Companies charging a surcharge to use a credit card… will it change your behaviour?

[morinj]

Originally Posted by Ken3134

There are manufacturers/producers of products, there are wholesalers that run distribution centre's and there are retailers who handle the product to offer it to the consumers. In the example of the Food commodity, these retailers have a profit of 2-4%. To be clear they generate a margin from sales, they use this margin to pay their standby cost, their staff costs, and other costs, and they are left with 2-4% of their sales total as profit. There maybe exceptions of course the odd store doing better than 4%, and there are plenty that operate at a loss - x%. So if cosummers are wanting the retailers to absorb the credit card service fees, there will be many that either remove it as a payment option or simply charge the consumer. Subtracting 2% service fees from their 2-4% profit so that their profit is 0-2% is not an option that's going to spend any time on the table for discussion. The wholesaler is highly unlikely to be interested in helping the retailer in the form of absorbing this cost either.... why would they?
In the end the consumer is going to have to pay. The other option would be to ask the Federal government if credit card company profits are reasonable.

Ok so on a $100 sale the retailer will profit 2$-4$ after paying all overhead?

[Ken3134]

Originally Posted by morinj

Ok so on a $100 sale the retailer will profit 2$-4$ after paying all overhead?

In the Food commodity, yes.

[morinj]

Wow that means a small business would have to do over 3 million in sales just to make 60k, and a company like Costco would have to make trillions in sales! Crazy considering Costco U.S profit over 25 billion last year! The sales would be astronomical!

[FCLightning]

Originally Posted by Ken3134

There are manufacturers/producers of products, there are wholesalers that run distribution centre's and there are retailers who handle the product to offer it to the consumers. In the example of the Food commodity, these retailers have a profit of 2-4%. To be clear they generate a margin from sales, they use this margin to pay their standby cost, their staff costs, and other costs, and they are left with 2-4% of their sales total as profit. There maybe exceptions of course the odd store doing better than 4%, and there are plenty that operate at a loss - x%. So if cosummers are wanting the retailers to absorb the credit card service fees, there will be many that either remove it as a payment option or simply charge the consumer. Subtracting 2% service fees from their 2-4% profit so that their profit is 0-2% is not an option that's going to spend any time on the table for discussion. The wholesaler is highly unlikely to be interested in helping the retailer in the form of absorbing this cost either.... why would they?
In the end the consumer is going to have to pay. The other option would be to ask the Federal government if credit card company profits are reasonable.

You are missing one important point - they are already paying the 2% service fee and the cost of it always has been calculated into their expense sheet. There are no new fees, the only difference now is that they will be allowed to pass on that fee to the customer if they choose.

[roper1]

Originally Posted by Ken3134

In the Food commodity, yes.

I must be reading Weston's financial statements wrong. Could I get you to show us there's only a 2% markup please? And could I get you to explain if that's before or after assumed profits ? Thanks.

[Ken3134]

Originally Posted by morinj

Wow that means a small business would have to do over 3 million in sales just to make 60k, and a company like Costco would have to make trillions in sales! Crazy considering Costco U.S profit over 25 billion last year! The sales would be astronomical!

https://www.ctvnews.ca/canada/the-de...rity-1.5855549

You're on your own after this.

[FCLightning]

Originally Posted by morinj

Crazy considering Costco U.S profit over 25 billion last year! The sales would be astronomical!

That is gross profit before general operating expenses, interest and taxes. Net profit was about 5.8 billion with a profit margin of app. 2.5% on total sales of 225 billion.

[morinj]

Originally Posted by FCLightning

That is gross profit before general operating expenses, interest and taxes. Net profit was about 5.8 billion with a profit margin of app. 2.5% on total sales of 225 billion.

I guess taking a penny from many rather than a dollar from few is a great business model! I worked at a convenience store when I was 18, and I remember making orders for 500ml cokes, and I always wondered how the store made any money, given how much they aid per bottle!

[roper1]

Originally Posted by FCLightning

That is gross profit before general operating expenses, interest and taxes. Net profit was about 5.8 billion with a profit margin of app. 2.5% on total sales of 225 billion.

Certainly some accounting would allow depreciation of fixed assets, you know, like real estate you can depreciate 5% annually while it's going up 5%, etc. That one example alone is a 10% swing.

[FCLightning]

Originally Posted by roper1

I must be reading Weston's financial statements wrong. Could I get you to show us there's only a 2% markup please? And could I get you to explain if that's before or after assumed profits ? Thanks.

You mean this one? It looks like 1.4 billion net on 54 billion sales is 2.6% profit.

[roper1]

Originally Posted by FCLightning

You mean this one? It looks like 1.4 billion net on 54 billion sales is 2.6% profit.

How they account for their expenses are included in their Net profit. The way they claim depreciation & amortization is completely legal, and can be misleading. I'm not sure the simple math explains the whole picture.

[morinj]

Originally Posted by roper1

How they account for their expenses are included in their Net profit. The way they claim depreciation & amortization is completely legal, and can be misleading. I'm not sure the simple math explains the whole picture.

Would this be in reference to tax write offs, acquisitions, and high salaries? I noticed that the profit margin states 2-4 percent on the food distribution, but not on the acquisition of such things as machinery (forklifts, trucks etc) and real estate!

