Sunday, May 01, 2005

Debit Cards

Recently, customers using their debit card to make purchases have been finding it difficult to use their cards as credit rather than debit. When they swipe their card, they have to go through a little more fuss (rather confusing to some) in order to skip the pin number step and sign for credit instead. Why would Wal-Mart want to make it more difficult for its customers at the check out line you ask? Easy. Debit purchases save them money.

A credit card purchase can cost Wal-Mart as much as $1 for every transaction because banks charge Wal-Mart (and other businesses) for allowing cutomers to use their cards. It sounds a little absurd, but Wal-Mart can't afford to not do it because they know their sales would plummit would they only accept cash or check as valid forms of payment. (Some smaller businesses still won't accept credit cards, or have a minimum purchase amount [say $5] for using your card. They do this because they couldn't afford the bank charges for every 50 cent purchase.)

Debit card purchases, for reasons I can only speculate on, cost much less, somewhere between 25 and 50 cents per transaction. If Wal-Mart can "trick" people into using their cards as debit rather than credit, they can save maybe 50 cents every transaction. Multiply that by thousands of transactions every day in any store, further multiplied by our 5,000 or so stores, and you start saving truck loads of money.

[Why woud bansk charge less for debit transaction? I would venture to guess that some banks want to encourage use of debit cards because they're ab;e to charge hidden fees for using debit cards for transactions just like they would charge a fee for using the debit card at certain ATMs. Maybe there are other reaons, too. I'm not all that bright, but I'm sure you might be able to think of one or two more.]

So next time those debit pin numbers pop up at Wal-Mart, make sure you let them know you want to use your card as credit. It can still be done; it's just takes an extra step or two. Don't get lazy and let us off the hook though. And if at all possible, use your credit card to purchase a candy bar or apple. Any credit card purchase less than 75 cents will make us lose money.

Do your part.


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