Small Businesses Retaliate ! Back to Basics

[spanglesooty]

I have a small retail business employing 8 people. I started my business 26 years ago retailing women's fashion & some of the women who work with me have been with me since I started, so we are very much like a family.

I have never known trade to be as bad as it is now & I am suffering at the hands of my bank, as are most small businesses at the moment.

Last week my Card Processing Machine broke down (as it often does) as it was the week-end we were without the machine for a few days until we received a replacement machine.

What was interesting, is that, we never lost any sales, which made me think...
Do I really need this machine ? Do I really need to take plastic ?

We are lucky to have an ATM Machine close by & customers either paid by Cheque or got Cash from the ATM. Plus, the price of the average item we sell is less than £25.

I realise that this may not suit every business to do this, but, I have decided to take my Card Machine out & go back to basics- taking Cheques & Cash only.

Banks want every transaction to go thru them & the government want to know how much money is in our pockets & how much money we are spending. They will want every individual to keep personal books soon !

Paying for everything by card is adding to the cost of what the consumer buys & encourages people to get into debt with Credit Cards.

With my percentage charges of 2.9% on every sale (more on Amex) plus, the 50p Refund Charge on Card Refunds - bearing in mind that as many as 1/3 of purchases are returned for a refund - I've calculated that I would need to loose above £25k from my turnover before I actually start to loose any profit.

Plus, because I close at 8pm my transactions take 4 days to go into my bank as I am in the later slot for the banking window.

Big businesses have the advantage of being able to negotiate a reversal of percentage fees i.e. they get paid a percentage of the money they take on cards because of their high turnover. So again, small businesses are at a disadvantage.

I could keep my prices down by doing this and if other businesses followed suit the consumer would eventually benefit. I see it as taking control of our own finances again, both as a retailer & as a consumer. After all, we retailers & small businesses are also consumers too.

There may well be some minuses with this idea, but if small businesses started a campaign to rebel against the Banks starting with this one simple idea, then maybe this will drive transaction costs down for other small businesses who cannot trade without taking plastic.

Remember how successful the campaign was to "Buy British" in the '70's recession ? That idea was started by two young women- if I remember correctly. So, why don't we small businesses, do what we can to regain our independence and instead of relying on the banks before we spend a penny... lets start a campaign to by-pass the banks at every single opportunity.

This could be just one of many small ideas to force change in the banking system. It seems to me, that the banks don't know which comes first - the Chicken or the Egg. So, we need to show them.

It may also be a lesson for our younger generation. I watch our younger customers using plastic for everything. They walk into my shop with a bunch of car keys in one hand and their mobile and plastic card in the other hand- no handbag. They will then attempt to pay for something that only costs as little as £1.50... with a credit card !!!

We need to change the mentality of this generation as they are the least prepared for this credit crunch because they are so use to living now... Mum & Dad will pay later. They need to learn that the Piper has to be Paid and Mum & Dad won't always be around to pay their credit cards off.

After all, it's this generation who will become our future Politicians and Bank Managers. It's this generation who may one day have the power to.... stop Mum & Dad's Pension !

I invite your comments, feedback & further ideas to bypass the banking system.

Nobody is going to help us to get thru these bad times... so, lets get together & help ourselves.

The very best of luck to every small business out there...

Spanglesooty... or SS for short !

[banker_rhymes_with]

Hello SS!

I couldn't agree more.

Also, as this Recession/Depression deepens, I think many people will be going back to Cash, or at least Debit Cards and Cheques.

Many will be denied banking facilities, and many will not want to use them even if they could get them.

If people want to be Paid in Cash again, then they should be allowed to be Paid in Cash again.

In our business there are more people wanting to Pay via Cash, which can be an issue for any Remote Sales.

Postal Orders are very expensive, so not ideal, i.e. I can't ask someone already tight on Cash to shell out even more to convert their Cash into a Postal Order.

I think, but could do with knowing, that many banks will take Cash over the Counter. By that I don't mean your own bank, but any bank.

I think most will accept Cash if given your Account and Sort Code details, but will charge a fee to do it.

