Ca$h Economy
The last few weeks when you’ve gone to make your market purchases either in person or online through the SQUARE credit card app you may have encountered technical difficulties. Even the company apologized for the outage that upset millions of users. Producers lost sales and consumers went home empty-handed all because we’ve come to depend on technology for our financial transactions.
Sure, it’s easier to touch your phone or watch to the bit of plastic hanging on the vendors’ tables and it sure makes bookkeeping a whole lot easier, but when the system goes down we all suffer.
When I began selling at farmers markets twenty plus years ago, no one took credit cards. There were no mobile machines and those who did have them were usually at indoor markets where there was access to electricity and a dedicated phone line. The whole process was too costly for simple transactions. Even grocery stores didn’t take credit cards.
But as computerization and cellular services became ubiquitous, innovation took over. Coming out of the information security industry, I was leery about digital currencies until at a farmers market I saw another vendor swiping a credit card with a little white fob inserted into her iPhone. Within minutes, she had me set up and taking credit cards, the money going right into my bank account without me having to drive into town on Monday morning to make a deposit.
Customers enjoyed the convenience of using their credit cards at market, especially for larger purchases or when they got caught short on cash. Farmers saw a marked increase in sales. And then the pandemic hit and no one wanted to use dirty paper money anymore. Pre-orders and curbside pick-ups became the norm. Vendors created online storefronts through the app. Click, buy, and pay worked like a charm until one day it didn’t. Sure, the outage was only temporary, but during that time vendors saw a reduction in their sales as much as 75%. Ouch!
Most folks have no reason to use a credit card processing app, so let me fill you in on what using one means for the vendors. It’s not free. Each transaction costs anywhere between $0.10 to 0.15 depending on whether you tap, dip, or key in the credit card information. On top of that there are fees between 2.6% and 3.5%. While that may not seem like much, it adds up. To give you perspective, last year I paid more in credit card processing fees than I did for electricity. Ouch!
Every winter we go through the same issues with credit card equipment that won’t work because it’s too cold and in the summer sometimes when it gets too hot the equipment shuts down. Solar flares interrupt cellular signals and the equipment can’t transmit over the internet. Batteries die. Yet, we all need to eat. How can modern technology that’s supposed to make our lives easier end up leaving us with an empty refrigerator?
People are starting to use cash again. A dollar is still a dollar when it exchanges hands, but a dollar on a credit card gets a bite taken out of it by the bank until it is nothing. Some vendors have raised their prices to account for the added expense, others tack on the fee to your transaction, and others simply eat it as the cost of doing business.
When you shop at the market week after week, often purchasing the same items, you know approximately how much money you spend. Consider having enough cash to cover those purchases and put all of that money into the hands of your vendors. You won’t have to worry about hiccups in technology and most of all, your farmers will love you for doing so.