Author Topic: Aussies resent being 'forced' to top up coffee spend to meet $10 card minimum  (Read 4571 times)

mustachepungoeshere

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http://www.news.com.au/finance/money/costs/mastercard-wants-to-end-the-10-minimum/news-story/3481919e5611e57a67ae793b64bfadce

Quote
In fact, the amount of money wasted in a year by the typical Aussie shopper forced to purchase an extra item at the checkout to make up a “minimum” card limit could pay for a trip to Bali, MasterCard says.

As part of its “Zero Minimum” campaign, the company has interviewed young professionals and busy mums who have calculated how much they are wasting by falling into the “minimum spend trap”. A twice-weekly purchase with a $6 top-up on a $4 coffee works out to $624 a year.

While the minimum spend is probably bullshit, no-one is forcing you to buy coffee twice a week and no-one is forcing you to use a credit card.

It's perfect that they used Bali as an example. The people who are overpaying for coffee and complaining about being broke as a result are absolutely the people who go to Bali on holiday. (And complain if the experience differs in any way from home.)

dycker1978

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Of course mastercard thinks there should be non minimum.  They are losing out on the transaction fees then

syednaeemul

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Ahh I used to be one of these folk, though my solution was to just not shop at cash-only or min spend places.

marty998

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So much waste! Who are these people with so much free money to throw away?

Good for business though, gets people spending more...

MrsPete

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I've been teaching fallacies in logic this week.  I might have to work this into my examples. 

With This Herring

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What bothers me is that the CC companies are putting up these small shopkeepers as the bad guys for having minimum spends.  Look at those fees!

Quote from: Fees List in Article
In general, there are five kinds of fees banks charge to process transactions:

• One-off fees including terminal establishment fee, closure fee and on-site installation.

• Ongoing fees like terminal rental, access fee and annual fee.

• A service fee on credit card transactions, usually a percentage (0.5-3 per cent).

• Banks may also impose a merchant service fee on credit card transactions.

A basic fee per Eftpos transaction, which tends to be just 10c to 50c.

While there is “still a cost of the transaction” because “somebody’s got to provide the service”, Mr Duursma said the merchant service fee, which made up the biggest chunk, had nearly halved in recent times.

One commenter sums it up well:
Quote from: Dermot of Coonamble
Got to love the way this guy just dismisses the eftpos charges as insignificant; 10 - 50cents. When you consider the bank charges for providing eftpos run into hundreds and then there is the per use charge. 10-50 cents (more like 30-50 now) isn't much on a sale over $10 but on a $2.50 sale it represents more than 10%. Many products are lucky to even have a 10% margin, so dismissing the per use charge as insignificant is disingenuous. If Mastercard really wants to see the limit removed then do away with the per use charge - simple. It's not as if they don't make enough on the user; both consumer and retailer. By the way, while we have their attention - What's with using cheap chips in their cards that are failing after only a few weeks. Surely they can afford to spend a little extra and put decent quality chips in the cards.

I would love to know what those per-transaction fees total for a small transaction.  And what if you have someone who comes in and buys a 75-cent pack of gum with a card?  Does the shopkeeper have to eat the loss?

What the small shopkeepers might be able to do is start using gift cards.  Even paper gift certificates could be printed cheaply and mean that no processing fee or special equipment would be needed.
"We have a minimum spend of $20, so you could just buy our $20 gift card and use it to pay for your next few coffees here." 
"Joe, every day you come in and order a coffee for $2.75.  I'll ring up all 10 coffees for the next two weeks right now for $27.50, and you can come get them fresh every morning.  We'll keep the list of coffees we owe you here behind the counter."

MgoSam

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This an outrage, this is. They should take this all the way to the Prime Minister!

https://www.youtube.com/watch?v=HV_O3BA5e28

Prairie Stash

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Australians have minimum purchases still? That seems pretty antiquated. I'd feel resentful having to do things the 20th century way too.

HappierAtHome

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Australians have minimum purchases still? That seems pretty antiquated. I'd feel resentful having to do things the 20th century way too.

We're several decades behind the rest of the civilised world in a few ways.

But on the other hand: koalas!

Anatidae V

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Australians have minimum purchases still? That seems pretty antiquated. I'd feel resentful having to do things the 20th century way too.

We're several decades behind the rest of the civilised world in a few ways.

But on the other hand: koalas!
but, we dont have koalas. Only over east...

