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Look, I've been Indian my whole life. This guy 100% misses the boat and is clueless on how the real world works. Such naivete it's painful to read..... The re

Look, I've been Indian my whole life. This guy 100% misses the boat and is clueless on how the real world works. Such naivete it's painful to read..... The reason gas stations run aggressively on cash is because they're running two different sets of books a majority of the time. Same for laundromats, motels, etc... Now guess which group of people runs these businesses? I used to ask my father why we didn't go get a "Brown" loan from a group of Indians and then go open a small business. My father replied "We don't break the law." He sat me at a Denny's across from a gas station, he told me to watch the people going into the store and count the items they walked out with. He explained to me that there are Indians who don't pay the tax man and pocket the cash and asked me to never be one of those. To this day, if I want to get a low or zero interest crowdsourced loan from a squad of Indians to go open a gas station or small convenience store, I should have no trouble doing so. I've never bothered. Years later, after sitting down with my father, I got access to cell phone movement data overlaid on gas stations. It was very revealing when combined with CC transaction data that was also purchased. 2 different sets of books and the author of this doesn't even bother mentioning it.

gruez 5y ago
> Look, I've been Indian my whole life. Why is this relevant? >The reason gas stations run aggressively on cash [...] they do? Most of the gas stations I see are pay at the pump, and inside the convenience store I'd say most people are paying with credit/debit.
- kumarski 5y ago
  Still heavy cash transactions for the bootstrapped <15 location gas station franchises. ATMs, etc... 60% of the 130K-ish gas stations in the USA are Indian owned, but we only make up <1% of the population. (old metrics)
  - gruez 5y ago
    > Still heavy cash transactions for the bootstrapped <15 location gas station franchises. What counts as "heavy"? 5%? 15? 50%? Based on my observations it doesn't look like it's happening at a significant enough scale for it to meaningfully make a dent on gas station profitability numbers. >ATMs, etc... Why would someone use an ATM to pay for stuff? I don't think I ever saw a gas station that didn't accept debit. If anything gas stations offer a free "ATM" in the form of "cash back" transactions.
- judge2020 5y ago
  > Why is this relevant? I don't try to stereotype, but i've heard that the culture in India encourages getting free stuff or paying as little as possible to get the most stuff. https://www.sundayguardianlive.com/business/indias-culture-freebies-powers-electoral-fortunes https://www.sundayguardianlive.com/business/indias-culture-f...
  - FraaJad 5y ago
    Who doesn't want free things or "discounted" or BOGO or "Going out of business sales". The linked article has nothing to do with the discussion here. You are just projecting something else here.
    - kumarski 5y ago
      It has a lot to do, he's talking about the performance accounting on gas stations. Yes, gas stations make low margin on gasoline. Also, gas station owners in the < 15 location category are cheating taxes to get there. Think of them as Mini-Bezoses. :)
- FraaJad 5y ago
  because a significant number of gas stations are run by Indians. Owning a gas station is on the ... Truck Driver -- Gas Station -- Motel .. spectrum for blue collar immigrants from the subcontinent.
  - addicted 5y ago
    I don’t understand how being Indian gives the OP any special insight on the business model of gas stations just because they’re also run by Indians. As far as I’m aware neither is gas station business model knowledge hereditary nor is it taught in Indian school textbooks or part of Indian cultural learning.
    - david38 5y ago
      You missed the part where he states he was taught by his Indian father.
      - gruez 5y ago
        Considering that he didn't mention that his father owned a gas station, I'd going to say that what he got from his father is hearsay at best. It's not any more any reputable than "my indian friend told me that his cousin said...".
fortran77 5y ago
> The reason gas stations run aggressively on cash is because they're running two different sets of books a majority of the time. This is why I get annoyed when I hear people say "the 'rich' aren't paying their taxes." In fact it's the "poor" -- or rather the people who purport to be poor -- who aren't paying their taxes. Every dime I earn the Government knows about. But every time I have to do business with a someone who will only accept cash, I see much evidence of shady bookkeeping.
- deleted 5y ago
  [deleted]
- addicted 5y ago
  Except this is absolutely wrong but sure. The idea that the IRS (actually state tax agencies since a lot of gas and sales taxes go to states) don’t know about and aggressively target small businesses is fiction. In fact, the likes of small gas stations falls squarely in the tax evasion targeting sweet spot because they are large enough to draw enough money from in a tax evasion case, but not large enough that they will use up government resources in never ending lawsuits.