[JeanCretien]

Originally Posted by skidderman

Back to cash and no rewards cards

Agreed
And I hate paying a banker for giving me no value so bonus. Cash it is. Will need the wheelbarrow to buy bread soon though.


Sent from my iPhone using Tapatalk

[morinj]

Yup cash only, however a person should almost think of gripping some gold and silver, to protect the purchasing power of the dollars you have today! Precious metals is great to hedge against inflation, you’ll never need that wheelbarrow!

[dgl1948]

[QUOTE=FCLightning;4567131]That is gross profit before general operating expenses, interest and taxes. Net profit was about 5.8 billion with a profit margin of app. 2.5% on total sales of 225 billion.[
Weston and his family, with an estimated net worth of US$8.7 billion, are listed as the third wealthiest in Canada and 178th in the world by Forbes magazine (June 2019)
They seem to do alright with the current profit margins. Now they should be able to double this.

[Brankon]

Originally Posted by fishtank

Seem like they are really pushing the credit spending with buy now and pay later .. for a $50 item they are offering that option, read the fine print and you see they charged 10-30% apr . But most online shopper especially young people don’t read they just want their item asap .

One day I was making a purchase at Canadian tire and the total came to ~$100 and change, the cashier asked if I wanted to finance it and I chuckled and said "I can't believe that's an option"

[spoiledsaskhunter]

wife and i have started to ask whether or not businesses are passing on credit card costs when they prepare our bill. if they says yes, it is cash only, and i tell restaurants right up front that there will be no tip included in the money i give them (tell the server also and explain why).

right or wrong, i figure that making the server a disgruntled employee because of their employers chickenmanure policy can also have an effect when they are setting their policy re charges.

i also let them know that it will be the last time i darken their door until their charging policy changes.....i'll shop elsewhere.

i'm a grouchy old bugger.

[dale7637]

Originally Posted by EZM

It boils down to the retailer - if they choose to implement these charges as a necessity or added revenue stream (because that's what this is really)

AND

The consumer, ME, who can choose to shop there or not

That's it .... in a nutshell

So .... will it change the way I look at using my credit card - likely not - If I know I'm getting hit with a 2% charge on top of the hundred bucks I just spent, I am smart enough to know I'm paying $102 ..... and if that 2% is a deal breaker .... then so be it - but I doubt it.

I'd rather pay $102 for something I need, and get charged the 2% versus spending $110 down the street somewhere else that does not charge me the fee.

It boils down to the Total I am spending really ...

I agree 100%.

I would think most retailers wont bother with this on smaller purchases if they are thinking straight.. IE under $1000


That being said...I have had numerous customers want to pay for a new or used vehicle with a CC... that brings up a whole different conversation.

[fishtank]

Originally Posted by Brankon

One day I was making a purchase at Canadian tire and the total came to ~$100 and change, the cashier asked if I wanted to finance it and I chuckled and said "I can't believe that's an option"

Everyone is hopping onto the buy now pay later train . Got a email offer from credit card for big purchase on payment plan at 0% annual interest rate …. But a small fee of 4-8% for 6-18 month . Looks like the growth is slowing and banks are on the hunt for new products and revenue stream to maintain growth rate . There is article about banks mortgage agents and real estate agent doing some shady deal to get mortgage approved with fake t4 and income statement , it’s probably more rampant then the numbers in the sample of 6/10 agent was able to provide a service to get mortgage approval :rolleye2 pretty sure the banks upper management are turning blind eye to some of these deals as long as they maintain the numbers and get their year end bonus

[HuyFishin]

Originally Posted by dgl1948

I am sure that credit card use has been built into the price of items years ago. This will just be another 2.5 percent profit for the retailer.

where do you get this data from.

Because all my clients that pay cash,Amex,visa mastercard or interact all pay the same cost at my business. I don't factor in any of those additional credit card fee's.

I welcome anyone that uses American express in my business even if I have to eat a 200 dollar fee by the time I finish a job. Statistically Amex users are usually more wealthy then visa or mastercard users so they will come in with platinum or even centurion black cards with no credit limits. If I told someone I was gonna make him eat that cost he would walk out that door and I would lose upwards of 5000.

No credit card fee's factored in.

As a credit card user myself and a point collector. I always support the companies that take my visa or amex no questions asked.

[dgl1948]

When an item is priced all expenses from the cost of producing to having it out the door is built into the selling price. Credit card use has been around for years. It is only one of the expenses hilt into the price of an item.

[does it ALL outdoors]

Originally Posted by cody j

Do the card companies even really need to charge retailers? Isn’t charging 18% or higher interest enough

Ever see what they make on mortgages? Sickening!

There's no limit to the banks greed. They are scum of the earth


https://www.macrotrends.net/stocks/c...canada/revenue

https://www.macrotrends.net/stocks/c...scotia/revenue

https://www.macrotrends.net/stocks/c...n-bank/revenue

[Selkirk]

.
A good number of the comments here in this thread remind me of . . .

Truth be known, companies in the US, the UK, most of Western Europe, etc., have been allowed to charge extra for credit card purchases, for Years now❗ Yet None of the 'Disaster' that's being speculated by some here in this thread, has occurred in those countries, as a very few companies there have dared to follow through with it.

To all the Chicken Littles here:

Please tell us ... Why is it going to be so 'Horribly Different', here in Canada❓

Selkirk