[Vision2020] Sangria and Transparency

[Donovan Arnold]

They just need to put one price in the menu, be what it may with new costs, not play games. People don't want a side order of politics with their steak and wine. 
 
Donovan Arnold

From: Jay Borden <jborden at datawedge.com>
To: vision 2020 <vision2020 at moscow.com>
Sent: Thursday, October 6, 2011 11:12 PM
Subject: [Vision2020] Sangria and Transparency


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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