fensterblick 5y ago
That may be the case for some gas stations but it is hardly the case for the vast majority of them. The majority of them are run by law abiding citizens who want to follow the law. They want no legal trouble. I am Indian too, with a father that owned and ran a gas station. (My dad's shop was among the top gas-volume stations in America during his time, I forget exactly how much, but he had a few trophies from the company for it). They preferred cash during his time because the 2-3% charge was a significant dent in margins. When credit cards started becoming popular, dealers still did not want to take it. So the company encouraged dealers to accept it by promising to refund the charges for a time. I don't dispute that cheating like what you described happens. I dispute the implication that cheating the IRS is why most businesses prefer cash instead of credit.
- prepend 5y ago
  > The majority of them are run by law abiding citizens who want to follow the law. What’s your basis for this? Logically, it seems to fit that the reason cash is preferred is for the illegal aspect of tax dodging/money laundering. Because the numbers don’t add up otherwise. It’s great that your family is honorable and did the right thing, but it’s just an anecdote, like OP’s. But it doesn’t explain why so many businesses would be able to stay in business doing so.
  - fensterblick 5y ago
    That the IRS is not overwhelmingly prosecuting this type of crime. What's the basis for the converse? What numbers don't add up?
    - prepend 5y ago
      My reasoning is that cash yields lower profits due to reduced purchases, higher insurance cost, higher crime risk. There doesn’t seem a reasonable reason to be cash only since, even though credit has a 3% hit or whatever, people spend more with credit. There’s a need for money laundering and that is much easier with cash only businesses.
annoyingnoob 5y ago
Just because you find your culture tends to shady things does not mean that others do. I worked at a service station in the early 90s, the owner was honest but going broke. We made $0.10/gallon on average, the sales of cigarettes, chips, and soda kept that station going. We had service bays but as more cars became proprietary and needed dealer service we had less service business. When the US invaded Iraq it really removed any profit that small station owners made from gas. That station no longer exists, it was removed and in the space is now a small medical office.
- addicted 5y ago
  The idea that all the Indian run businesses in the US do shady stuff is beyond fiction. If this random HN guy knows this, you can bet the IRS and a variety of state agencies would also know this and target them very effectively. The reality is that in a business where gross profit margins are around 2% at best, you don’t need to go to tax evasion to understand why they would choose to encourage a payment method that does not incur a 2.6% + 30c cost on every transaction.
  - annoyingnoob 5y ago
    Right, the implication that cash based businesses, particularly Indian based businesses, are doing the wrong thing is offensive. Yes, its makes sense for some businesses to be mostly cash based for valid reasons beyond cheating the system.
  - annoyingnoob 5y ago
    Also wanted to point out that if you have a brand name gas station franchise, that brand name has a lot of say in what you do. You will be taking their credit cards, and pretty much any other card, etc. The brand name wanted the station to close the service bays and turn that space into a junk food store. The station owner believed in the service bays but really couldn't pull in the business. Had it become a junk food store it would probably still be there.
addicted 5y ago
Also, I’m not sure when taking a loan from a group of private investors became illegal.
- xuki 5y ago
  No, he implied that to survive running a gas station, they will need to break the laws (tax evasion).
tlogan 5y ago
> The reason gas stations run aggressively on cash is because they're running two different sets of books a majority of the time. I do not know about this. Every single gas station that is cash-only, they also allow debit cards which you cannot be used for tax evasion. The main reason is station owner doesn't want to pay processing fees for credit card transactions since margins are so thin. But if they have a store they will enable CC, Apple Pay, Android Pay, and all other things. This is where the money is. This is my anecdotal experience (from talking with an owner) and this article confirms that.
manishsharan 5y ago
You admit to having never run a gas station and you are making unsubstantiated claims. Most small store, regardless of ethnicity of owners,prefer cash as credit cards take a bite out of their margins.( I have never owned a store but I had worked as a cashier in a family store. ) Your father and you need to see a therapist if this is what you thing all (tax fraud)Indian owned stores are doing.
- lupire 5y ago
  Cash is expensive and dangerous to handle as well.
kumarski 5y ago
Okay in hindsight, my words were a bit harsh. I do wish the article would cover some of the nefarious aspects of small business sectors in the USA.

