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I've always wondered about this...I live in SF, where a huge number of the little coffee shops are cash only or have a $10 minimum or whatever. As a result, I
by ryanwaggoner 17y ago
I've always wondered about this...I live in SF, where a huge number of the little coffee shops are cash only or have a $10 minimum or whatever. As a result, I don't go there, I go to Starbucks instead. I get that the transaction costs of $.25 + 3% is brutal on a $1.50 cup of coffee, but wouldn't it be better to just raise the price of the cheaper items in the store by $.25, or even just $.15? The COG on a cup of coffee is what, like ten cents? So your gross profits are good, you just need more volume. Are consumers really so price sensitive that they'd go elsewhere over a fifteen cent increase? I wouldn't...I value convenience and a good cup of coffee over fifteen cents.
- eru 17y agoWhy not just two different prices? Just make sure to call it a cash discount, instead of a credit card markup. This way the store does not care how a customer pays, and the customer can decide for herself whether fifteen cents are worth the convenience. (By the way, why aren't you paying with cash? I find it much more convenient in general than plastic cards.)
- dantheman 17y agoCash is easier than a card? You swipe the card and your done, how can it be any easier? With cash you have to constantly go to the atm, and deal with change.
- ryanwaggoner 17y agoWhy not just two different prices? Just make sure to call it a cash discount, instead of a credit card markup. Someone correct me if I'm wrong, but I'm virtually certain that this violates the merchant agreement with the card networks.