Each year, millions of American consumers decide it’s fun to get up at 3am after eating their Thanksgiving turkey, and camp out for two hours to save $150 on a TV. Yes, I’m talking about Black Friday, which is enough of a thing that every single personal finance blogger in the world came out and said how stupid it is, even though spending two hours in line to save $150 is a pretty effective use of your time if you were going to buy a TV anyway.
Don’t mind me. Part of being a contrarian jerk is disagreeing with things that sound perfectly reasonable.
A recent addition to Black Friday is something called Small Business Saturday. Small business owners were pissy about customers abandoning their stores for big box rivals, because small business owners are always complaining about something. It’s a law when you open a small business. Don’t bother checking that. It’s true.
Small Business Saturday in the U.S. was the brainchild of the marketing department of American Express, a fact that will become ironically hilarious once you look at the title of this post, which I assume you haven’t done yet. AMEX figured it would be a good idea to encourage people to spend money, and it also has a problem getting businesses to accept its cards, thanks to the higher swipe fees. It’s win-win.
I’m not sure if this ever became a thing in the U.S., but Canada’s version of Small Business Saturday had a twist. Financial commentators were telling people to not use their credit cards when patronizing small businesses, since swipe fees are causing real problems. This situation prompted the following tweet, by some unfunny blowhard:
Small businesses want me to pay more and then not use my credit card? No wonder Walmart is kicking their collective asses.
— Nelson (@financialuproar) November 30, 2013
I’m no business jenius (typo on purpose, because jokes) but I do understand one thing. Giving your customers many different options to pay for their purchases is a good thing. You want people to be able to give you money. That’s pretty much the entire thing a business does.
I know a vacuum repair shop that doesn’t accept any plastic. Do you know how many people have ventured in to buy something, been told the place won’t accept their debit card, and then never gone back in again? Plenty.
If you’re running a small business that competes with Walmart, you’re insane. Walmart will kick your ass every time and not even notice your business’s untimely death. Walmart cares about making money for its shareholders. It has no feelings toward some crappy small town pet store. Walmart will roll over it with all the emotion of a locomotive squashing a penny.
It’s hard for small business to compete against the big guys. I get that. But most successful small businesses don’t really compete with the big guys. One of the reasons the small town vacuum repair shop can get away with not accepting plastic is because there are no other vacuum repair shops in town. A business can get away with a lot if it has no competitors. You don’t even need to be the best whatever in town. All you have to be is not the worst.
The ultimate point is if you own a small business and 2-3% credit card fees are an actual problem, you’re in a crappy business. Your margins are not high enough, either because there’s no pricing power or because fixed expenses are too high. Either of those things don’t lead to successful small businesses.
Small business owners are quick to point out how small businesses give better service. Apparently if you go in and talk to a small business owner, you’ll be so impressed that you’ll drop everything and beg them to take your money. Part of giving good service is accepting your customer’s credit card. It’s not that hard.
It’s almost as though this attitude is expected. Small business owners complain about how tough it is, and that includes paying credit card swipe fees. Customers are supposed to feel sorry for them. No. Screw that. If a small business can’t exist on its own, it should die. I should not be expected to support a small business as a charity case.
Accepting credit cards is a reality of having a business. If you don’t like it, get out of business. Next thing people are going to argue is having lights and heat hurt small business. Hell, if you take the argument to its logical conclusion, EVERY EXPENSE hurts small business. If I choose to show up and pay using my credit card, I expect every small business owner to thank me for my purchase. 97 cents for $1 of merchandise is better than customers not showing up. It amazes me that people in general continue to miss this point.