Are the credit card charges really as big of an issue as people claim?
I ask because when I freelanced, it was just the cost of doing business. I wrote it all off as expense and in some cases just baked it into the prices. I never really lost as a service provider. Couldnāt everyone just bake the fees into the cost of the thing they are selling?
Canāt even bake in taxes on sticker prices in storesā¦
The person not including it in their cost can sell for cheaper. That's a competitive advantage. Or if they don't sell for cheaper that's 3-5% higher margins.
Just mark up by desired margin + feeā¦
Then it's more expensive than the person who doesn't have to markup.
Compete on quality and branding? Which industry is so competitive where a 3% difference will put you out of business?
Its like you're promoting running a race with a bullet in the foot. Why would you want to do that?
There are a lot of industries where this is the case. Most physical retail stores for example.
A 3% charge from the credit card company is just as bad as 3% inflation. If the charge can be avoided it would be in the interest of the merchant and the customer to do so.
Also it might make sense to you because you are thinking of freelancers, but think of the exact same product, same label could be sold to you at 3-5% less.
It kind of balances out anyway. You charge me more, I charge them more š¤·āāļø
And I buy the same product from the place that sells me cheaper, so you lose out š¤·āāļø
This might apply to groceries or something but donāt see how it could make much difference in other areas. Most places donāt accept cash anyway. So thereās really no competitive advantage.
Yes.
Imagine an online marketplace with 10% take rate.
Merchant fees at 3%. It's 30% of gross profit.
They ARE a big deal, because that is the fiat system...
A write-off!?
No, a parasitic component of the evil, destructive mechanism perpetually bleeding the world dry. Rent seeking, non-productive behavior....
Self custodial bitcoin fixes this...
Read Markets & Hierarchies by Williamson. The answer is YES.
Could they ā yes, but _should_ they? Why?
On one hand I accept it as the cost of doing business. That said, in January each year I calculate what I paid in fees and it pisses me off.
But I wouldnāt have a business that mines fiat if I couldnāt easily accept cards and other payment types. And if Iām honest if I paid five figures in fees rather than four itās been a good year.
Related: I think bitcoiners are getting wrong re: merchant adoption generally, and Squares POS specifically, is chargebacks.
Some very smart people - including the good folks at nostr:nprofile1qqsv8fus0eeygg3k4mzlv9y5j9x5jka6pzvyfgkcyrug38hmutnfd5spz3mhxue69uhhyetvv9ujuerpd46hxtnfduq3vamnwvaz7tmjv4kxz7fwwpexjmtpdshxuet5u34wfv - will share the stats about āfriendly fraudā and how itās a huge issues. But the brewery owner or coffee shop owner Iād like to see accept bitcoin donāt have that problem on a $30 bar tab or $10 coffee/burrito order.
If the people I serve want a refund, or initiate a refund, I want them to get it. The āno chargebacksā as a feature for merchants to accept bitcoin via Square or a nostr:nprofile1qqsv8fus0eeygg3k4mzlv9y5j9x5jka6pzvyfgkcyrug38hmutnfd5spz3mhxue69uhhyetvv9ujuerpd46hxtnfduq3vamnwvaz7tmjv4kxz7fwwpexjmtpdshxuet5u34wfv invoice is something Iām not convinced of. The flip side is itās easy to refund someone on chain or via lightening.
But all of that said, I think a brewery owner can have a nice stack if they accept BTC and can get some bitcoiners to do their meetups at the brewery.
Regarding chargebacks, I think if it had never been so easy for someone to fraudulently make use of someone else's credit card account, chargebacks would never have been a thing in the first place. As it was, credit card companies had not choice but to offer that feature just to get anyone to be willing to use their fragile, easily exploitable system.
Conversely, I think "no chargebacks" vis a vis "not your keys; not your bitcoin" just makes intuitive sense... at least as much as it does with regard to cash transactions.
That being said, if/when a merchant wants to provide a refund, provide a refund.
The average business makes 3% net revenue. So if all your income is from credit cards, you can double your net, theoretically.
Are sales taxes really as big of an issue as people claim? Why not double them? Who cares, amirite?
Short answer yes. In some countries you can even deduct the fees from your business tax. It's a running expense.
Important factors:
The price elasticity of demand
The impact of the fee on profit margin
How important these factors will feel varies by product, but there is no avoiding the impact.
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I'm not sure how big of an issue that it is people are claiming. It's like a 3-4% issue.
If you're writing off 3-4% of what you charge for your labor, you probably don't consider it a big deal.
If you're baking 3-4% into prices of items you sell at brick-and mortar retail - because that business doesn't have high enough margins to just write it off, then the competitor next door who sells the same items - but doesn't charge 3-4% for non credit card transactions - is, all else being equal, more attractive to those customers. I guess whether or not that counts as a big issue would depend on the customer. Personally, especially for items that I'm routinely purchasing over and over, I tend to notice where prices are higher or lower... I don't bother calculating how much higher or lower, I just choose lower (again, all else being equal).
When we were considering opening our shop, this seemed a no brainer. Other shop owners were complaining about how high the fees were but not passing them on to the customers.
We decided to pass on the cost of credit card fees to the customer from day one.
The issue is the monopoly. You can pay weekly to your local mobster for protection and it doesn't mean you are happy with it.
Back when systems were not online, there was risk and the fees kinda made sense - insurance. Nowadays, most systems are online, making risk way lower while fees are not.
No worries, alternatives are already a thing and their hand will be forced.
