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From: mark@cbosgd.UUCP (Mark Horton)
Newsgroups: net.consumers
Subject: Re: Department Store Credit Cards: Why?
Message-ID: <1071@cbosgd.UUCP>
Date: Wed, 7-Mar-84 01:01:15 EST
Article-I.D.: cbosgd.1071
Posted: Wed Mar  7 01:01:15 1984
Date-Received: Thu, 8-Mar-84 07:13:08 EST
References: <263@houxb.UUCP>
Organization: AT&T Bell Laboratories, Columbus
Lines: 23

One reason is probably the charge the store must pay to Visa or
Master Card as a service fee.  I think it's something like 3%
of the amount of the transaction.  Thus, if you pay by credit
card, the store is getting only 97% of the purchase price, but
if you pay by cash or check, they get the full price.  (Actually,
when you consider the number of bad checks, they get less than
97% on a typical check, which is why they usually discourage them.)
If they have their own credit card, they incur the costs of credit
billing, which are much lower than 3% if they are large enough to
afford the overhead of having a credit department.  Stores that accept
plastic have to raise their prices for everybody to cover this charge,
which is why the cheapest places (fast food, grocery stores, small
self serve gas stations) don't accept plastic.

Then again, you never know.  A salesman from EMC2 memory was speeding
from Toledo to Columbus to make a sales appointment with us.  He was
pulled over by an Ohio State Policeman.  Ohio has recently passed a
law where they confiscate your drivers license after a moving violation,
but since he had an out-of-state license, he couldn't confiscate it.
So the officer demanded immediate payment of the fine.  You wouldn't
expect the average person to have $50 or so cash on him.  But the
officer accepted Visa!  Had the little shoop-shoop machine right
there in the back of his patrol car.