What To Do About Swipe Fees?

Merchants to survive are always looking for ways to cut costs.  Some costs like healthcare rise exponentially and you need more business to make your monthly nut. When freight rates went from a fixed cost to freight plus surcharge, most tried to eliminate the impact without raising prices.  Many passed the direct cost on to their customers, but gave a bigger discount on merchandise.

The Wall Street Journal has an article about another cost that really hurts retailers who take credit or debit cards.  Banks charge an interest rate that is figured on the sale price and those fees have doubled  since 1991.




So, for example, in 1991 if you had $500,000 in retail sales and 90% were on a card, the banks would charge $5,625 at 1.125%. Eighteen years later, you are doing $1,000,000 the banks might charge 2.25% or even 3.25%. Your bank fees may be $20,250 to $29,250. That's a big chunk of money that could have gone to pay the lights or rent or healthcare or another employee.

What's a retailer to do? Some retailers experiment with adding a surcharge for cards or like some gasoline stations, giving a discount for cash. Some wish banks would charge a flat fee for running a card, but you know how that will go over with banks. Whatever you do, experts advise being open about your card policy.

"Financial reform legislation passed in 2010 offered some relief to merchants who have been struggling with rising swipe fees. That legislation allowed merchants to set a $10 minimum on credit-card purchases. It also reduced swipe fees on debit card transactions but it didn't address swipe fees for credit cards."

Hat tip to Home Furnishings Business.

From the Retail Floor: Home Accents Today Retailer Roundtable

Gift + Home:

From the Retail Floor: Home Accents Today Retailer Roundtable

11:00 AM - 12:00 PM

Building C-428

Join Jenny Heinzen York, editor in chief of Home Accents Today, as she takes an in-depth look at new data fresh from the retail floor. This exclusive research about store operations will come to life with the help of a panel of retailers who will weigh in on what’s happening on their own sales floors.

I've been asked to participate in the panel discussion in Las Vegas at World Market by Jenny Heinzen York, editor in chief of Home Accents Today.  If you are in the city, join us at 11:00 AM on August 2nd.

Internet Sales Set to Grow

Internet sales have been flat for the last couple of years and that's not bad because retail sales for most of us have been down substantially. Now, a just released new study from the US Census Bureau’s is estimating online sales to grow this year by 12.7%! Yowsers, that's good news. We all hope that brick and mortar stores do half as well. Here's the estimate for the years 2010 through 2014:



If you are a retailer you may be interested to know that online buyers have been trained well the last few years.

“During the recession, online consumers honed their Web research skills, searching for coupons, comparing prices and finding just the right product to fill a particular need. It appears these lessons are staying with them even as their personal finances begin to improve.”

That means that your clients and potential customers are more educated and street smart. Not only are they doing research on the web, but they are posting reviews of you and your shop. That also means that you need to be found online and you need to share what you know to achieve credibility in their eyes.

Here's how it worked for us. Just the other day a couple from Chile visited our store and when asked how they found us said, "Online!"

Bev & Mike
Landfair Furniture + Design gallery
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