As you may recall from reading the most recent annual report, credit card fees are an increasingly large expense for your Co-op. Total fees paid for processing credit and debit cards in 2011 is expected to be in excess of $1 million.
Members who attended the annual meeting had access to a presentation on how credit cards work, the cost differences to retailers among card types, and how and what we can all do to minimize credit card costs to your Co-op. You would likely be surprised at the number of low-dollar transactions that are paid for by credit card in our stores. It is not unusual for people to pay for a cup of coffee, a bagel, a single soda, or even a piece of fruit with a credit card! The fees on such a transaction are astronomical compared to the cost and profit margin on the product; we would save money by giving the customer the product rather than processing the transaction via a credit or debit card.
In order to minimize our processing fees as much as possible, we have decided to implement two changes to
our credit and debit card policies to be effective beginning December 1, 2011.
First, we will be implementing a minimum purchase requirement of $5 for all credit and debit card transactions.
Until last year, when Congress passed legislation permitting minimums, credit card companies did not allow such a restriction in their contract with retailers. Although the new law allows retailers to place up to a $10 minimum on credit and debit card purchases, we feel that $5 is an appropriate level for Co-op shoppers.
Second, we will be lowering the cash given back when using a debit card to a maximum of $25 over the purchase amount.
Today, the amount varies by location, but can be up to $100 at our larger stores. While not wanting to discontinue this convenient service altogether, we do want to better control our costs, and the difference we pay in fees between $25 and $100 cash back is significant.
We are not making these changes to inconvenience our members. To the contrary, they are being made to serve you more prudently. The less we pay in processing fees, the more will be left over at the end of the year—more for future investment in our facilities and more for patronage refunds.
Our stores still accept cash, and there is no lower limit to the amount that you can put on your store charge account. If you find yourself in need of more than $25 in cash, all of our stores are located next to financial institutions with ATMs. Should you have any questions, please feel free to contact our Finance Director, Tony Alongi, at 603-640-6505 or send him an email at email@example.com.