The Observation Deck

I would love to support more family and small business here in Lakewood, but here's my problem…I rarely carry cash.

I prefer to put everything on my credit card and/or debit card where I earn cashback or points. Unfortunately a lot of local businesses don't take credit cards. Less and less people around my age use cash, it's just not as convenient and why would you use it when you can get rewarded for using a debit card?

It seems that alot of local places may be losing out on business from young professionals like myself simply because they won't allow us to use the payment method of our choice.

Now this isn't a slam on them, I understand there are costs to accepting plastic. But, understanding that younger generations are more and more moving towards a "cashless" society, what can be done to encourage local Lakewood businesses to be more accepting of credit/debit cards. What can be done to help them with the costs of doing so?

Beverage Square recently stopped accepting credit cards altogether. Someone reported them to the credit card companies for enforcing a minimum purchase, which is a violation of the card's merchant agreement.

I agree Bryan. I think it can be financial suicide for a business to not accept credit cards. And some retail stores don't accept checks!!! I rarely carry cash too, more because I spend it too fast!

This won't solve all your problems, but LakewoodAlive and Main Street Lakewood are launching a "buy local" program. On November 30th, the night of the Light Up Lakewood holiday lighting event on the Lakewood Hospital green, we will start selling Certifichecks. Certifichecks are gift certificates that will be redeemable at any registered Lakewood merchant. They function like cashier's checks in that that can be deposited directly into the merchants' accounts.....there are no service fees.

That is the issue for some smaller businesses - credit card service fees. We considered going with a swipeable gift card, but again, some of the smaller businesses do not have the necessary up to date technology to make it work.

FutureHeights sells Certifichecks and has enjoyed considerable success. This year they expect to sell over $9,000 worth of Certifichecks redeemable only at Cleveland Hts. merchants. They make ideal gifts for teachers, coaches, service providers - so plan accordingly!

This is not a fundraiser. Lakewood Community Progress Inc and LakewoodAlive are covering startup and administrative costs as a community service. Stay tuned for details in the coming months.

Mary Anne

This is such a logical program. It will definitely be an asset to local businesses.

Thanks Mary Anne, it's an interesting idea. However, I don't think it addresses my concern with regard to credit cards. To me these certificates about the same as carrying cash.

It doesn't solve the longer-term issue regarding local businesses modernizing their payment acceptance standards. I'm sure the certificates will serve some segment of the population, but it doesn't make it any easier for me to shop in Lakewood.

Bryan-

The small shops can't afford the high processing fees and the problems with fraud. Bad cards, bad checks, bad debt.

I understand your dilemma (and Justine's). We usually get cash before we go to a small shop.

It isn't about modernizing, it's about staying afloat.

Credit card processing fees for a small merchant can be high. Unless you are processing about $1 mil a year in credit cards transactions the fees and % can hurt the bottom line. On top of that, banks and credit card processing companies want you to guarantee a certain a volume each year (sometimes). If you have low margins then offering credit cards as a method of payment can cut into the bottom line...

I'll give you my perspective on this. I would rather take a smaller profit rather than chase away business. The catch 22 is you need volume to offset some costs but until you get the volume you are operating at a smaller margin. I guess that the individual business owners have to make that decision for themselves. I can tell you that in the past 5 months having the doors open at the hardware store I have had no less that 10 companies wanting to "save me money on my processing" with out having any idea what my current rates are. In order for me to obtain these better rates all I have to do is provide them with a current processing statement. This is time consuming and very difficult to find the "savings". My solution has been to inform them that when I play poker I don't show my cards to the other players before they bet, then I ask them submit an offer to me for processing. So far 0 for 10 requests. This could be the reason that businesses don't accept credit cards, seems to be a sharks industry. My processing was set up by a gentleman who explained everything to me and also waived ALL the charges and start up costs that put most people behind right from the start. The equipment acquisition costs are the far the most costly and also the most profitable to the processor. A little knowledge goes a long way in this area. Caveat Emptor !

Glenn, you make a great point. You would probably lose a portion of you customer base by not taking credit cards. It would be interesting to analyze your average sale vs a beverage stores average sale. (inventory turnover, margins, terms and etc). I know that most beverage stores do take credit cards but they must do a grrrreat volume to justify it. (or they must not have to answer to a CFO )

I've taken cards for $1.00 and $500.00 sales, both sales mean the same to me in the big picture. I think when your primary focus stops being on the business at hand people will sense that. Life is very hurried these days and having the time and forsight to always have cash is a luxury, most people take the card in their purse/wallet for granted, as a retailer we must conform to the needs of the consumers not the other way. One more bit of insite the younger the person the faster the debit/credit card comes out, the older people still write checks and USE THE REGISTER. Banks must be making a killing on overdraft fees !

I know how much breakfast is going to cost.

I NEVER know how much the bill at Lakewood Hardware is going to be and my DH has to live with a wife with ADD and "ooh shiny!" syndrome.

Best to bring the plastic.

I'm going to bed....Got to get up early and start polishing someting !!!

dl meckes wrote:Bryan-

The small shops can't afford the high processing fees and the problems with fraud. Bad cards, bad checks, bad debt.

I understand your dilemma (and Justine's). We usually get cash before we go to a small shop.

It isn't about modernizing, it's about staying afloat.

I completely get that dl, there are definitely issues with accepting credit cards. I just wonder if there are creative ways to make it easier or less expensive for them to accept credit cards. For example, could a group of merchants get together and negotiate lower rates, etc as group?

I get the fact that if I know I'm going to go to one of these places, I should stop and get cash now. The problem is that this then destroys any spontaneous "ooh I want to visit that store" moments.

Statistics show that we are moving farther and farther towards a cashless society. I'm just wondering if there's a way to help make Lakewood's small business have an easier time adjusting?

I've always wanted to visit Honey's Gourmet, but like Bryan I never carry cash. I guess now I missed my chance since someone said they closed up! If a store doesn't accept cards, I don't go. It's all I carry.