By March Twisdale
As we step into 2024, I think we can agree on one thing. Our interconnected lives are directly impacted by individual choices, including our habits and decisions as consumers. Everyone can agree that options are good for customers, and what’s good for customers is good for business. This includes payment options. Indeed, it’s our local business owners who are quick to remind me that there are dozens of reasons why a person may use a debit card yesterday, a Visa card today, Venmo tomorrow, and cash on Friday! Every single business owner I have spoken with has been 100% in agreement on this point.
Yet, our consumer choices do have consequences. It’s the holidays, right? Family and friends come to visit, and who doesn’t want to meet up at their favorite café? If that family makes eight individual purchases using plastic, they will incur $7 to $10 in transaction fees. A single, group purchase using plastic will incur $3 to $6 in transaction fees, while a family spending cash will result in $0 in transaction fees. Meaning, 20 families paying with plastic (or cash) can be the difference between scheduling an extra barista to work an eight-hour shift – or not.
Here’s the rub. At the café, because the transaction fees are hidden from view, this family has no awareness of the divot they’ve created in the café owner’s profit margin. Now, consider how you feel when you’re charged $0.08 for a paper bag at the grocery store? Do you hem and haw, trying to decide if you want your groceries single- or double-bagged? If you do, don’t feel bad. Customers are always cost-conscious. It’s our responsibility to be careful about how we spend our money. We all want to avoid spending money unnecessarily, and we also want our local business owners to do the same. That drives prices down for everyone, right?
This is where things get beautiful. We, as consumers, have a direct ability to influence the cost of doing business by, (1) shopping locally (no matter how you pay), and (2) choosing to use cash, when possible.
The goal, therefore, should not be to hide transaction fees from view. Who wants to accept endless Bank Taxes as our new normal? This is what will happen if we quietly embed transaction fees into the cost of goods and services. Unlike other business expenses, like overhead and employee payroll, these fees can be minimized and avoided by aware and motivated customers. Just as we have a choice to bring our own bags (or pay for new ones), we also want the choice to create or prevent transaction fees.
The future is fragile, and the importance of our economic environment, business ecology, and commerce sustainability cannot be overstated. For all Island businesses, the surge in transaction fees over the past decade has been worrisome, but most owners fear bringing up the conversation will be off-putting. So, they don’t say anything. The truth, however, is that profit margins are tighter than most realize, and as a result, some of our beloved local businesses have felt it necessary to pass transaction fees back to the customer. Meaning, if you pay cash, your bill will be slightly less than if you pay with plastic.
My goal in writing this article is to help Island businesses by increasing consumer awareness. I love our various centers of commerce and the beautiful communal gathering spaces and experiences they create. And, I invite everyone to make a Community New Year’s Resolution!
If paying plastic, try to group purchases together. If your favorite local business decides to pass transaction fees back to customers paying with plastic, please give them grace. This is likely a true economic necessity. And, whenever possible, love up your local ATM and keep Vashon money on the Island by paying with cash.
