Shops and Credit Cards - Was Re: Costco

[Guest guest]

Hi all

As the subject has come up... thought as I am a retailer I might be best to

answer this one.

CostCo I imagine do not accept credit cards due to the high servicing costs

involved.

Retailers pay for the priviledge of accepting credit cards. There are setup

fees, standard fees (for example, rental of the terminal), and of course a

Persentage of Tranction fee. So evertime a card is processed, a percentage

of the sale (or the minimum charge if the sale is only for a small amount) is

paid by the retailer to the card clearers. Debit cards also incur charges,

but they tend to be on a per transaction basis - rather than a percentage of

the sale - and therefore these are prefered by retailers selling High Ticket

items.

Cheques and Cash also cost a business to process - banks always find ways of

charging a business! So at the end of the day it boils down to cost - for a

retailer like Costco (who I presume are like Makro, as I've not been to a

Costco store), the cost of implementing credit card systems on all their

tills, and the charges involved for processing, would be quite high, and if

their profit margins on goods is not very high, then they won't take c.cards

as they would make even less profit.

Also to note, a credit card payment can be disputed - often up to 3 months

after the transaction. Fraud is also a big problem. Just because a credit

card is accepted by a machine... does not mean that the retailer will be

paid. All the machine does, is confirm that the card is not currently listed

as stolen, and that at that particular moment in time, the card holder has

sufficient credit limit to pay the amount. Its does not guarentee payment!

Thought this might be of interest to any of you who use c.cards.

Nick