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A comment on Using Foursquare to Detect Tax Evasion / Money Laundering. Parent comment

Re:Using Foursquare to Detect Tax Evasion / Money Laundering by ChuckMcM on Thursday August 02, 2012 @03:41PM (#4330581)
You would be wrong in that assumption. Some businesses don't like paying the additional fees charged by banks when you use a credit card, they can be up to 8.5% according to a friend of mine that runs a locksmith. He would rather give 8.5% more service to the folks who come in the door. He has an ATM on site that will let you get a cash advance on your credit card if all you brought was plastic. It has a $3 transaction fee (plus what ever your bank charges). When people complain he says, "you can pay it or you can pay it." Then explains that he (like everyone else) would simply raise his price making that fee 'invisible' to you and let the banks get away with it. This way you have a choice (of sorts).
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Re:Using Foursquare to Detect Tax Evasion / Money Laundering by mikeash on Thursday August 02, 2012 @03:55PM (#4330670)
Your friend's rates seem a bit crazy. Square charges under 3%, and a dedicated merchant account can be less still.
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Re:Using Foursquare to Detect Tax Evasion / Money Laundering by larrys on Thursday August 02, 2012 @03:55PM (#4330667)
Fees are nowhere 8.5% I've never heard that and have had a merchant account since the 80's at several businesses.

Not taking credit cards will cost you business in a retail location.

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Re:Using Foursquare to Detect Tax Evasion / Money Laundering by ChuckMcM on Thursday August 02, 2012 @04:20PM (#4330778)
He's showed me bank statements, things like 'points' and 'cashback' and other 'features' of the card all seem to come back to the merchant as deductions against the amount billed vs the amount payed. He summed up the total billed (what he charged at the register) and the total deposited, and computed the difference, that difference was 8.5% rounded to the first decimal place.
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Re:Using Foursquare to Detect Tax Evasion / Money Laundering by larrys on Thursday August 02, 2012 @04:39PM (#4330870)
Sure if he's doing small transactions but in general you shouldn't be allowing people to use a credit card to make a $2 purchase, right?

What is defined (in this thread) as "most cash businesses" would be to me businesses that would typically allow someone to pay with a credit card.

That wouldn't be a local bodega allowing some to pay for a pack of gum with a credit card. It would be a business allowing cc use in a typical case where the per transaction charge is not significant and you don't stand to loose business because you don't accept credit cards.

Examples:

You run a restaurant and your average ticket is $45. If you don't accept cc's you will generally loose business.

You run an ice cream stand and your average ticket is $5. Less expectation of being able to (or needing) to use a cc for a small transaction like that. Chance of loosing business: significantly less.

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Re:Using Foursquare to Detect Tax Evasion / Money Laundering by ChuckMcM on Thursday August 02, 2012 @04:53PM (#4330937)
Entirely possible. for a long time in California it was illegal (state law) to require a minimum purchase amount in order to use credit cards I believe (but can certainly be mis-remembering) that this was only recently changed. And yes, his business does include a lot of 'small' transactions like someone coming in to get a key made etc.
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Re:Using Foursquare to Detect Tax Evasion / Money Laundering by ChuckMcM on Thursday August 02, 2012 @04:51PM (#4330922)
On a related note, Fumiko Hayashi [1] has done a lot of research on the fee structures (much under the question of how one would regulate them and what constitutes an out of balance fee structure) but her papers are pretty accessible.

[1] http://www.kansascityfed.org/speechbio/hayashi.cfm

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Re:Using Foursquare to Detect Tax Evasion / Money Laundering by learc83 on Thursday August 02, 2012 @04:05PM (#4330721)
The actual fee charged could be close to 8.5% if you are charging mostly small transactions b/c they usually charge a percent plus a flat $0.30 fee.

Say you charge the customer $5: 2% + $0.30 is $0.40--8% of the total.

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Re:Using Foursquare to Detect Tax Evasion / Money Laundering by jonknee on Thursday August 02, 2012 @04:07PM (#4330727)
It depends on your transaction amount, the fees can easily exceed 8.5%. When I had no change the other day and paid 45 cents at a parking station with a credit card I can guarantee the fees were more than 8.5%.
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Re:Using Foursquare to Detect Tax Evasion / Money Laundering by larrys on Thursday August 02, 2012 @04:33PM (#4330841)
We're talking about merchant fees here. Not what a credit card user pays etc.
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Re:Using Foursquare to Detect Tax Evasion / Money Laundering by jonknee on Thursday August 02, 2012 @05:02PM (#4330991)
That's exactly what I meant, I paid $.45 but the city likely paid $.31 in fees. Braintree for example would run 2.89% + $.30. That's a very high percentage (69%).
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