39 ms·

This is a fundamental misalignment between a business and their customers. The business doesn’t care if the customer can actually afford the product and they’re

This is a fundamental misalignment between a business and their customers. The business doesn’t care if the customer can actually afford the product and they’re happy to push off that responsibility to credit card companies or Klarna in this case, but it’s so shortsighted because anyone with two braincells knows that if your customer cannot afford a <$50 purchase without debt, that they can’t afford that thing at all. In the long run, customers who should have been blocked from purchasing due to lack of funds will instead write bad reviews about their experience being sent to a collector over a cheeseburger and they’ll bounce off your platform. “Short term profits ruin everything” for 200 Alex!

gruez 2y ago
>This is a fundamental misalignment between a business and their customers. The business doesn’t care if the customer can actually afford the product and they’re happy to push off that responsibility to credit card companies or Klarna in this case, but it’s so shortsighted because anyone with two braincells knows that if your customer cannot afford a <$50 purchase without debt, that they can’t afford that thing at all. Accepting credit cards theoretically allows businesses to sell to customers that don't have the money. Is this bad, and should we chastise businesses for not limiting themselves to debit payments only?
- trollbridge 2y ago
  Credit cards have some brakes because they only extend credit to people they think will pay it back. Klarna’s marketing pitch is “no credit check”. They then just send an automated ACH to your bank account. If the funds aren’t there they send it over and over, hoping to punish you with returned-payment fees or overdraft fees. It’s quite different than a credit card and significantly more predatory. (Particularly pernicious is their claim if they do run a credit check it’s only a “soft pull”… what they are doing should be a hard pull and create a new trade line for an installment loan, albeit a bizarre 4 payment 4 week term one. Creditors are legally obligated to report accurate information. Klarna is conspiring not to do so.)
  - gruez 2y ago
    >Credit cards have some brakes because they only extend credit to people they think will pay it back. >Klarna’s marketing pitch is “no credit check”. No they're not. If you check the fine print you'll see something along the lines of "subject to approval". They're not giving out free money to anyone who fills out a form.
    - trollbridge 2y ago
      It’s crazier than that. It might be a soft pull or might not be. Whether or not they say it will be a credit check depends on who you are, presumably based on how likely their algorithm thinks you are to turn them down. I ran into this recently helping someone with their finances who forgot about random Klarna purchases… I worked off of their credit report, and Klarna was just on there at all. (Obviously lesson #1 was “don’t do Klarna and stuff like it, even though it’s zero interest”).
  - aaronbaugher 2y ago
    That's what I wonder/worry about with all the various cash/finance apps. I'm no fan of the banks and credit card companies, but at least they're wrapped in regulations that are commonly known and understood. With Joe's Fast Money app, who knows what's backing it or whether there are any rules governing what they can do to you.
- Marsymars 2y ago
  I low-key have a preference for businesses that don’t take credit, since they’re theoretically operating with lower overhead. (Though in practice this is limited to my barber, and my neighbourhood Vietnamese bakery and Montreal bagel shops.) To your actual question, credit cards are tricky because a bunch of services are wrapped together in the same product, and there’s no practical way for businesses to accept charge cards and not credit cards. The number of variables and intermediaries here suggest that this is really a job for regulators - probably not to ban selling to customers that don’t have money, but to make it financially unappealing, e.g. by capping APRs, limiting advertising, etc.
  - vel0city 2y ago
    > since they’re theoretically operating with lower overhead If they're decently sized, they're probably just not accounting for all the labor overhead of taking cash.
    - Marsymars 2y ago
      Yes, that’s a consideration, but none of the are cash-only, they also take Interac debit and Interac e-transfers. (Interac = Canadian debit.)
  - bryanlarsen 2y ago
    They're also likely cheating on their taxes. The cash only places I use frequently pretend to complete transactions on their cash register rather than committing the transaction.
    - Marsymars 2y ago
      As I noted in my other comment, these places aren’t “cash only”, they’re “no credit”. From my observance, most payments are still not made in cash.
- ethbr1 2y ago
  US credit cards, for all their predatory faults, are a competitive marketplace, accessible by anyone able to follow a few steps [0], and provide effectively-free 30-to-60 day loans. If someone can't get a credit card in the US, I'd question if they have sufficient financial literacy to take on micro-loans. [0] https://www.creditkarma.com/credit/i/how-to-build-credit-from-scratch#next-steps-develop-good-credit-habits https://www.creditkarma.com/credit/i/how-to-build-credit-fro...
addandsubtract 2y ago
A) I don't think "DoorDash" cares about its app rating. They've become a household name in the US, much like their siblings in the EU. B) If someone can't afford a cheeseburger, which other platform are they going to switch to?
- grishka 2y ago
  B) They could go buy the cheeseburger themselves. It'll be twice as cheap too. (I've seen DoorDash screenshots on Reddit, it's obscene how much extra they charge)
deleted 2y ago
[deleted]
FeloniousHam 2y ago
My (ex-)sister-in-law would have burritos delivered from the Moe's that was a literal (in the middle-aged sense of that word) ten minute walk* from her house. She was not a wealthy person. This was NOT the fault of DoorDash. I rarely order food delivery, for all the obvious reasons, but if there is a market for this stupid luxury (assuming cooled fries and a soggy hamburger bun qualify), good on DoorDash. Food delivery is not addictive, this is on the free agent spendthrifts who care not for tomorrow. * it was uphill a bit

