David Goldstein

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David Goldstein is the Chief Technologist at OurEpxerienceCounts.com. David has over 25 years of experience in information technology management. He was founder and chief executive officer of Green Eagle Technology. He has also had management positions in information technology at National Semiconductor, Fairchild Semiconductor, BlueRoads Corp, and was Applications Manager for the City of Santa Clara, California. Although he is a primarily technologist, he has a passions for saving money, and he shares some of his successful and best tips with the OurExperienceCounts.com community. Please email him your tips, so he can share them with our community.

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Tip of Week - Cash is back
September 30, 2010 by David Goldstein
Growing up in New York, my father owned a small retail business, and only took cash payments. I distinctly remember we always had large wads of cash hidden in the house. Today most of us, no longer carry much cash, as we prefer the convenience of our credit or debit cards. Easy to carry, everything comes on one statement; we all know the reasons. Have we ever thought about the cost to business to take these cards?
The banks get rich on both ends with these cards. In addition to the fees they impose on us, the consumer, they also charge fees to the retailers. In general, the smaller the retailer, the fewer and smaller transactions they have, the higher the costs.

Business are now actively asking for cash

In the past couple of weeks, I have actually had two instances where I was offered a lower price if I paid in cash. One instance was at my regular dry cleaner, a small one person operation. The owner said it can cost her up to almost 10% to take a card, and if I paid in cash, she would pass that savings back to me. I took her up on the offer. The other was at a small furniture store, whose owner came right out and offered me a significant discount if I paid in cash, which I took. 
In another case, I have noticed that many smaller, lower ticket restaurants have gone to a cash only or a cash/check only policy. I spoke to the owner of my local falafel place, and he said that since most of his transactions are small, he’d have to raise the prices on of his menu to take cards. He’d rather keep the cost down, and his life simple.
You will not get this kind of discount at the local supermarket or big box retailer. They get the best deal for taking the cards from the banks and their pricing incorporates the cost of taking cards. However, many smaller Mom & Pop businesses will give you a discount for cash. Don’t be afraid, and don’t be shy. All you just need to do is ask.
Categories: OEC Tip, Finance, Things You Need to Know, Strategies for Unemployed
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Comments:


10/05/2010

I have not encountered any merchant offering me a discount when I pay in cash!

I do like your suggestion to use cash so as to help the small business owner make some more money. Every time a credit or debit card is used, the merchant pays a fee to the bank: a fixed transaction fee and a percentage of the sale price. This may be a reason why some merchants require a minimum balance (e.g. $15 or $20) before accepting credit card for payment. But this practice of requiring a minimum balance is illegal and violates the commercial agreement he has with the banking entity he uses to process credit card payments.

However, it is still a good idea to use a credit card when you buy big ticket items or something involving warranty. Credit cards offer extended warranty, price protection and even rebate on purchases made. Also, if you don’t carry a balance on your credit card, you can use the credit card company’s money for free between the time you purchase the item to the time you pay the bill in full.

Thanks for the good suggestion to use cash. Maybe our society will become less leveraged if we have to part with our cold cash every time money is spent.

Cal

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