Credit Cards and Minimum Charges

[MaachaQ]

I work at best buy and our manager's were trying to talk about saving best buy money. They told us every time someone uses a visa card best buy has to pay something like 12-16$ in charges, this includes when employees buy a drink, which i do pretty much every day i work, and so does everyone else.

Our managers also told us that best buy payed something around 12mil in credit card charges on employee drink purchases alone, company wide. which, if true, is pretty awesome imo.

I really don't think that's true...

Retail companies, which sell merchandise in small quantities directly to consumers, often receive a significant portion of their revenue through credit card sales. Some credit card receipts, specifically those involving credit cards issued by banks, are deposited along with cash and checks made payable to the company. The company receives cash for these credit card sales immediately. Because banks that issue credit cards to customers handle billing, collections, and related expenses, they usually charge companies between 2% and 5% of the sales price. This fee is deducted when the receipts are deposited in the company's bank account, so these credit card receipts are slightly more complicated to record than other types of cash deposits. If a company deposits credit card receipts totaling $1,000 and the fee is 3%, the company makes a compound entry that debits cash for $970, debits credit card expense for $30 (3% of $1,000), and credits sales for $1,000.

http://www.cliffsnotes.com/study_gui...eId-21055.html

Merchants that accept credit cards must pay interchange fees and discount fees on all credit-card transactions.[5][6] In some cases merchants are barred by their credit agreements from passing these fees directly to credit card customers, or from setting a minimum transaction amount.[7] The result, at least in the United States, is that merchants may charge all customers (including those who do not use credit cards) higher prices to cover the fees on credit card transactions.[6] In the United States in 2008 credit card companies collected a total of $48 billion in interchange fees, or an average of $427 per family, with an average fee rate of about 2% per transaction.[6]

Costs to merchants

Merchants are charged several fees for the privilege of accepting credit cards. The merchant is usually charged a commission of around 1 to 3 per-cent of the value of each transaction paid for by credit card. The merchant may also pay a variable charge, called an interchange rate, for each transaction.[5] In some instances of very low-value transactions, use of credit cards will significantly reduce the profit margin or cause the merchant to lose money on the transaction. Merchants must accept these transactions as part of their costs to retain the right to accept credit card transactions. Merchants with very low average transaction prices or very high average transaction prices are more averse to accepting credit cards. In some cases merchants may charge users a "credit card supplement", either a fixed amount or a percentage, for payment by credit card.[8] This practice is prohibited by the credit card contracts in the United States, although the contracts allow the merchants to give discounts for cash payment.

http://en.wikipedia.org/wiki/Credit_card

[Senji]

Ill confirm that visa and mastercard charge small businesses in NY 3%.