Sweeping statement, "everyone". Anyway, I agree with the poster that highlighted the issue of debit card customers subsidising those paying by credit card. I'm not a big Ikea customer but would be grateful if all retailers charged less (however you market it), to customers that don't unnecessarily increase their overheads. Seventy pence is hardly a big deal if you’re using a credit card to split the payment of a £500 bed or whatever. How many people capable of getting Visa/Mastercard can’t or don’t have a Delta/Maestro card?
My wife's business accepts credit card payments and TBH they are a double edged sword. They do attract customers, on a recent trial we took about £500 a day more when we took credit cards than on the days when we refused them. However cards put us more at risk than cash/cheque because the consumer can force us to make a full restitution of the money while they keep the goods and that takes ages to sort out.
I have a great deal of sympathy with Ikea on this, we get rooked by the card companies who charge everyone and often charge several times on the same transaction. Ikea's estimate of 70p/transaction sounds better than we get, although it's difficult to work out because it's a combiantion of standing charges, administration charges and percentage of sales value. In the end, the consumer ends up paying and we end up charging those who don't use cards more to subsidise those who do use cards.
The most recent letter we have from the company that provides credit card services warns us that it is illegal to stipulate a minimum purchase value for credit cards or to apply discriminatory pricing
*unless* the customer receives adequate notice of the pricing differences or surcharges. It's even more restrictive for sales of motor fuel. I accepted a payment by card of £6.50 at the weekend, even though that meant we lost money on the sale, partly in the hope that the customer would buy again, partly just to avoid arguments, partly because of that letter.
But 70p *is* a big deal if you habitually buy stuff using a credit card, then buy a £4.50 lamp from Ikea. Suppose Woolworths or W H Smith suddenly demanded an extra 70p from anyone buying their weekly magazines by credit card! It is utter, totally nonsensical. The credit card *enables* consumerism, for heck's sake! And the idiot planners at Ikea don't appear to realise this.
The nub of your response is contained in "...on a recent trial we took about £500 a day more when we took credit cards..." This is why credit cards have been so successful. Wherever you are, whenever the time, if you have a card you can travel, buy food, stay overnight, and probably have sex (though I have never tried the latter on credit). If anything, the retailer should be paying *the customer* 70p for having the good grace to patronise his store. The day this kind of surcharge starts to become a habit among retailers will be the day when there is a massive downturn in the economy. And how long will it stay at 70p? Sooner or later, the Ikeas of this world will increase it to a quid, then £1.50, and so on. If they think they can get away with it, because of consumer apathy, they most definitely will!
No it's not. Because that was an increase in turnover of £500, not an increase in profit. The charges levied by the card company ate into the profit to such an extent that the increase in trade the card geenrated was not as attractive as it seems.
Also, being brutally honest about it, people who habitually use cards for payment do not seem to think deeply about costs. So if we increase prices for card users by 70p/transaction the vast majority do not notice, nor complain, so sales volume is unaffected.
Those are advantages to the consumer, not to the retailer. The retailer has to pay for the convenience of the consumer and those consumers who do not use credit cards have to subsidise credit card users. I don't consider that just. I think that the credit card companies should levy all charges to the credit card user so that the consumer can see the real costs of the credit card operation. Since the card companies refuse to do that, then the retailer should make the charge.
Bwhahahahahahahahahahahahahahaahahaha
Oh dear, just like retailers had to put up with from credit card companies. The card companies needed retaielrs to accept their products so initially they offered card facilities cheap or free. Then when enough retailers had been recruited they wound up the costs. You didn't see this in progress so were unaware that it was happening. Now that the retailers take action to pass those charges on to you, you dont' like it.
If you don't like it, don't use that retailer or don't use a credit card. Debit cards are accepted without extra charges as are cheques, as indeed is good old fashioned money.
Okay, I'm into Aesop's Fables mode now, and would recommend you check out the following parable: If you make things easier for people to consume, they will consume more. If you make it more difficult, they will consume less. By the way, this is one of my own, as Aesop was on holiday.
Banks don't exactly make it cost-effective to leave sums of money in the backing accounts for debit cards large enough to cover the purchases that many people may normally use credit cards for. I *never* borrow on credit, but keeping a "float" of a grand or so in my current account would just be stupid. If they offered a daily sweeping facility from savings to current accounts to cover purchases that day, I would be more on your side.
[Mind you, I had to wait a while in the newsagents at my local station the other day, to buy a paper for 50p, because some student-type in front was insistent on using a debit card to pay his £1.49 bill. One freaking pound and forty-nine pence...]
John, you sound like the kind of person who shares my view of the world. Steve and others seem keen to get us to stick large amounts of cash in an account or in our wallets just so that we can buy stuff when a credit card that one pays off each month is a far easier way of buying goods. I pay for low-value items using cash, and anything else with a building society cheque or a credit card.
The question that you have so far failed to answer is who do you think should be paying for those few weeks of free credit that you get when paying with a credit card? Whichever way you look at it there is a cost associated with that, and someone has to pay for it. You clearly don't think you should pay, so why should do you think someone else should pay for you to get the benefit of free credit?
I think this whole issue gets distorted by the way the credit card companies make charge to the retailers. Perhaps it should be done on a more realistic basis so that its clearer what's going on. They should reduce the commission payable by the retailer to the same level as that charged for debit cards and the like, and then the customer should be charged interest from the day he made his purchase.
Then what are you doing complaining about IKEA making it more difficult to use credit cards if you're not earning anything to pay it back with? Is this the real reason you're so against using a debit card? It looks like IKEA are doing you a favour by making it harder to get yourself even deeper into a debt that you can't repay.
No, I don't even have a mortgage, let alone any debt. Ikea are not doing this to make it more difficult to use credit cards, but because they can fleece a captive "audience" which, they estimate, will be too apathetic to complain. And it looks like they are correct! So, not only are they *not* doing anything to dissuade consumers from increasing their debts, they are charging 'em 70p for the pleasure! Good game, good game! Didn't they do well!
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