A slick ATM trick
October 31st, 2006 | by mbhunter |We went to a pizzeria after church on Sunday with some friends. It’s a pizza buffet, so it’s all you can eat for one price, paid up front. We stood in line a few minutes before getting to the cashier.
The other locations of this chain I had gone to before accepted credit cards, so I whipped my plastic out. Then the cashier informed me:
“We take cash or checks. If you need cash, there’s an ATM behind you.”
Most places take credit cards because it usually results in more sales and larger purchases. This comes at a cost to the retailer, though. The merchant fees add up: 30 cents or so per transaction, plus about 2% of the total.
I can see why this particular pizzeria didn’t take credit cards. The price of admission was only about $4.50 each — extra if you bought a drink with it. So our charge was under $10. The merchant fees would knock off 5% of the total. And there was really nothing else to buy once you’ were in there. The only other opportunity to spend money was on video games, and they take coins.
They could have had a point of sale card swiper that took only debit transactions. But an ATM (costing a few thousand dollars) can pay for itself pretty quickly at $2 per transaction. The customers are in line and have been waiting for a while, so it’s really tempting to get the cash right there.
It’s a tad inconvenient for the customer who likes to pay using a credit card as much as possible. But it is probably a wise move for them to do it this way considering the nature of their business, and they’re not breaking any credit card merchant account terms and conditions by only accepting credit cards for a minimum amount.
9 Responses to “A slick ATM trick”
By Matt on Oct 31, 2006 | Reply
I’ve seen many places use this tactic; it works quite well for the business but not so well for the customer.
By JLP at AllFinancialMatters on Nov 3, 2006 | Reply
I’m pretty sure I would walk out of the restaurant. That’s HORRIBLE customer service. Why don’t they just raise their prices and step into the debit card age?
By Flexo on Nov 3, 2006 | Reply
Actually, having a minimum charge requirement is against merchant account rules, though I know a lot of vendors do it. They can have their merchant account revoked.
For example, here’s MasterCard’s agreement. Look at section 9.12.3.
By Dimes on Nov 3, 2006 | Reply
That’s a little passe, but not entirely unexpected with cheapo restaurants. Go somewhere more expensive (say, a printer’s), and it’s shocking when they don’t take plastic. Their ATM wasn’t in the building though, it was out in the parking lot.
By Jonathan on Nov 4, 2006 | Reply
JLP, how is it HORRIBLE customer service? They found out BEFORE placing their meal, so it’s not like they were suddenly forced to use the ATM. They had the choice of going somewhere else.
I agree they should start accepting credit cards, but I wouldn’t call it horrible customer service.
By Ryan on Nov 10, 2006 | Reply
I agree with JLP, I would be out of there. I don’t think a restaurant operating today should not accept cards. At the very least they could have a minimum purchase or a small surcharge.
By frank on Nov 21, 2006 | Reply
I wonder if the pizza place was Cici’s pizza? I’ve been seeing commercials for them in NH but they are no where close to us at all. I remember eating there when I was growing up in TX.
By mbhunter on Nov 21, 2006 | Reply
Frank, good guess! You’re right!