Does anyone know if that is correct and, if so, what level of fee do they charge?

Cheers,
BRW

[spanglesooty]

Hi BRW,

I'm not sure myself on the charges that banks levy on cash deposits, I just know that I will be saving a fortune on the % I pay for the privilege of accepting plastic !

Plus, the rental of the machine & then the audacity of the 50p refund charge with no rebate of the % that I've already paid to sell the goods in the first place !!!

It's when you see it written down in black & white that it brings it home to you how unfair the whole system is.

I'm just coming to the end of my 4th day of my experiment- of not taking any cards & up to now (touch wood) I have not lost one single sale !!!

I've taken very few cheques & loads of cash. The ATM Machine around the corner may need to be filled up more frequently tho... ha!

As far as banking cash is concerned- I've never come up against any problems with this. Maybe because I've been with the same bank for 50 years- up to now anyway ! God knows who I'll be banking with after Christmas tho...

I too would be interested in the costs & problems that people have with banking cash.

Regards,

Spanglesooty

[thecteam]

Have always stuck to this rule in my business, no plastic accepted at all. im not paying a percentage of my earnings to a credit card company.

plus with my business i don't believe anyone should be allowed to have my service on credit you eant this. its not something you need everyday. but something you have with you for life. you don't need the interest to go with that life on my service.

Tattoos are for Life not just for Credit Interest Charges

[roscodog18]

Just note that if your card processing company have ever hit you with penaltieis you can reclaim them.I did and Lloyds paid out on lba so I didn't have to push hard for it.......got the interest back as well!

I prefer to use cash whenever possible.

Roscodog

[JR1]

ive started paying for items using cash instead of plastic as well as trying to buy british, and using small local shops instead of huge supermarkets.

[banker_rhymes_with]

Hello JR1!

ive started paying for items using cash instead of plastic as well as trying to buy british, and using small local shops instead of huge supermarkets.

I think I hate the Corporate Food Industry almost as much as I hate the banks, and that is saying something!

The Corporate Food Industry brought us such marvels as Hydrogenated Fat.

Then put pressure on our ever useless self-serving politicians to allow them to leave that cheap, tasteless, fatal, non-food in their 2nd rate products for as long as possible, despite them knowing full well it is a killer.

But the Food Industry is tied up with the Debt Industry, so the above shouldn't surprise anyone.

Fancy an M&S Credit Card, a Tesco Credit Card, an ASDA Credit Card?

I rest my case.

Cheers,
BRW

[MARTIN3030]

Originally Posted by roscodog18

Just note that if your card processing company have ever hit you with penaltieis you can reclaim them.I did and Lloyds paid out on lba so I didn't have to push hard for it.......got the interest back as well!

I prefer to use cash whenever possible.

Roscodog

Can you elaborate on this ? What fees specifically did you claim ?
Did you claim off Lloyds or else Streamline/Cardsave/Cardnet ?

There was some investigation last year in which regulators warned Maestro about increases in fees to business anyone know anything about this ?
As far as I recall Maestro was given some time to come back and put proposals on the table which involved a lesser increase.

[tumble]

Just come across this post , and must say I agree , been pondering on this for a while now. Decision made-going back to cash only , cant say I had any increase in sales through having it anyway .

Tumble

[roscodog18]

Martin,

I banked with Lloyds and had a terminal through Cardnet.

Business struggled, Lloyds bounced payments to Cardnet ( usually under £40 because we didn't use the terminal much) and charged me £35 to do it, Cardnet then charged me £35 for the failed payment.

I took Lloyds to Court and won for the penalty charges and decided to go after Cardnet who repaid penalty charges and interest (totaled over £400) when I sent them a second (lba) letter.

Roscodog

[cosalt]

Hi, its a great idea and I would love to follow suit as I cringe everytime my streamline statement arrives. However we take a lot of payments over the phone as deposits on bookings so losing this would be a major problem

Unless anyone can think of another way ?

[tumble]

Cheque or paypal maybe or online bank transfer ,suppose this would depend if particular bank charged for BACS payment think its worth a look . Was at my accountants today and he said that the majority of his clients were reverting back to cash, as were businesses that they in turn were dealing with . Cash will surely be king again . Small businesses provide 60% of the economy yet we get ripped off . The card machine providers justify charging you more if you have low usage - every which way they win . Id say boycott if you can.

