It's amazing what this industry does and who really pays the bill. If you are a business owner that has a merchant account, then it's you. Sorry to break the bad news. But let me give you an example.
Rewards Cards.
Let's say a customer with a Delta Sky Miles card comes in to your shop. Yay, money! Actually, it's less money than you think. You see Mr. Customer comes in and uses his Sky Miles card and makes some purchases. Well, because he used that card, he just got a bonus. Well bonuses ain't free my friend. So who paid the bill? Well duh, it MUST have been Delta. After all, it was a Delta Sky Miles card, right?
Wrong, wrong, wrong.
Your business paid it. The customer got the sky miles, Delta got the glory, and you got a sale, minus your credit card percentage AND minus the rewards card percentage that was used to pay the customer (which was at the time of this writing which was 0.3%). That's not so bad... is it?
Of course it's bad. It's more and it's way, way more. If you were a retail shop and you had a good rate of let's say 1.76% then you just paid 2.06% so Delta, or whomever, could reward their card holders with your profits. That's what it really comes down to is profit sharing, they just do it with other people's money. After all Tom Sawyer only got everyone to do his chores by convincing them it was fun. If he saw this ring, he would be so proud.
Here's the worst of it: There is nothing that you can do. This article is merely an eye-opener. You must be aware of the problem. However, one's business cannot refuse a credit card or they can possibly get delisted. After all, why do you think Discover cost what it did? They would give rewards to their customers by charging the businesses a premium. Unfortunately it's our society driving the sales which hurt the companies. They want rewards, so you foot the bill.
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