I received an email from a customer last night about the post I had regarding the sales tax increase that takes place April 1st. It's under comments but here is a portion as well….
I came in to your store for the first time today to get my son's first haircut. We had a wonderful experience, and I'm sure we'll be back in the future!
I know a lot about state taxes because of the work I do. The sales tax is going up .6% because the voters voted in an increase to the RTA potion of .5% (for a total of .9%) and voted in a new .1% chemical dependency portion in Snohomish county. As a consumer, I am not too happy about the increase either.
It was nice to get feedback from someone that knows about the situation, because I certainly had a hard time figuring it all out and a bunch of customers I talked to didn't know about it either. The bottom line is that we voted on this increase and it passed. It probably isn't a great time in our economy to increase taxes, but if it was voted on and passed, that's what has to happen.
As I wrote back to her I'll post this little tidbit now. Taxes are unavoidable but huge bank fees are. As a small business it is amazing at all the taxes and fees that we have to pay to stay open. It really is. We have to collect sales tax from all of our customers and pay it and we also pay a B&O tax for all salon services which we do not include or pass on to our customers. We want our services to be affordable.
But what you might not realize is that every time a debit or credit card is used the bank charges a business a "swipe fee" and a percentage of the total sale, including the tax. So in these difficult economic times we have been trying to figure out a good way to save our customers money. For the past few weeks if you paid cash for your haircut it was an even $20.00. We still pay our taxes on that but just pass on the bank fees we would normally pay back to the customer. This doesn't allow our business to make more money, but instead of us paying the bank fees for using a machine the customer saves money. Which is great all around I think. You save a few dollars and that decreases the big chunk of money that gets removed from my account at the start of a month. We'll see how that works out at the beginning of April. We want to try and do this in the shop as well. Pay cash or write a check and save some money.
I think I may have blogged about this before after seeing an Oprah show with Suze Orman. Suze was talking about how we used to be a cash society and instead of credit cards people would put things on layaway and just pay things off before they got them. Then they came out with credit cards and debit cards, making it easier for consumers to overspend…. swipe a card and you got your stuff. Easy. Then you received your bills with interest… and so it went. Banks made (and make) money on interest but they also make money on the back-end, charging stores a fee to accept these cards. Usually about 25 cents to swipe and up to almost 4% of the total, depending on the card. You know those cards with cash rewards and points? Yup, that's how the card companies do it, they charge it to the store.
I'm interested in hearing if this would work for you, the consumer. Are you willing to write a check or use cash, instead of using a debit or credit card to save (in the neighborhood) of 2% – 5%? Let me know, I'd really like to hear your opinions on this.