D) I try and use credit card where at all possible, but find (and this
is VERY strange) that America has the least number of suppliers who
will accept one.
WHY?
Everything we have heard/seen on the media for the last 20 years has
told us we will follow the American trend of credit cards. According
to our media the average American uses very little cash and has
~ 18 credit cards in his wallet (must make sitting down
uncomfortable)!
So why do so many American businesses refuse to take credit cards?
In Australia you have to try very hard to find any business that
won't accept the main 4 cards (Visa, Mastercard, Amex and our own
Bankcard)? Ideas please?
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The problem is that many of the dealers who have the military parts, manuals
etc. are very small businesses or not businesses at all, just a kitchen table
operation. In the US it is now very difficult to get what is called a
"merchant account" which is the business side of the credit card arranged
through a commercial bank or intermediate clearing house. The reason for the
problem is rampant fraud. Banks have taken large losses from scams which set
up a front, sell lots of travel packages or similar intangible product over the
phone. The scamsters rush the credit card vouchers down to the bank and get
immediate credit. This goes on for a few weeks, then the bank account is
cleaned out and the operation folds. When the customers realize they have b
een taken, they refuse to pay the credit card bill. The bank is left with the
loss.
Because of this, most banks now will not open a merchant account unless you
have an established business with a physical store front location. Even then
they are very strict. Clearinghouse operations charge much higher fees and
so are more flexible, but still the usual rule is NO PHONE/MAIL ORDER. They
want the credit card to be taken in person or with an order signed by the
buyer.
The large mail order companies (LL Bean, etc.) have no problem because they are
long established, have large amounts in the bank in their accounts etc. The
very small surplus dealer has almost no chance to get a merchant account unless
he 1) pays a large fee per transaction plus high lease fees for the card reader
which cuts into his profit or 2) has an "under the table" arrangement with a
friendly storeowner who will process the card vouchers for him. A lot of
small dealers just don't want the bother and potential liability. Since it is
a violation of the merchant account agreement to process vouchers for another
business, even the "friendly" arrangement with perfectly legitimate parties can
cause trouble.
I have two businesses which do take credit cards, but there are many
hassles. Fees are going up and the rules are getting tighter.
Hope this is helpful,
chuck