I have told you all many times before that I hardly ever have cash in my wallet… I know, it is a bad trait to have, but for the most part nothing has forced me to start carrying cash. As a merchant you all may cringe when you have a customer pay with a credit card or debit card for a small purchase. I am guilty of using my debit card for tiny purchases. One of my favorite drinks is a large water with lemon from Sonic. The total bill for my drink $0.56, and yes, I have paid this with my debit card… By the time the merchant pays their authorization fee ($0.10 or more), their fee for processing the credit card (could be as high as $0.22 + 1.9%) they will pocket $0.23 of the original $0.56, which is HALF of what they actually charged me! The $0.23 still needs to pay for the carhop to make and deliver my drink, cover the cost of the cup, and pay ingredients in my order (lemons can add up). So when it is all said and done Sonic is probably in the hole in order to give me my water with Lemon.
This situation may be an extreme example, but I truly believe this is something all businesses need to think about. With debit cards and credit cards becoming more and more popular, merchants are at the mercy of credit card processors. And it is not like Visa and Master Card are going to lower rates for you, so the cost to process these cards becomes more and more costly to you. So, as a business, what can you do to protect yourself from this scenario? Set a minimum order when customers use a debit or credit card. Requiring a minimum amount in order to process a card is not a new concept, but not many businesses have put it into play. Before I started working with Merchants I would have never thought twice about using my debit card for small purchase. Now I apologize over and over again when I have to use my debit card for something small.
With Cart32’s eCommerce solution you can set a minimum order amount in your shopping cart. Here are instructions on how you can implement this on your website. If you are a brick and mortar store you can simply display a sign that states a $5.00 minimum in order to use a debit or credit card. Implementing this strategy is completely up to you as the business owner. Some may think it is a good idea and some may not. It all depends on your clientele and what you sell. The bottom line is to make sure you are not losing money on any transaction due to credit card fees.