18.Jul.2012 Dreams of Cream

I spoke with a writer Stephanie Findlay this week from The Star for a feature appearing in the business section this week, on the subject of going cash only.

Check out the online version here, and keep an eye out this week for it if you read The Star daily.

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Now hear this.

The reasons I believe in keeping Sam James Coffee Bar a cash only operation are these.

1. Cash is fast. So are we. We know our stores are small, and most of you are on the run, so we hustle to keep you in and out as smooth as possible, that means keeping our prices low and even so you can carry a few bucks and not worry about exact change, or big breaking big bills. We tried various methods of prep and teamwork to find the absolute fastest way to produce what we do without compromising the quality of a handmade coffee. Our spaces are custom built for speed and efficiency, that’s how serious we are about it. Using plastic for a small purchase is the antithesis of everything you just read.

2. As discussed in The Star article, the cost of using plastic falls ONLY on the merchant who accepts plastic payment. That cost is firstly, the monthly charge for use of the hardware, but also the per transaction charge that the merchant must pay to the credit card company. That charge has a range based on whether it is debit, or credit, as well as how premium the credit card is, or the brand of card. For example, a basic student credit card would cost the merchant 1.65% of the total purchase, a negligible 5 cents on a $3 purchase. Which is exactly how the card companies advertise to merchants, based on the lowest possible card premium possible. Does anybody reading this NOT have a Travel card, or some kind of rewards card? Exactly. NOBODY has a basic card except for 18 year olds! The kind of cards you actually see as a merchant are the kind that cost upwards of 5% of the total purchase, and in some cases will even add a fixed amount as well. Im talking about high end Travel, Platinum, Avion, Black, AMEX….. cards. So now you take 5% of a $3 purchase, and you have 15 cents, and possibly an additional fixed charge (3-5 cents), and you’re looking at a max of 20 cents of that total going to the credit card company, to fund the rewards they give to their consumers. To think, the credit card companies can’t even pay for the rewards they say they’re giving you for using their card? They aren’t giving you SHIT, they have lobbyists who’re so embedded in the government that they keep it legal for this kind of swindle to happen. Meanwhile you pay 15-18% of your balance if you’re late by a day, they’re giving credit to people who can’t afford to be good customers and pay their debt, and denying credit increases to customers who can pay on time, and they cant even soak the cost to cover the rewards they advertise!!! Not in my fucking house. That’s a swindle, and I’m not playing along. It is in fact illegal to place a surcharge on a consumer for using a credit card for the purposes of covering the costs of the transaction. Its illegal because the card companies lobby for it to be. Its a ridiculous law, yet it exists, because the card companies are bigger than the man, and they say how its gonna be.  So if it costs me an extra 20 cents to sell a coffee for $3, that means my profit on that drink has gone down by 20%, go ahead and tell me I should be OK with that. Nope is all I gotta say.

3. Credit card purchases cause inflation. If the use of accepting card purchases causes the profits of a business to decrease even as little as 5-10%, that loss will inevitably be absorbed into the items for sale, and effectively all customers of that store. That means, even customers who have never once paid with anything but cash, now have to pay for the inflation caused by those who pay with credit. And, because those charges are based on percentage of sale, no amount of reasonable price increase can cover the cost of the transaction, as it increases with the price increase based always on %.

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5. On principle, it is just plain lame to use your credit card for a small purchase. Its what children, paroled convicts, and people with joint accounts and a controlling partner do to monitor every purchase. If you do that, don’t even come to my coffee shop until you’ve mellowed out from that uptight shit. Get some cash, be an adult, and quit whining. You need cash, humans need to have tangible currency, that’s all.

6. One of the main reasons I’ve stayed cash only, is my philosophy on treating my staff as #1 priority. Without good staff, you don’t have good coffee, without good coffee, you don’t have shit. There’s 2 main reasons staff will quit. 1 – they feel unappreciated and 2 – they don’t make enough $. By accepting only cash, keeping my prices fair and even, it makes it easy for you to thank us with a small tip, and we really appreciate that, so much so that you can see it when you come into my shops. The staff are skilled, and experienced because they stay long enough. This is a direct affect of feeling appreciated, and making good money, thanks to you and your tips. In every example I’ve experienced the transition from cash only to accepting credit, I saw no increase in sales. The only change was that staff made significantly less tips due to digital payment, eventually moved on, and so did the quality and consistency.