Tumble

[ravenbluemoon]

So long as you let your customers know via a little notice in the shop, most customers are understanding. I know a shop in Cornwall that gives a small discount to those paying by cash (the equivelant to the % on the card machine), and that works well too. And it actually put pressure on the local bank to put an ATM in!

[fuzzybobble]

We only accept cheques and cash in our business. Apart from proven regular customers who pay on 30 or 60 day account by cheque or BACS.

It's amazing how many one off customers come along and ask if they can pay with a credit or debit card.


The Government say they're helping small businesses. Exactly how are they?

1, You can pay your VAT bill in 6 months instead of 3 months. How does that help? Instead of one bill now, you get one even larger 3 months later.

2, You can get a grant to retrain your workers. Train them to to what? What can you train 3 existing staff to do that they cannot do now, that will stop your business going down the drain. Also who covers for them while they're training?

3, There's lots of so called grants available but try applying for one. There's so much red tape, paperwork, and exclusions involved, that it's not worth wasting the time on it.

4, As all our staff cycle to work we found out there's a government scheme where you can get a bike plus equipment (helmet, lights, waterproof clothes, etc) up to the value of £1000 per employee. The employee pays out of his/her wages each week towards the cost of the bike. The payment is taken before tax, so over a year you get the bike for almost half price. Sounds really good doesn't it?
Actually no, as you have to work 39 hours a week if you work less, you don't qualify. You have to be earning above minimum wage otherwise you also don't qualify. And at the end of 12 months you have to buy the bike from the government with a one off lump sum payment if you want to keep it, even though you paid more than half of the value already.

So the most likely people to benefit from this scheme, ie ones on low incomes/ work part time/not a full 39 hours, who don't have, or can't afford a car are excluded right away. If you are one of the "lucky" few that meet the criteria, then they expect you to pay the whole price for the bike anyway.

This is a classic example of how this government pretends to help people by media shows, etc. But then the reality kicks in and time after a time you discover it's as good as worthless.

The only people who get anything in this country is the top 10% richest. Who grow ever richer at the expense of the rest of us.

But that's the way it will always be unless we stop moaning to our mates down the pub on a friday night and actually get off our lazy arses and do something about it.

[BowlOfCherries]

Hi Chaps, I too am trying to stop using plastic, buying local from little local shops. As a self employed person whose phone has stopped ringing I now have the time. The big plus is it is so much nicer to chat to a local Butcher than visit Sainsbozos, but then, of course removing your own appendix with a rusty spoon is more fun than that (I imagine)

[MARTIN3030]

Originally Posted by roscodog18

Martin,

I banked with Lloyds and had a terminal through Cardnet.

Business struggled, Lloyds bounced payments to Cardnet ( usually under £40 because we didn't use the terminal much) and charged me £35 to do it, Cardnet then charged me £35 for the failed payment.

I took Lloyds to Court and won for the penalty charges and decided to go after Cardnet who repaid penalty charges and interest (totaled over £400) when I sent them a second (lba) letter.

Roscodog

Well done-its the first time Ive heard of a claim through them.
I cant remember if it was Cardnet or Cardsave-but they have a membership in which you pay £70 to join and then they charge fees every month-my brother swapped over to them but had probs with a few things that the sales rep was less than upfront about-so he continued to use his old one (through Streamline) for his Lloyds acc

Next thing they cancelled the service for underuse and demanded around £270 in fees.


I sorted it out by demanding a breakdown of their figures to substantiate their losses-he had already paid them the £70 plus 2 monthly fees.

They try to get around it by making it a membership agreement.

The £70 quid joining fee is apparantly for credit checks,yet we know these companies have instant online access to view CRA files....what a racket.

[tumble]

No card machine in my business now and no complaints to date !!!! Next step to lobby parliament on business rates. Read in local paper yesterday that institute of chartered surveyors want to interview property companys to see the effect of paying business rates on empty property will affect them.