Guest Editorial: No Sane Retailer Would Ask a Customer for a Different Card

Jack Abelson questions the NRF’s premise that a court ruling would really lead to retailers asking customers to use a credit card with a lower swipe fee.

News Item: “Retailers could soon be free to ask customers to use a different card when credit cards with high swipe fees are presented.” This is due to a ruling by a U.S. District Court judge in a recent case. A national retail organization hailed this ruling, saying it will result in lower prices for consumers as it will reduce fees paid by retailers to credit card companies. Of course, that is assuming (I use this word intentionally) any retailer is foolish enough to ask the question.

Let us examine the possible responses. First, and probably foremost, when asked if I can use another card, my answer would be: Why do you ask? If I have chosen to use a certain card, which the establishment accepts of course, it is because I had a reason for so doing. It could be because my closing date just passed and I want the extra time to pay; or I want to spread out my balances across several cards; or I want the points/miles associated with the card I am using. Whatever the reason, why on this planet would any sane retailer want to prevent me from using the card of MY choice?

Oh, yes, those dreaded fees! Let’s use, as the man says, simple arithmetic. A typical small retailer who grosses $600,000 annually and, hypothetically, has every dollar in volume paid for using the more expensive card will pay roughly $6,000 more per year in credit card fees. A substantial amount, perhaps, but even in my extreme example, not that much when one considers that even at 40% markup, that equates to an extra $15,000 sales in a year or slightly over $40 per day to cover the cost. $40?! That is what is going to lead a retailer to ask an inane, ridiculous question which should never have been uttered by anyone? Is this truly worth the breath it takes?

Here is the mantra to follow and never forget it: Give the customer as many reasons to buy as possible and as few not to do so, period. The path to success is paved in sales; no business ever saved its way to prosperity and you cannot have profits without sales. As I was taught years ago, how much do you make on an item if you do not sell it? Even intimating that you, as a retailer, have a preference of payment methods is antithetical to good customer service. Why do you accept certain cards in the first place, if you prefer customers use another? And any retailer who does not accept a major card due to the cost is kidding themselves as well. Very few retailers have something so special that anyone would choose to use a specific card in order to buy there (Costco is an exception here, I readily admit, but after all, they are Costco and you are not).

Does anyone think any better quality store is going to follow this foolish concept? Use the same amount of time and brain power to figure out ways to increase your business, as a good merchant always will do; that is the best use of your time as a retailer. Worrying about pennies when dollars are at stake is a fool’s errand and will not help. Keep analyzing your assortment, presentation, your staff’s selling abilities, etc. And for heaven’s sake, do not even consider this credit card question a proper strategy.

Suppose the customer says, as I would, “Of course I have other cards, but I want to use this one.” Now what? Refuse to sell to them? I suppose occasionally a customer might change to another card but realistically, how often will that happen? Clearly, the judge issuing the aforementioned ruling was never a retailer, or at least not a good one. As for the national organization touting this folly, I leave that to your consideration and judgment.