Today I found myself in the centre of London and I passed an independent newsagent, which looked as though it was really well stocked with magazines. Quickly exchanging my freestak hat for my Like the Wind one, I went in to see what looked interesting and perhaps pick up a couple of titles for inspiration.
The risk of losing a sale
Indeed this little independent newsagent was well stocked with some really interesting magazines. I picked up a couple at £6 each and went to pay for them. I needed to use my card and the chap behind the counter informed me that he would charge me £0.50 for paying with a card. I was surprised that given I was spending £12 he wanted to charge me to use a card and I told him so. He said that they charge £0.50 for all card transactions.
I left to go across the road to get some cash. From an ATM next to a big chain newsagents (WH Smith as it happens). There was a queue at the ATM so I went in to the chain newsagents. And guess what? They had both of the titles that I was going to buy from Mr. Independent. And there was no charge for using my card.
So the independent retailer lost a £12 sale because he wanted to make an extra £0.50. Now I get that if I want to buy a pack of chewing gum with a card then the shop is going to charge me for the privilege – there are costs after all, typically £0.08 per transaction on a debit card or 0.8% on a credit card. But if I am spending £12, surely it is worth foregoing the £0.42 that the shop would have made in order to have the sale?
What about your business?
Is there a similar situation in your business? A fixed delivery cost for example? Something that is automatically added and which is just enough to make the customer walk away?
Obviously in some circumstances it is right for your business to not absorb costs that eat significantly into your profit. But do you give your customer-facing staff the discretion to waive fees if it makes sense and is going to secure a sale that is worth far more than the fee would be? Or can you build a system that recognises that above a certain value transactions should have fees or delivery costs waived?
Obviously this is not always easy, but perhaps it is necessary.