Commentary, Island Businesses, Island Resilience, September 2023

How to Avoid Being Nickel and Dimed

By March Twisdale

While researching my first article about choosing cash over debit and credit cards, the Vashon Island business community showed considerable interest. I followed this up with online research, but the bulk of the data influencing my articles comes from local business owners. We, as consumers, have a brilliant opportunity to listen to and learn from our neighbors who are business owners.

After Vote Against “Bank Taxes” – Pay Cash was published this June, reader responses ran the gamut from emails to casual comments in town, as well as phone calls and well-remarked upon Facebook conversations. Clearly, Islanders care where their money goes and whose pocket it lands in.

“Banking taxes” (the fees associated with purchasing transactions using a debit or credit card) come in two types. First, there is a flat fee charged for the privilege of using your money. Second, you pay a percentage of the transaction amount.

To make sure we’re on the same page, let’s run through a familiar scenario. Five friends meet up at their favorite Vashon café. They each purchase a drink and a treat for $10, and they each use plastic to pay the bill. To simplify, we’ll assume the “point of sale” (POS) and “transaction percentage” (TP) fees of their preferred cards are identical: $0.50 POS and 2% TP. Under these conditions, the bank taxes on each person’s $10 purchase would equal $0.50 + $0.20, or 7% of the entire transaction.

That’s not such a big deal, right? Except there are five separate transactions, which means your coffee date just exported $3.50 off the Island and into the pockets of the international banking industry. If your response is to shrug, keep reading.

What is the definition of “nickeled and dimed?” According to the Cambridge Dictionary: “To damage someone or something … by taking away many small amounts of money.” Their example is to the point: “The banks nickel and dime you to death with all the little fees they charge you.”

You and I are being nickeled and dimed by a banking system designed over several decades to expertly extract money from a generally honest and trusting populace, and the very real cost to Vashon Islanders is steep.

We have about 10,800 Islanders with differing spending habits. So, I’ve come up with an average that I think is pretty close to reality. The three numbers that matter are: (1) how many transactions are conducted locally per week, (2) how much money does the average Islander spend per week, and (3) what percentage of these transactions are made with cash or plastic?

Between coffee, grocery shopping, a weekly pizza, beer with a friend, that second trip to the grocery store, new plants in the spring, holiday presents, dinner out with your spouse, grabbing lunch at the deli, pet supplies, ice cream for the little ones in summer, gasoline for both cars, an evening out with friends, whatever one might buy at the local liquor or weed store, and the weekly visit to Granny’s … the “average” number of transactions made per week is 20.

Of the several business owners on Vashon Island who shared their data with me (it’s tallied by the POS machines), all came up the same: 90% of us pay with plastic, and 10% with cash. For the sake of this article, I’m assuming this reflects an overall Island trend.

What happens when we crunch these numbers? If you make 20 transactions a week, each with a $0.50 POS, that’s $10 a week in bank taxes. Next – assuming the average islander spends $500 a week, and the TP is 2% (this percentage is lower than average) – that’s an additional $10 a week in bank taxes.

Twenty dollars a week gone. Per person. But how many people live and shop on Vashon Island? To be super-conservative, let’s assume 2,800 Islanders never shop! They’re 5 years old, or they’re 95! This leaves us with 8,000 people shopping each week – multiplied by $20.

That’s $160,000. Check my math. Hard to believe, isn’t it? Now, ask yourself: “What could Vashon Island do with $160,000 – a week?”

If we want to keep our money on our Island, circulating in our community, fueling our local economy, and serving our local needs – we need to do more than shop locally. We need to use cash.

You can make a difference today and every day! Bring your new summer habit of “shopping with cash” into the fall and winter seasons. Rekindle your relationship with our Island’s various ATM machines, and give ’em some love every time you head into town. Then, have fun painting the town green as you shop!

September 7, 2023

About Author

march March Twisdale has called Vashon Island home for nearly twenty years. A lifelong advocate of independent thought, March believes there are as many right choices as there are people in the world. She looks forward to bringing inspiring content to Vashon Loop readers, as she's done for eight years with her radio show - Prose, Poetry & Purpose. Find her on by searching "Our Thoughts Matter."