[lug] Credit - was: [Letting folks pay from the web.]

[Landon Cox]

On Feb 2, 2010, at 4:26 PM, Davide Del Vento wrote:

>> Before getting too riled up about the state of credit, feeling good  
>> about
>> using cards for their rewards, and the general cost of credit for  
>> business
>> owners, you should read this NYT article:
>
> I don't know who in the heck invented this thing. It's clear that
> somebody has to pay for these "rewards", and it's clear that the cc
> company is not the one that will. In my opinion the reward cards
> should be outlawed - no brainer.
> I'm originally from Italy, and over there it's pretty common for most
> businesses to not accept credit cards at all, and the ones that do
> accept them have a "minimum" amount of 50 or even 100 euros. And this
> is without "rewards", I believe if they would introduce them, cc will
> be just dropped for cash completely. The only pain is all those coins
> (the smallest bill is 10euros, imagine that with dollars...)

The merchants are the ones paying all the freight on rewards.  Another  
cause for revocation of merchant services, besides any attempts to add  
a surcharge for card users, is requiring a minimum purchase.  So, once  
the merchant chooses to accept cards, if he plays by the card company  
merchant agreement, there's not much he can do to control how credit  
is used with and against his business.  There's no way to run an  
online business without it, so the merchant services agreement is the  
golden handcuff.  You abide by it or you are out of business and  
that's why the rewards shenanigans seem to stick so easily...the ones  
paying the tab for the rewards essentially have no choice.

Landon