[Vision2020] Sangria and Transparency

[Jay Borden]

In a recent "round-table" discussion with a few of my peers on a variety
of topics, the opinion of *more corporate transparency* emerged over and
over again as what's wrong with America.  (Warning:  wine was flowing).

 

So... my wife and I went out to a nice dinner last night at Sangria
where we saw a note paper-clipped in their menu.

 

I forget the *exact* phrasing, but the note said something along the
lines of:

 

"As of September 10th, the menu prices listed will reflect a cash price,
and a 2.9% surcharge will be added for any order that is paid for by
credit card.  [Something something about fees].  Please help us fight
the evil corporations that want to take money out of Moscow by paying in
cash!"

 

Again... it's not word-for-word, but that's the gist of the message.

 

So... interesting notes, since I happen to know a thing or twelve about
the credit card industry.  

 

Sangria has actually raised their prices, but managed to jump on the
hate-wagons at large still blame larger "corporate America" in the
process.

 

1)      The current "going rate" (cost) to a merchant such as Sangria
for a swiped Visa/MC credit card is ~1.5%.

a.       American Express charges 3.5% for their merchant fees, but
Sangria doesn't accept Amex (and also why many merchants don't accept
Amex). 

2)      Since Sangria is only charged ~1.5%, but their surcharge is
2.9%, they are now making an additional 1.4% on every single credit card
swipe taken at the restaurant.

3)      In addition, every transaction that Sangria can push to cash via
their little note is now saving (making) an additional 1.5% on every
single transaction, since it's a merchant cost they no longer have to
pay. 

 

Bottom line:  on every single transaction, Sangria is now making a
little more money.

 

The part that bothers me isn't that Sangria is making more money... (as
I've said before, I'm a "for profit" individual)... what bothers me is
that they choose to make a larger enterprise the whipping boy for their
own profit.  

 

In my opinion... they should either drop the dig in their menu insert
about helping them stick it to the larger banks... *or* they should make
their surcharge only equal to their merchant fees.  

 

But not both.

 

 

 

Jay

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