A prominent dealer called us this week with a problem: The fees credit card companies were charging him have been rising steadily and are starting to take out a noticeable chunk of his revenue.
A Forbes column last August asked why it is that more small businesses don’t accept credit cards, noting that nearly all consumers carry at least one card.
According to Intuit data cited in the column, 55% of the 27 million small businesses in the U.S. do not accept credit cards. And, given that up to 66% of point-of-sale transactions are done with credit, debit, or gift cards, merchants are turning their backs on a lot of money.
“So why do many merchants refuse to accept cards? The common reason is the fees, but with $127 billion being added to the economy between 2008 and 2012 through card usage, most merchants are starting to pay attention to accepting credit cards,” writes TJ McCue in Forbes.
For LBM dealers, profits and revenues may be up, but when a card company takes 2% of a sale, the costs pile up, he said. And the problems mount if you already give a discount for paying by the 10th of the month. His firm is even thinking about offering a discount for paying by check. And then there are rental fees for the POS equipment, bank fees, transaction fees, etc.
The dealer asked us this: Are other LBM executives nationwide seeing this problem, too? What’s the impact on their revenues? And most important, what are they doing about it?
Please help this dealer—and the entire industry—by telling us your experiences and, hopefully, your responses.