HappierAtHome

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Australians have minimum purchases still? That seems pretty antiquated. I'd feel resentful having to do things the 20th century way too.

We're several decades behind the rest of the civilised world in a few ways.

But on the other hand: koalas!
but, we dont have koalas. Only over east...

Shhh. They don't need to know that. And remember: don't mention the drop bears!

marty998

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Australians have minimum purchases still? That seems pretty antiquated. I'd feel resentful having to do things the 20th century way too.

We're several decades behind the rest of the civilised world in a few ways.

But on the other hand: koalas!
but, we dont have koalas. Only over east...

Shhh. They don't need to know that. And remember: don't mention the drop bears!

No. Perth is several decades behind the rest of the civilised world. The East Coast fits into the 21st century just fine :D

(We also have cute little kangaroos!)

pancakes

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For credit cards the merchant fee is a % of the transaction cost so it makes no difference to the store if the purchase is more or less than a certain amount except that they want customers to spend more.

There are costs to a business for cash transactions too. More money goes missing via cash, you have to pay your employees to count it and take it to the bank, etc.

I just don't buy from places with a minimum for cards if I won't meet the minimum with what I intend to buy.


HappierAtHome

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Australians have minimum purchases still? That seems pretty antiquated. I'd feel resentful having to do things the 20th century way too.

We're several decades behind the rest of the civilised world in a few ways.

But on the other hand: koalas!
but, we dont have koalas. Only over east...

Shhh. They don't need to know that. And remember: don't mention the drop bears!

No. Perth is several decades behind the rest of the civilised world. The East Coast fits into the 21st century just fine :D

(We also have cute little kangaroos!)

Oh, so you guys have marriage equality and indigenous recognition in the Constitution? No...?

We have quokkas!! And numbats. We win.

MgoSam

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For credit cards the merchant fee is a % of the transaction cost so it makes no difference to the store if the purchase is more or less than a certain amount except that they want customers to spend more.

There are costs to a business for cash transactions too. More money goes missing via cash, you have to pay your employees to count it and take it to the bank, etc.

I just don't buy from places with a minimum for cards if I won't meet the minimum with what I intend to buy.

It depends. True there is a % charge, but there's also a fixed cost in addition to this. I don't remember what we pay, but we have a higher fixed cost per transaction because we don't run a credit card very often (on average twice per business day), whereas a retail outlet would want the lowest fixed charge because they are running their card way more often. It's only a few cents, but when you're running a business it can really add up. Here in the US most companies waive them because it is more important to get customers in and to get paid (plus you're right, cash can lead to shrinkage), and because (my theory) customers are willing to pay far more for something when paying by plastic. The degree of separation away from hard currency desensitizes people away from how much they are spending and I think restaurants have learned that they can charge $10 for a $9 dish without losing business. For them the added revenue more than makes up for the added processing expense.

No Name Guy

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It's called cash people.  Cash....C...A...S...H.  You know, as in physical money. 

Minimum spend?  What's the smallest denomination in your local currency?  Done.

Small purchases made via electronic payments are stupid.

It's also hard to overdraft and get slapped with the fees when using cash as well.  What, no cash in your pocket?  Yeah, you're out of money.  Self limiting.

Oh, and WTF of buying coffee all the time....mumble, mumble, mumble....latte factor......mumble, mumble, mumble.


mustachepungoeshere

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We also have cute little kangaroos!

Cute little kangaroos that are into brawling, drowning dogs, and necrophilia?

http://mobile.abc.net.au/news/2016-01-14/grieving-kangaroo-actually-sexually-aroused-expert-says/7088654

nnls

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No. Perth is several decades behind the rest of the civilised world. The East Coast fits into the 21st century just fine :D

(We also have cute little kangaroos!)

Oh, so you guys have marriage equality and indigenous recognition in the Constitution? No...?

We have quokkas!! And numbats. We win.

quokkas trump everything. Also we have better beaches

marty998

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No. Perth is several decades behind the rest of the civilised world. The East Coast fits into the 21st century just fine :D

(We also have cute little kangaroos!)

Oh, so you guys have marriage equality and indigenous recognition in the Constitution? No...?

We have quokkas!! And numbats. We win.

quokkas trump everything. Also we have better beaches

Ok. I know when I'm beat. Quokkas are really cute.

joleran

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It's called cash people.  Cash....C...A...S...H.  You know, as in physical money. 

