without any involvement of any of the usual suspects (Visa, Mastercard, etc.). Looks like there are not going to be any "Wero cards" though, the thing will be entirely app-driven...

[Mark Gulbrandsen]

I haven't used cash very much since COVID. Cash caries lots of germs. Being immunosuppressed, actually makes using cash somewhat dangerous for me... I recently spent 4 days in the Hospital just because of a cat scratch on my hand. I typically use debit and credit cards.

[Steve Guttag]

Oh, I didn't say it would be a cake-walk. Yes, no entity (including government agencies) like to give up on getting money! I'm just saying that, from a consumer (citizen) point of view, there shouldn't be a 4th party involved in purchasing. It is the seller, buyer, money issuing agency (almost always government). If you're bartering, you can skip the government too. There could be an argument about the bank always being involved (your card/app has to get money put into it and that will likely be your bank, like a debit/bank card).

[Leo Enticknap]

I have been to two grocery stores this week that will no longer accept or return pennies. The items' price is either rounded up or down to the nearest five cents

They are trying to get ahead of the curve. The government has stopped minting pennies (clarification for international readers: the US Federal Government has ended the production of one-cent coins), because they cost about 4-5 times their face value to produce. You could melt them down for scrap value and make a tidy profit, and evidence that organized criminals were doing so on a significant scale was part of the reason for that decision.

However, it's a bit of a gray area, because existing pennies continue to be legal tender, thereby incurring the risk of disputes at the checkout if a retailer can't make the exact change. IMHO, they should have announced an end of legal tender date if they were going to cease production, as was the case with the halfpenny coin in the UK (the last production was in 1967, and at that time, it was announced that the remaining coins in circulation would cease to be legal tender on July 31, 1969). That would have provided a clearly defined end date, beyond which you can't pay for anything with them and cannot expect to be given cash change in less than 5c increments. As things are and as Paul notes, this is now being done on an ad hoc basis by individual retailers.

Still, it's striking to see how dependent we've become on those systems. Just yesterday I stopped at a gas station that didn't have a working Internet connection and therefore couldn't accept any kind of electronic payment. I was lucky enough to still have some cash on hand. At least, this gas station still had a POS that worked without a "cloud connection"...

That is why I carry enough cash with me to be able to cover any small to medium purchases I may wish to make in a situation like that. Even then, I've still been bitten. Checking into a hotel in February, I was greeted by the sight of about 15 people standing around in the lobby area, and a lady behind the desk frantically on her personal cellphone to some tech support person, probably in a call center in Bangalore, almost in tears. The reason was that the Internet connection to the building was out, meaning that not only the system that handled electronic payments from customers, but also the system that encoded the RFID cards that open the doors to the hotel rooms, were completely inoperable. So she couldn't check anyone in. I arrived at the hotel at about 10p and was waiting in that lobby for an hour and a half, having been up and either working or in transit since 3a that morning, and having to be up at 5a the following morning. In the end she had to take photocopies of everyone's credit cards and write down, by hand, all the details she could extract from everyone (e.g. their reservation numbers if they had them) on the piece of paper with the photocopy. She then had to have a security guard, who had a master RFID card that would open all the rooms in the building, escort guests one by one to their rooms, having first consulted other paper records to figure out which rooms were occupied and which were available. I only got around three hours' sleep that night. Their Internet service was still NFG when I checked out, and my card wasn't charged, and I didn't receive the invoice, until about a week and a half later (which also annoyed me, because not having the official, final bill, delayed my being able to file my expense report for that trip)..

I found it staggering that a business as large as a 150-room hotel did not have a more elegant backup plan than the one this poor lady had to figure out on the fly.

[Harold Hallikainen]

It seems like that hotel should have had two internet connections. I see that tmobile offers a backup service where you only use it if your main service goes down. As we become more dependent on always on connections, this seems to be required. I wonder how they dealt with other utility outages. What happens if the power goes out? How about telephone (though that's probably over the internet connection now). For a theater, you might just be able to say the show is cancelled, everyone go home. That seems more difficult for a hotel. It does seem like they dealt with the issue. I remember flying once and the airline computer system was down, so seat assignments were not available. This was back when everyone had a printed boarding pass. The gate agent had a drawing of the seating plan of the plane where each seat was a peel off sticker. The agent would peel that seat sticker off, and stick it on your boarding pass. They were prepared!

[Harold Hallikainen]

On accepting credit cards, I'm in a nonprofit where we accept Zelle payments. We have a QR code the people scan from within their banking application, key in the amount, and it shows up in our bank account with no service charge. It's interesting that they can do it for no fee. How much of the merchant fee on credit cards goes back to the card holder as "rewards" or cash back? The QR code we use only identifies who the money is going to. It would be nice if it would also preopoulate the amount and memo fields so we could track the income more easily.

So... any theaters accepting Zelle instead of credit cards?

[Marcel Birgelen]

Until a few years back, it was normal for a hotel of any decent size to have something like an "IT room" or "equipment room", where the servers would be located that would run the local IT systems, like reservation systems, POS and access card systems. Many chains but also many smaller hotels have completely done away with that concept and the same actually also happened to many cinema chains. Ever since Oracle bought MICROS, which was the biggest player in the hospitality IT systems space, everything is on-line by default. While a backup internet connection is almost a must-have nowadays, it doesn't protect you from centralized "oopsies", or like what recently happened in the Middle East... where several Amazon datacenters found itself to be the target of some attack drones. But hey, let's continue to centralize everything into "the cloud'... What 'cloud' go wrong?!

Regarding Zelle: Isn't Zelle "just another payment app", like PayPal, Stripe and whatnot? The sole reason for those things to even exist is because both government and banks are too incompetent to act and roll out a decent payment system themselves, like pointed out before. It's almost shocking that the EU can be seen as "progressive" in this space... That being said, the U.S. banking system has always been a bastion of old traditions and rituals, long extinct everywhere else... I think over here, the cheque essentially died a quiet death over 35 years ago. While most of the "civilized worlds" including quite a bunch of "shithole countries" (not my words) have moved over to IBAN, money in the U.S. is still seemingly distributed by horse drawn carriages: I can wire a bazillion euros in a few seconds and a single mouse click to some random guy living in a hut in rural Africa, but paying a friend in the U.S. still makes a root canal treatment look good... (I often ended up buying some Amazon Gift Cards, like I'm being scammed by some nice Indian guy from Microsoft, trying to fix my computer...)

Back to Zelle: The new European solution to rulle them all will also essentially be app-based, entirely doing away with the idea of fancy plastic cards. The difference though, is that the backend stays the same, as in your existing payment provider will pick it up and it will neatly integrate into your POS system, presumably also without hardware upgrades. This integration is essential for businesses, not just to make administrative overhead workable, but quite often also for fiscal accountability. Many of those "point-to-point" payment solutions, that allow you to pay via "QR code", require you to keep a separate administration of all those transactions.