gruez 5y ago

> Look, I've been Indian my whole life. Why is this relevant? >The reason gas stations run aggressively on cash [...] they do? Most of the gas stations I see are pay at the pump, and inside the convenience store I'd say most people are paying with credit/debit.

kumarski 5y ago
Still heavy cash transactions for the bootstrapped <15 location gas station franchises. ATMs, etc... 60% of the 130K-ish gas stations in the USA are Indian owned, but we only make up <1% of the population. (old metrics)
- gruez 5y ago
  > Still heavy cash transactions for the bootstrapped <15 location gas station franchises. What counts as "heavy"? 5%? 15? 50%? Based on my observations it doesn't look like it's happening at a significant enough scale for it to meaningfully make a dent on gas station profitability numbers. >ATMs, etc... Why would someone use an ATM to pay for stuff? I don't think I ever saw a gas station that didn't accept debit. If anything gas stations offer a free "ATM" in the form of "cash back" transactions.
judge2020 5y ago
> Why is this relevant? I don't try to stereotype, but i've heard that the culture in India encourages getting free stuff or paying as little as possible to get the most stuff. https://www.sundayguardianlive.com/business/indias-culture-freebies-powers-electoral-fortunes https://www.sundayguardianlive.com/business/indias-culture-f...
- FraaJad 5y ago
  Who doesn't want free things or "discounted" or BOGO or "Going out of business sales". The linked article has nothing to do with the discussion here. You are just projecting something else here.
  - kumarski 5y ago
    It has a lot to do, he's talking about the performance accounting on gas stations. Yes, gas stations make low margin on gasoline. Also, gas station owners in the < 15 location category are cheating taxes to get there. Think of them as Mini-Bezoses. :)
FraaJad 5y ago
because a significant number of gas stations are run by Indians. Owning a gas station is on the ... Truck Driver -- Gas Station -- Motel .. spectrum for blue collar immigrants from the subcontinent.
- addicted 5y ago
  I don’t understand how being Indian gives the OP any special insight on the business model of gas stations just because they’re also run by Indians. As far as I’m aware neither is gas station business model knowledge hereditary nor is it taught in Indian school textbooks or part of Indian cultural learning.
  - david38 5y ago
    You missed the part where he states he was taught by his Indian father.
    - gruez 5y ago
      Considering that he didn't mention that his father owned a gas station, I'd going to say that what he got from his father is hearsay at best. It's not any more any reputable than "my indian friend told me that his cousin said...".

fortran77 5y ago

> The reason gas stations run aggressively on cash is because they're running two different sets of books a majority of the time. This is why I get annoyed when I hear people say "the 'rich' aren't paying their taxes." In fact it's the "poor" -- or rather the people who purport to be poor -- who aren't paying their taxes. Every dime I earn the Government knows about. But every time I have to do business with a someone who will only accept cash, I see much evidence of shady bookkeeping.

deleted 5y ago
[deleted]
addicted 5y ago
Except this is absolutely wrong but sure. The idea that the IRS (actually state tax agencies since a lot of gas and sales taxes go to states) don’t know about and aggressively target small businesses is fiction. In fact, the likes of small gas stations falls squarely in the tax evasion targeting sweet spot because they are large enough to draw enough money from in a tax evasion case, but not large enough that they will use up government resources in never ending lawsuits.

