We went to a pizzeria after church on Sunday with some friends. It's a pizza buffet, so it's all you can eat for one price, paid up front. We stood in line a few minutes before getting to the cashier.
The other locations of this chain I had gone to before accepted credit cards, so I whipped my plastic out. Then the cashier informed me:
“We take cash or checks. If you need cash, there's an ATM behind you.”
Most places take credit cards because it usually results in more sales and larger purchases. This comes at a cost to the retailer, though. The merchant fees add up: 30 cents or so per transaction, plus about 2% of the total.
I can see why this particular pizzeria didn't take credit cards. The price of admission was only about $4.50 each — extra if you bought a drink with it. So our charge was under $10. The merchant fees would knock off 5% of the total. And there was really nothing else to buy once you' were in there. The only other opportunity to spend money was on video games, and they take coins.
They could have had a point of sale card swiper that took only debit transactions. But an ATM (costing a few thousand dollars) can pay for itself pretty quickly at $2 per transaction. The customers are in line and have been waiting for a while, so it's really tempting to get the cash right there.
It's a tad inconvenient for the customer who likes to pay using a credit card as much as possible. But it is probably a wise move for them to do it this way considering the nature of their business, and they're not breaking any credit card merchant account terms and conditions by only accepting credit cards for a minimum amount.
I've seen many places use this tactic; it works quite well for the business but not so well for the customer.
I'm pretty sure I would walk out of the restaurant. That's HORRIBLE customer service. Why don't they just raise their prices and step into the debit card age?
Actually, having a minimum charge requirement is against merchant account rules, though I know a lot of vendors do it. They can have their merchant account revoked.
For example, here's MasterCard's agreement. Look at section 9.12.3.
That's a little passe, but not entirely unexpected with cheapo restaurants. Go somewhere more expensive (say, a printer's), and it's shocking when they don't take plastic. Their ATM wasn't in the building though, it was out in the parking lot.
JLP, how is it HORRIBLE customer service? They found out BEFORE placing their meal, so it's not like they were suddenly forced to use the ATM. They had the choice of going somewhere else.
I agree they should start accepting credit cards, but I wouldn't call it horrible customer service.
I agree with JLP, I would be out of there. I don't think a restaurant operating today should not accept cards. At the very least they could have a minimum purchase or a small surcharge.
I wonder if the pizza place was Cici's pizza? I've been seeing commercials for them in NH but they are no where close to us at all. I remember eating there when I was growing up in TX.
Frank, good guess! You're right!
I would say not only is it horrible but sneaky customer service. Unless they have a sign that’s predominately displayed at the door of what they’re doing, they’re banking on you having invested 10 to 15 minutes wait time to suck it up and use the ATM machine. I would visit that place with cash and leave a penny tip.
The only other sneaker thing I’ve seen restaurants do is the automatic adding of a 15% or more tip when paying by credit card. This happened when a friend and I went out for lunch. I paid for it and he left the tip. Checked my credit card to find out they automatically add a 15% tip to the bill when paying by credit card. I raised hell.