The Bulletin editorializes today that lowering the transaction fees was probably not going to be passed on to the consumer. Therefore -- I guess -- the banks should keep them? Because they've shown such a tendency lately to pass on savings?
Besides being totally illogical and reliably conservative and establishmentarian, this whole thought process totally whiffed the point.
So the retailers won't pass along the savings?
I never thought they would. Call me callow, but it never occurred to me. I always figured it was about banks overcharging the retailers, not the consumer. Just to be clear, these were not charges to the consumer, they were charges to the retailers.
Forgive me for saying so, but it isn't ALWAYS about the consumer.
I hate to tell you, but sometimes when I make money, or save money, I actually keep it.
Shocking, I know.
It's a system I've heard tell is called "Capitalism." You know, where a guy going to work every day actually earns a profit by -- gasp, charging the consumer.
So there you have it -- a 'real' conservative viewpoint.
If I may, I'll turn this around to illustrate.
I never once thought to raise my prices no matter how high the fees got. I never once asked someone to use a debit instead of a credit card or vice versa. I never once turned down a credit card because someone didn't buy enough with it, or put a minimum. (I did mutter a few times that the cost of the transaction nullified the profit -- and a few times I actually gave the person the item in question, because it was a wash...)
It was the "Cost Of Doing Business." I just accepted it, and didn't try to weasel more money out of the customer.
It never occurred to me.
I ate the costs, and moved on.
As far as I'm concerned, "Cost of Doing Business" went down very, very, very slightly.
Big deal.
Meanwhile, the banks lost their first battle. Of course, it was the first time their opponent was Walmart.
That's how much I love the banks, theseadays. I'm rooting for Walmart over them.
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7 comments:
The Bulletin editorial page and RDC can always be depended upon to be on the side of the moneybags.
As can "our" federal government, as a rule. Check out Krugman today" http://www.nytimes.com/2011/06/10/opinion/10krugman.html/?smid=fb-nytimes&WT.mc_id=OP-SM-E-FB-SM-LIN-RBR-061011-NYT-NA&WT.mc_ev=click
Maybe I should have said -- in this case, the customer WAS the retailer.
Actually on this point I am on the side of the consumer. the end result will be a transfer of the fees from the retailer to end the end the consumer. Now if these were going to a result in a reduction of prices then it would be less of an issue.
However, they will not be. So just as the consumer benefited when these fees were established when debit cards came into vogue by direct banking charges being reduced. Since a pretty good percentage of debit card use took the place of credit card use the retailers basically treated this as an over head cost and did not raise prices because of it the end result had been a plus to consumers. Easy access to the debit cards, lower banking fees that they pay directly.
The end result of the change will be retailers benfit, value drops to their bottom line, banks move back to the account fees and the consumer does not benefit from lower prices and they will be negatively impacted by higher bank fees.
End loser the consumer.
As a small (family) retail business owner in Bend, I could not help but notice the irony of the two editorials in the Bulletin...first bashing the State over the Estate Tax because it is bad for small businesses which the Bulletin pretends to support - followed by the editorial that criticizes the Bank credit card merchant fee limits because those evil retail businesses might not pass on the savings to their customers. Wait... Bulletin...I thought you were FOR small businesses? I know that our margins have gotten thinner and thinner, as expenses such as freight have dramatically increased - yet there is a limit as to how much we can pass on to the customer. So this provides a small benefit to us little guys by reducing an expense (that is at near criminal levels in my opinion)...come on Bulletin, cut us some slack, or stop pretending that you support small businesses. I'm with Duncan - I am on Walmart's side on this one (and almost ashamed to say so).
Apparently you must have felt that they were worth the cost. Otherwise you could have refused to accept debit cards. Clearly the value of debit cards was worth the cost of the transaction to your business.
Debit cards expanded to more than fill the gap in credit card use when credit cards became harder to get and credit lines were reduced.
How will it effect your business if 5-10% of your customer base were to lose access to or decide not to use debit cards due to increased fees? Would the reduction still be worth it?
Duncan,
You should start tracking debit card transactions and dollar values and see how they fare over the next year.
"first bashing the State over the Estate Tax because it is bad for small businesses"
Their real reason for opposing it is that it's bad for wealthy families, such as the Chandlers.
"You should start tracking debit card transactions and dollar values and see how they fare over the next year."
I hope Dunc does that. I really would like to see if the doomsday prophecies of RDC, The Bulletin et al. come true. I have a hunch they'll turn out to be about as accurate as those predictions of a mass exodus of businesses if Measures 66 and 67 passed.
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