Small businesses nickel and dim…even if you use a card

BISMARCK, ND (KFYR) — Small businesses in every community want to make shopping as quick and easy as possible for customers. But ease of payment comes at a cost.

Inflation has affected every aspect of our lives. Small businesses are acutely aware of all the changes that have occurred since the pandemic as soaring prices have altered the business landscape.

“It’s just something you have to do with the shots. So if inflation comes, we’ll have to be careful, watch the cost of our goods closely,” said James Eastin, co-owner of Laughing Sun Brewery.

“With the rising costs of everything, it’s just, for us small businesses, it’s really having an effect on us,” said Becky Bjerklie, owner of BB’s Bath Bakery.

One cost that is often overlooked is the cost of using a credit card. With each scan, a customer leaves satisfied with their purchase. But the price of this scan is not free. Businesses are paying for the convenience of accepting credit card payments – fees that are increasingly difficult to bear.

“You know, obviously we always prefer when people pay cash, it helps on our end,” Bjerklie said.

While cash may remain king for some small businesses, card purchases are what some customers prefer to use. Not only for the ease of access, but also for the rewards that certain cards offer.

“American Express has a bit more fees there, basically I think the cards that give the consumer more are going to charge the restaurant and stuff more,” Eastin said.

Shawn Dillon, head of cash management at Starion, explains that for some businesses, passing costs on to customers is a way to help businesses save on fees while fighting inflation. This is called overload.

“It’s something where you’re able to pass that on to the customer as they pay. So let’s say your invoice is $100, you can pass a charge of about $1.50 on the customer who generally won’t care if they need to swipe that card,” Dillon said.

Bjerklie says being more mindful of which payment option customers are using is one small way to help small businesses weather an era of ever-increasing inflation. She points out that large businesses can absorb credit card fees more easily than most small businesses.

Eastin said that at one point the cost of their wings tripled due to inflation and Bjerklie said she was paying more than double for the bath bomb ingredients. Saving on credit card fees can help them increase their bottom line even more.

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