Minimum spend?  What's the smallest denomination in your local currency?  Done.

Small purchases made via electronic payments are stupid.

It's also hard to overdraft and get slapped with the fees when using cash as well.  What, no cash in your pocket?  Yeah, you're out of money.  Self limiting.

Using cash is dumb money though.  Harder to track your own spending, harder to dispute when problems arise, harder to manage day-to-day.  More expensive than using credit cards due to cash back/travel rewards (when there's no extra fee/minimum spend).

If I have $20 in my pocket, it's not as "real" to me as my credit card spending, which I track extensively and with no effort on my part.  I usually don't really know where I spend my cash (the purposely tiny, tiny amount).

With This Herring

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It's called cash people.  Cash....C...A...S...H.  You know, as in physical money. 

Minimum spend?  What's the smallest denomination in your local currency?  Done.

Small purchases made via electronic payments are stupid.

It's also hard to overdraft and get slapped with the fees when using cash as well.  What, no cash in your pocket?  Yeah, you're out of money.  Self limiting.

Using cash is dumb money though.  Harder to track your own spending, harder to dispute when problems arise, harder to manage day-to-day.  More expensive than using credit cards due to cash back/travel rewards (when there's no extra fee/minimum spend).

If I have $20 in my pocket, it's not as "real" to me as my credit card spending, which I track extensively and with no effort on my part.  I usually don't really know where I spend my cash (the purposely tiny, tiny amount).

With cash, you can get any applicable "pay with cash" discounts because the merchant is saved the processing fee.  There are some small merchants that I pay with cash even if they accept credit cards without limits because I get less in rewards than they pay in fees.  Cash is also better for tips and small bribes.

When I spend cash, I write it down.  Or, if you have one, you can make a note in your fancy phone.

marty998

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It's called cash people.  Cash....C...A...S...H.  You know, as in physical money. 

Minimum spend?  What's the smallest denomination in your local currency?  Done.

Small purchases made via electronic payments are stupid.

It's also hard to overdraft and get slapped with the fees when using cash as well.  What, no cash in your pocket?  Yeah, you're out of money.  Self limiting.

Using cash is dumb money though.  Harder to track your own spending, harder to dispute when problems arise, harder to manage day-to-day.  More expensive than using credit cards due to cash back/travel rewards (when there's no extra fee/minimum spend).

If I have $20 in my pocket, it's not as "real" to me as my credit card spending, which I track extensively and with no effort on my part.  I usually don't really know where I spend my cash (the purposely tiny, tiny amount).

With cash, you can get any applicable "pay with cash" discounts because the merchant is saved the processing fee.  There are some small merchants that I pay with cash even if they accept credit cards without limits because I get less in rewards than they pay in fees.  Cash is also better for tips and small bribes.

When I spend cash, I write it down.  Or, if you have one, you can make a note in your fancy phone.

They may also be dodging their GST and income tax liabilities by taking cash only.

Always insist on a receipt. If they are dodging tax it means the government has to raise more from you and me.

With This Herring

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It's called cash people.  Cash....C...A...S...H.  You know, as in physical money. 

Minimum spend?  What's the smallest denomination in your local currency?  Done.

Small purchases made via electronic payments are stupid.

It's also hard to overdraft and get slapped with the fees when using cash as well.  What, no cash in your pocket?  Yeah, you're out of money.  Self limiting.

Using cash is dumb money though.  Harder to track your own spending, harder to dispute when problems arise, harder to manage day-to-day.  More expensive than using credit cards due to cash back/travel rewards (when there's no extra fee/minimum spend).

If I have $20 in my pocket, it's not as "real" to me as my credit card spending, which I track extensively and with no effort on my part.  I usually don't really know where I spend my cash (the purposely tiny, tiny amount).

With cash, you can get any applicable "pay with cash" discounts because the merchant is saved the processing fee.  There are some small merchants that I pay with cash even if they accept credit cards without limits because I get less in rewards than they pay in fees.  Cash is also better for tips and small bribes.

When I spend cash, I write it down.  Or, if you have one, you can make a note in your fancy phone.

They may also be dodging their GST and income tax liabilities by taking cash only.

Always insist on a receipt. If they are dodging tax it means the government has to raise more from you and me.

Well, the Australian government never gets taxes from me...

But I get your point. :)