gruez 2y ago

>This is a fundamental misalignment between a business and their customers. The business doesn’t care if the customer can actually afford the product and they’re happy to push off that responsibility to credit card companies or Klarna in this case, but it’s so shortsighted because anyone with two braincells knows that if your customer cannot afford a <$50 purchase without debt, that they can’t afford that thing at all. Accepting credit cards theoretically allows businesses to sell to customers that don't have the money. Is this bad, and should we chastise businesses for not limiting themselves to debit payments only?

trollbridge 2y ago
Credit cards have some brakes because they only extend credit to people they think will pay it back. Klarna’s marketing pitch is “no credit check”. They then just send an automated ACH to your bank account. If the funds aren’t there they send it over and over, hoping to punish you with returned-payment fees or overdraft fees. It’s quite different than a credit card and significantly more predatory. (Particularly pernicious is their claim if they do run a credit check it’s only a “soft pull”… what they are doing should be a hard pull and create a new trade line for an installment loan, albeit a bizarre 4 payment 4 week term one. Creditors are legally obligated to report accurate information. Klarna is conspiring not to do so.)
- gruez 2y ago
  >Credit cards have some brakes because they only extend credit to people they think will pay it back. >Klarna’s marketing pitch is “no credit check”. No they're not. If you check the fine print you'll see something along the lines of "subject to approval". They're not giving out free money to anyone who fills out a form.
  - trollbridge 2y ago
    It’s crazier than that. It might be a soft pull or might not be. Whether or not they say it will be a credit check depends on who you are, presumably based on how likely their algorithm thinks you are to turn them down. I ran into this recently helping someone with their finances who forgot about random Klarna purchases… I worked off of their credit report, and Klarna was just on there at all. (Obviously lesson #1 was “don’t do Klarna and stuff like it, even though it’s zero interest”).
- aaronbaugher 2y ago
  That's what I wonder/worry about with all the various cash/finance apps. I'm no fan of the banks and credit card companies, but at least they're wrapped in regulations that are commonly known and understood. With Joe's Fast Money app, who knows what's backing it or whether there are any rules governing what they can do to you.
Marsymars 2y ago
I low-key have a preference for businesses that don’t take credit, since they’re theoretically operating with lower overhead. (Though in practice this is limited to my barber, and my neighbourhood Vietnamese bakery and Montreal bagel shops.) To your actual question, credit cards are tricky because a bunch of services are wrapped together in the same product, and there’s no practical way for businesses to accept charge cards and not credit cards. The number of variables and intermediaries here suggest that this is really a job for regulators - probably not to ban selling to customers that don’t have money, but to make it financially unappealing, e.g. by capping APRs, limiting advertising, etc.
- vel0city 2y ago
  > since they’re theoretically operating with lower overhead If they're decently sized, they're probably just not accounting for all the labor overhead of taking cash.
  - Marsymars 2y ago
    Yes, that’s a consideration, but none of the are cash-only, they also take Interac debit and Interac e-transfers. (Interac = Canadian debit.)
- bryanlarsen 2y ago
  They're also likely cheating on their taxes. The cash only places I use frequently pretend to complete transactions on their cash register rather than committing the transaction.
  - Marsymars 2y ago
    As I noted in my other comment, these places aren’t “cash only”, they’re “no credit”. From my observance, most payments are still not made in cash.
ethbr1 2y ago
US credit cards, for all their predatory faults, are a competitive marketplace, accessible by anyone able to follow a few steps [0], and provide effectively-free 30-to-60 day loans. If someone can't get a credit card in the US, I'd question if they have sufficient financial literacy to take on micro-loans. [0] https://www.creditkarma.com/credit/i/how-to-build-credit-from-scratch#next-steps-develop-good-credit-habits https://www.creditkarma.com/credit/i/how-to-build-credit-fro...

addandsubtract 2y ago

A) I don't think "DoorDash" cares about its app rating. They've become a household name in the US, much like their siblings in the EU. B) If someone can't afford a cheeseburger, which other platform are they going to switch to?

grishka 2y ago
B) They could go buy the cheeseburger themselves. It'll be twice as cheap too. (I've seen DoorDash screenshots on Reddit, it's obscene how much extra they charge)

deleted 2y ago

[deleted]

FeloniousHam 2y ago

My (ex-)sister-in-law would have burritos delivered from the Moe's that was a literal (in the middle-aged sense of that word) ten minute walk* from her house. She was not a wealthy person. This was NOT the fault of DoorDash. I rarely order food delivery, for all the obvious reasons, but if there is a market for this stupid luxury (assuming cooled fries and a soggy hamburger bun qualify), good on DoorDash. Food delivery is not addictive, this is on the free agent spendthrifts who care not for tomorrow. * it was uphill a bit