Whether you tap or swipe, small businesses in San Luis Obispo say they’re paying the price of rising credit card fees, and it’s cutting into their bottom line.
On Higuera Street, Neal Stuckey and his wife own two downtown shops, Tails Pet Boutique and Battle Axe. He says the fees force business owners into a tough choice.
“Do I charge a customer a credit card surcharge fee, or do I actually just absorb that as a cost of doing business?” Stuckey said.
Credit card processing fees can add up to 5% of each sale. They’re made up of three parts: interchange fees, which go to the customer’s bank and are often higher for rewards cards or online payments; assessment fees, which are paid to card networks like Visa or Mastercard; and processor fees, which go to the payment service.
Stuckey says the impact adds up quickly.
“For every $100,000 of revenue that you take, you are basically paying somewhere between $3,000 and $5,000 in credit card fees,” he explained. “That can make a difference on either hiring staff or not, bringing in additional inventory, or just making different key decisions, maintenance, repairs.”
At his businesses, Stuckey says about 92% of sales are made with credit cards.
It’s a similar story up the street at SLO Olive. Owner Jim Helser says around 95% of transactions at his shop come through credit cards, so much so that he felt he had little choice but to pass the cost onto customers.
“I was very apprehensive. It took me three months of soul-searching to see if I really wanted to do this because I was really afraid that it would alienate my customers,” Helser said.
While he decided to add a fee for credit card purchases, he is upfront about it with shoppers.
“We let them know right at the beginning, before they are actually going to pay, that there’s a 3% added charge,” he said. “And if they want to use debit card, cash or check, there is no additional fee. So they always have an option.”
But for many small business owners, the option to not accept cards doesn’t exist. The owner of Bob Cantu’s Pizza and Sports Bar on Broad Street put it simply: “Everyone uses card now. Bottom line is you better offer it and be willing to pay the price or lose the customer.”
Stuckey says while fees may be unavoidable, customers can help small businesses by being mindful of how they pay.
“If you are able to pay by cash or you have a credit card that doesn’t have as many rewards or points, that would help small businesses out,” Stuckey said. “At the end of the day, just patronizing the businesses is going to be the biggest thing you can do.”
