Friday, November 14, 2014

Tilting at Windmills - Fighting the Rising Tide of Add-on Charges for Using Plastic Money

The problem can be small - KFC, for instance, now charges $0.39 per transaction if you use a credit card or debit card.  Or it can be big.  Wo Fat, an otherwise great neighborhood Chinese restaurant in Las Vegas, now refuses to accept plastic money for charges under $10.  That new rule nearly turned into an embarrassment for me last night, as I generally don't carry cash.

But whatever the reason, too many retail businesses have forgotten that the banking fees for taking credit cards or debit cards has always been part of the cost of doing business - and frankly, on a per-transaction basis, not a very big cost of doing business.  Now, they are starting to charge clients for using plastic money, or they're putting floors on chargeable transactions.

What they don't realize is that consumers may not like this - in fact, a growing number of consumers really object to this practice. I'm one of them.

It's really not about the money - hey, it's only $0.39 per transaction.  No, it's about respect. This fee makes me feel like either a "second class customer" - not as good or worthy as cash customers; or it makes me feel like a dupe - an idiot willing to pay a surcharge for a common transaction most retailers ignore by absorbing the cost.

Just because it's legal for a company to do this doesn't make it a smart move.  In the case of KFC, I'm now preferentially buying "family meals" at A&W/Long John Silver, right across the street from my local KFC.  A&W doesn't charge me a fee, and their food is excellent (for drive-through) and comparably priced.

As far as Wo Fat is concerned, I've been a regular customer for 23 years - they serve the best egg fu yong in town.  But their lunch is $5.50 and their dinner is $7.75, so either way, I'll have to pay cash or go somewhere else.  Since I don't routinely carry cash (because everybody now takes debit cards), I'll have to find another good Chinese restaurant. In Las Vegas, that won't be hard.

A word to the wise retailer.  Do not risk pissing off loyal customers over anti-consumer policies that at best pay you a marginal fee ($0.39 for a $25 meal at KFC) or help you avoid fees for smaller transactions. 

And to KFC - it will take 65 meals to make up, at $0.39 each - just one weekly transaction you're losing when I take my business across the street.  And since I was buying the $25 family meal each week, you need a LOT of new customers to make up for the one you've just pissed off.

1 comment:

  1. Why should business have to bear all the burden of those clients who want the convenience of using plastic? Credit card companies continue to raise their fees but take none of the blame or responsibility. Most businesses simply raise their prices to offset these rising costs. have you noticed that Mcdonalds "dollar menu" is now the "buck and UP" menu? At least some businesses have the courage to only charge those customers who incur those fees and not everyone else who doesn't. Nothing is ever free, so if you want the convenience of using your debit card, YOU should pay and not everyone else. So if you think you can simply go somewhere else and not be charged, think again. Those fees are simply built into the price so you won't notice and all the non card users are subsidizing your convenience. thank you. If you want to be angry at someone, be angry at the banks who are making billions of these fees and convincing everyone who uses their cards that they are getting a "free" service.