Paul Wallbank, Sydney based computer writer and broadcaster, writing at his Cranky Tech Blog today, talks about a customer service experience at his local newsagency. Paul tried to use a credit card to pay for two newspapers and a magazine – $12 all up. he was told that there was a minimum charge of $15 for credit card payments.
In my newsagencies there is no minimum. Indeed, unlike some other retailers, there is also no surcharge for using Diners or Amex. Our view is there should be no barrier between yo can getting the sale.
Paul’s experience this morning has cost our channel a customer. He says he’ll get his newspaper at the supermarket or petrol outlet now. I bet he not alone in making the shift over this issue of barriers at the counter.
Why do some newsagents do this? Why get in the way of business. Sure there are fees. However, losing 1% – which is the max it should be – on a $12 sale is nothing. 12 cents! A lousy 12 cents is what this is about.
Yes, we have tight margins. But 12 cents? I make that up with a an upsell focus on the floor of the shop. My unresearched view is that the newsagents charging a surcharge or enforcing a minimum for Eftpos are more likely, but not always, those who do not configure their shops to achieve an upsell.
Paull Wallbank makes a point we need to take note of every day in retail:
Businesses need to remember that customer convenience is everything. The harder you make it for a customer to buy from you, the less likely it is that they will.
Whilst not owning a newsagency, I run a different type of small business with significantly higher margins than a newsagent. Amex fees get up to a bit more than 2% and Diners is almost double that. These sort of numbers in dollar terms add up compared to Visa and Mastercard’s fees of around 1%.
The solution we had is to cancel accepting Diners cards with the bank (hardly anyone offers Diners as their first card of choice at our shop – could count it with one hand) and having a surcharge to cover some of the fee associated with Amex. More often than not, customers are more than happy to offer their Visa or Mastercard. We will accept Amex if there is simply no alternative. Contrast this with a major retailer JB Hi Fi which charges a fee for Amex and Diners as well.
Anyway, I’m just trying to offer an alternative view but we don’t have a minimum charge. Heck, you could buy something for $3.95 on the Visa if it was necessary to make the sale.