fensterblick 5y ago

That may be the case for some gas stations but it is hardly the case for the vast majority of them. The majority of them are run by law abiding citizens who want to follow the law. They want no legal trouble. I am Indian too, with a father that owned and ran a gas station. (My dad's shop was among the top gas-volume stations in America during his time, I forget exactly how much, but he had a few trophies from the company for it). They preferred cash during his time because the 2-3% charge was a significant dent in margins. When credit cards started becoming popular, dealers still did not want to take it. So the company encouraged dealers to accept it by promising to refund the charges for a time. I don't dispute that cheating like what you described happens. I dispute the implication that cheating the IRS is why most businesses prefer cash instead of credit.

prepend 5y ago
> The majority of them are run by law abiding citizens who want to follow the law. What’s your basis for this? Logically, it seems to fit that the reason cash is preferred is for the illegal aspect of tax dodging/money laundering. Because the numbers don’t add up otherwise. It’s great that your family is honorable and did the right thing, but it’s just an anecdote, like OP’s. But it doesn’t explain why so many businesses would be able to stay in business doing so.
- fensterblick 5y ago
  That the IRS is not overwhelmingly prosecuting this type of crime. What's the basis for the converse? What numbers don't add up?
  - prepend 5y ago
    My reasoning is that cash yields lower profits due to reduced purchases, higher insurance cost, higher crime risk. There doesn’t seem a reasonable reason to be cash only since, even though credit has a 3% hit or whatever, people spend more with credit. There’s a need for money laundering and that is much easier with cash only businesses.

annoyingnoob 5y ago

Just because you find your culture tends to shady things does not mean that others do. I worked at a service station in the early 90s, the owner was honest but going broke. We made $0.10/gallon on average, the sales of cigarettes, chips, and soda kept that station going. We had service bays but as more cars became proprietary and needed dealer service we had less service business. When the US invaded Iraq it really removed any profit that small station owners made from gas. That station no longer exists, it was removed and in the space is now a small medical office.

addicted 5y ago
The idea that all the Indian run businesses in the US do shady stuff is beyond fiction. If this random HN guy knows this, you can bet the IRS and a variety of state agencies would also know this and target them very effectively. The reality is that in a business where gross profit margins are around 2% at best, you don’t need to go to tax evasion to understand why they would choose to encourage a payment method that does not incur a 2.6% + 30c cost on every transaction.
- annoyingnoob 5y ago
  Right, the implication that cash based businesses, particularly Indian based businesses, are doing the wrong thing is offensive. Yes, its makes sense for some businesses to be mostly cash based for valid reasons beyond cheating the system.
- annoyingnoob 5y ago
  Also wanted to point out that if you have a brand name gas station franchise, that brand name has a lot of say in what you do. You will be taking their credit cards, and pretty much any other card, etc. The brand name wanted the station to close the service bays and turn that space into a junk food store. The station owner believed in the service bays but really couldn't pull in the business. Had it become a junk food store it would probably still be there.

addicted 5y ago

Also, I’m not sure when taking a loan from a group of private investors became illegal.

xuki 5y ago
No, he implied that to survive running a gas station, they will need to break the laws (tax evasion).

tlogan 5y ago

> The reason gas stations run aggressively on cash is because they're running two different sets of books a majority of the time. I do not know about this. Every single gas station that is cash-only, they also allow debit cards which you cannot be used for tax evasion. The main reason is station owner doesn't want to pay processing fees for credit card transactions since margins are so thin. But if they have a store they will enable CC, Apple Pay, Android Pay, and all other things. This is where the money is. This is my anecdotal experience (from talking with an owner) and this article confirms that.

manishsharan 5y ago

You admit to having never run a gas station and you are making unsubstantiated claims. Most small store, regardless of ethnicity of owners,prefer cash as credit cards take a bite out of their margins.( I have never owned a store but I had worked as a cashier in a family store. ) Your father and you need to see a therapist if this is what you thing all (tax fraud)Indian owned stores are doing.

lupire 5y ago
Cash is expensive and dangerous to handle as well.

kumarski 5y ago

Okay in hindsight, my words were a bit harsh. I do wish the article would cover some of the nefarious aspects of small business sectors in the USA.