Use of Credit Card in Immigrant-Run Stores

A

AmericanWannabe

Registered Users (C)
I notice a phenomenon --in stores run by immigrants
(judged by look and English accent), they also require
minimum purchase in order to them to accept my credit
card. I wonder why. Once at a store, I argued with
the owner by telling him the credit card company
(Master or Visa) may not allow stores to require minimum
charge. She then refused to give me a cartoon of eggs,
which is bonus to everyone who buys things there.

But in stores run by born Americans (also judged by
accent), usually there is no minimum charge. You
can buy a cup of cofee, even a gum with your master
card.
 
cause credit card companies charge 3% of the transaction amount as a service charge. Also, they have set minimums.
Usually, immigrant run stores are run with low profit margins and hence they want to make sure, they dont go into losses
American run stores have such huge markups that they get compensated with other items.
BTW: i dont think that is an american / immigrant phenomenon. lots of stores in malls / foodcourts work on a cash only business.
 
>AmEx charges 3%. Visa and Mastercard charge 2%.

I heard discover charge only 1 %.

I remmeber discover once requires permanent residency
or citizenship for applicant even though discover can not be
used fraudulently abroad because it is only acceopted in the
USA.

>But they all accept CCs, even for $1 items.

In many of Kinko, copying machine accept credit cards.
One page cost 5.5 cent. Don't know how credit card
issuing bank charge Kinko if you only copy 1 page of your
green card (perhaps 2 pages if you want to copy both sides).
 
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Hmm, AFAIK, AmEx charges 3%. Visa and Mastercard charge 2%.
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Correct, but there are set minimums as well fees charged by the bank that handles your merchant account.

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Hmm, supermarkets have very little margins. But they all accept CCs, even for $1 items. They just decide to carry the costs in order to provide convenience to their customers.
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I Disagree. Safeway, the biggest supermarket chain in US has a gross profit of 10604 million on sales of 34301 million. Thats a markup of 30%. Thats not small by any margin. They decide to carry the cost because they can afford it. Not only that, they sell this information (what items an individual buys, how he/she pays for it) to companies like Gallup who use that data to analyze consumer sentiment. Gallup doesnt go to small shops.


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Cash-only is something different. But even some fast-food chains now accept CCs. Again, the customer is king.
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Agree completely. I think it is a good thing. But they started doing it after they started losing business to upscale chains like Panera Bread, Quiznos Sub.

My thought:
The immigrant stores target audience is people who will pay less even if they have to bag the grocery themselves. Different target customers hence different business models.
 
Reply to JoeF:

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I doubt that. I worked with some supermarket chains (we developed marketing sw that management was trying to push into supermarkets. The margins are somewhat like 2% or less. This is on groceries. The markup is of course much higher on stuff like alcohol or medicine. That sets off some of the low margins on groceries.
There also is a price war between the main supermarket chains, which ended up in consolidation, so that in CA there are now essentially 3 chains only: Albertsons, Ralphs, Safeway.
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Check out http://www.dominicks.com/investor_relations/default.asp
. You will see where I got my data. The margins may be less for grocery, but they compensate on other items. BTW: to give you an example, the $2.99 case of coke they sell, actually costs them $0.59.

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According to my information, they do not at this point. They collect the data when you use one of these "customer cards", but at this point they haven't quite figured out what to do with it. They are not overly sophisticated with their database systems yet. Again, the margin are so thin that they don't want to invest in this kind of stuff.
Actually, only in the last month did I get one flyer from Ralphs in the mail, but I have their customer card for years, since they introduced it. And Albertsons doesn't even have customer cards. They have stated publicly that they think these cards are useless.
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I have written applications that analyze that data , hence I know that for a fact. They use that data to target sales flyers etc. This thing has been going on for years. They do not collect data per customer but for a group of customers over a periods of time (e.g. over the weekend, Weekdays) etc.
 
Using credit card for small amount is considered impolite. Just like you can fight for seat or door with women and elderlies, it's not a crime. But please, leave a few decency for our immigrants, espeically if you are among the visually identifiable racial groups.
 
This is simple & no puzzle involved

Most shops run by immigrants only want cash payments and in my opinion there are following reasons for this. (they set minimum cc purchase just because it may be too much to ask for if they say no cc purchase)
1)Cash transactions may not be accounted for and they will not have to pay tax. i.e. tax savings(evasion)
2)They still have the mentality of their home country (dual standards), for the services that they get, they want benifits of developed society but for the services they are providing they want to go by standardsof underdeveloped/developing society.
3)Since it is immigrant store there is not much competition (in comparision to american stores, which cater to every ones needs), these stores mostly cater to immigrant communities, so they know that they can dictate any terms they want.
Bottom line is that, mostly one's acts are based on the prevailing situations and circumustances.
 
Last edited by a moderator:
Re: This is simple & no puzzle involved

Originally posted by ip11
Most shops run by immigrants only want cash payments and in my opinion there are following reasons for this. (they set minimum cc purchase just because it may be too much to ask for if they say no cc purchase)
1)Cash transactions may not be accounted for and they will not have to pay tax. i.e. tax savings(evasion)
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I totally disagree with this. Have you seen any such occurrence or are u just making an assumption. Do you think if you know it, the IRS would not?? and they will not catch people who do that?? Fact of the matter remains that any business owner will not jepordize his/her business by not charging sales tax.
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2)They still have the mentality of their home country (dual standards), for the services that they get, they want benifits of developed society but for the services they are providing they want to go by standardsof underdeveloped/developing society.
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Isn't that the care of everyone. Tell me one American business owner why enjoys paying taxes?? Everybody expects the best the cheapest price, and that is basic human nature.
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3)Since it is immigrant store there is not much competition (in comparision to american stores, which cater to every ones needs), these stores mostly cater to immigrant communities, so they know that they can dictate any terms they want.
Bottom line is that, mostly one's acts are based on the prevailing situations and circumustances.
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Try going to a place where there is a huge immigrant community. Do you know the number of indian run businesses (just grocery stores and restaurants) in Chicagoland is upwards of 1500. Do you think that is any less competition. This does not include mexican, polish and other ethnic communties that try to serve all kinds of immigrant populations.

The bottom lline is that these stores provide service at a cheap cost with very low margins. Hence they have to watch the costs.
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Click to expand...
 
A lot of immigrant-run ethnic product stores also rent video
tapes, VCD, DVD, etc of movies made in their home country.
I doubt they live up to the copyright standard as Blockbuster
does. Though these are not American intellectual properties,
they are still protected by American law enforcement as international treaties requires.

I don't know if an anonymous tip to FBI can initiate an investigatrion
 
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