How the Supreme Court could make business owners responsible for their bad decisions
(This post originally appeared on The Washington Post)
When I was in Australia earlier this summer, the resort where I stayed had a sign on its front desk informing guests that a surcharge would be imposed if payment was made by credit card. I will be back to Australia. But I won’t stay there again.
I recently ate dinner at a great little Italian restaurant in Philadelphia and when it came time to pay I was told it didn’t accept credit cards. “We have a cash machine in the restaurant if you need,” the waiter politely informed me. Thankfully I didn’t need it. There was a $4 service charge. There are lots of great Italian restaurants in Philadelphia. I won’t eat at that one again.
The world still has dumb business owners.
There’s the hardware store near me who wouldn’t let me use a credit card because my purchase was less than $10 (I now shop at Home Depot). There’s the taxi driver who offered me a “deal” if I paid in cash (I’m now only using Uber). There’s the family pizza shop that imposes a $5 surcharge on any order if a credit card is used (I now get a slice from another pizza shop 100 feet away).
Do these businesses not get that we are living in the 21st century and that credit and mobile payments are quickly replacing cash? Apparently not. They are still clinging to the past. These establishments represent a dying breed of small businesses around the country. They are mostly run by people of my generation – older folks who still remember the days when there were no credit cards, when they could run their little shops by the seat of their pants without any sales or customer data. These business owners are dumb.
They don’t seem to realize that millennials, those aged 18-34 years old, now make up a quarter of the U.S. population (and about half of the current workforce) and have grown up in a world of ATMs, self-service gasoline pumps, Amazon, Square, Venmo and Bitcoin. They are the ones downloading Apple Pay and PayPal on their smartphones and tapping their phones over newer point-of-sale units that magically ring up their sale and record it in a cloud-based data store.
That same generation who now runs businesses are investing in tablets and “beacons” that automatically send coupons to a roaming shopper and then ring up sales in-store or at a customer’s home after a service has been performed. And they are the ones who view credit card fees as nothing more than a marketing expense for their business. It’s a necessary and important cost so that their customers get a better, quicker buying experience while important data is accumulated about each transaction that will help their companies sell more items in the future to that same customer and the family, friends and other members in his social network community. These business owners are smart.
The rest of the small business owners who don’t realize this are dumb. And now the Supreme Court is trying to help them see the error of their ways.
Why would the nation’s highest judicial body get involved? Apparently, there are dumb merchants in 10 states who feel that their free speech rights are being infringed because their state doesn’t allow them to charge their customers more when they use a credit card. So now a group of justices, most with little practical business experience, will be forced to teach these so-called “experienced” business owners a thing or two about the reality of running a business in the 21st century.
Here’s the reality: Most of us would prefer to just pay by credit card or our phones. The smart clients I work with in retail and services get this. They build the transaction fees into their pricing where it’s essentially unnoticed. They understand that the added cost can easily be recovered by the added convenience provided to their customers. They also are investing in newer, cloud based accounting systems so that they can make additional sales because of the marketing data they collect. They realize that the time some people spend trying to evade taxes by only taking cash could be more profitably spent by creating a better customer service environment.
You would think that I’m on the side of the states who are regulating against those businesses that charge their customers additional fees when a credit card is used? Nope.
I’m hoping that the Supreme Court will strike down the states’ laws and allow those business owners to go ahead and exercise their freedom of speech. That way when they ultimately drive themselves out of business we, the consumers, will more quickly benefit from those younger, smarter competitors that are giving us a better buying experience.