Best Breakfast 2019 and.....Go

[baygo]

Originally Posted by joey2665

Actually Amex is 3% but Visa MasterCard and Discover usually only 1.2 to 1.5%. If they raised their price by about 25 cents a meal it would cover the fees and make customers happy. But then again there is the “under the table” issue.


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Credit card fees vary from, Industry to industry and business to business, depending on who the processor is. The restaurant industry happens to have the highest processing fees. There is an additional factor that actually increases the cost to the restaurant. Let’s say a diner enjoys a $100 dinner, plus 9% tax equals $109 plus 20% tip is $21.80 tip. Total $130.80 3% is $4.00 or 4% of the original $100. A small restaurant that runs $500,000 in credit cards yearly can easily pay $15,000 a year in credit card fees. The owner of a restaurant that does that level of volume is looking at $15,000 as 20 to 30% of his or her take at the end of the year.

It’s not uncommon for loyal customers to a restaurant to bring cash to help protect the longevity of there favorite restaurant.

“Under the table” is really more a thing of the past in the restaurant business. Today, state and federal revenue collectors have sophisticated software that compares restaurant consumption against revenue reported. Anyone attempting to under report sales will get caught.

[joey2665]

Originally Posted by baygo

Credit card fees vary from, Industry to industry and business to business, depending on who the processor is. The restaurant industry happens to have the highest processing fees. There is an additional factor that actually increases the cost to the restaurant. Let’s say a diner enjoys a $100 dinner, plus 9% tax equals $109 plus 20% tip is $21.80 tip. Total $130.80 3% is $4.00 or 4% of the original $100. A small restaurant that runs $500,000 in credit cards yearly can easily pay $15,000 a year in credit card fees. The owner of a restaurant that does that level of volume is looking at $15,000 as 20 to 30% of his or her take at the end of the year.

It’s not uncommon for loyal customers to a restaurant to bring cash to help protect the longevity of there favorite restaurant.

“Under the table” is really more a thing of the past in the restaurant business. Today, state and federal revenue collectors have sophisticated software that compares restaurant consumption against revenue reported. Anyone attempting to under report sales will get caught.

But my point was to raise your prices by the minimal 1.5% to offset the processing fees also increase in business could also help offset the costs. The other costs you always have to deal with.

As a CPA I certainly understand the audit risks but in my experience many smaller restaurants always tried to guild the Lilly and many know how to do it and not raise red flags.


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[BroadHopper]

Originally Posted by joey2665

But my point was to raise your prices by the minimal 1.5% to offset the processing fees also increase in business could also help offset the costs. The other costs you always have to deal with.

As a CPA I certainly understand the audit risks but in my experience many smaller restaurants always tried to guild the Lilly and many know how to do it and not raise red flags.
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As a financial analyst, I agree with you here. I spent a lot of research on how credit cards work and its a huge profit industry! Consumers can switch cards to help the vendors and vendors can switch bank card systems for savings. It's a game CC folks love to play! They even make money on debit cards! Convenience cost money!

There are consumer banks that actually pays your CC fees. Mostly CUs. I opt for a CU that pays for all of my CC fees including fees occurred outside of the CU network! It pays to shop around!