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Before you charge that muffin, consider paying cash

  • Nellie Baucher, left, of Amherst pays Jordan Tenney for her order at Cushman Market & Cafe in Amherst. GAZETTE FILE PHOTO



Wednesday, September 12, 2018

Here’s a radical idea: The next time you order coffee at your favorite café, pay for it with cash, not credit card. If you don’t have cash on you, go to an ATM.

The simple, seemingly small act of using paper instead of plastic, if done consistently by customers around the Valley, would make a big difference in our local economy.

As reported by Luis Fieldman in “Cash or credit: The choice affects businesses” in the Gazette (Aug. 27), many independent businesses are hit hard by credit card fees for small purchases. Fieldman looked at three cafés, in particular. Consumers may not realize that their transactions typically come with a processing fee, say, 2.75 percent; meaning that, for every purchase, a fraction of the cost goes to a corporation benefiting from our dependence on plastic. That’s a considerable loss for a small business that may already be operating on a modest profit margin.

“It’s a bit of a mixed bag,” Pete Sylvan, co-owner of Cushman Market & Cafe in Amherst, told the Gazette. While he appreciates “the convenience factor” for customers, “The fact remains that it is money spent locally that ends up going to a corporate entity.” At Cushman, he added, an estimated 65 percent of all transactions are made with credit cards. He chocked up the money lost to processing fees as “the cost of doing business.”

It’s a conundrum, to be sure. Part of being in the hospitality business is being, well, hospitable, and many small business owners don’t want to alienate customers by restricting how they pay for purchases. After all, credit card users are still supporting local business.

“Cash is important, but it’s worth noting that people who are making that decision to shop with credit cards are already taking that step, and we have to be gracious with each other and grateful,” said Julie Copoulos, co-owner of Easthampton’s Small Oven, where approximately 60 percent of sales are made with credit cards (with a nearly 3 percent swipe fee).

“We are grateful for all customers no matter how they choose to pay,” said Rebecca Robbins, co-owner of Woodstar Cafe in Northampton. “We are mostly trying to encourage customers to spend cash for items under $10.”

According to the National Retail Federation, many retailers identify swipe fees as their second or third highest cost, after employee wages and health benefits. An estimated $80 billion is spent annually on transaction fees nationwide.

The root of the problem, says Gerald Epstein, an economics professor at the University of Massachusetts Amherst, is a lack of competition and regulation in the credit card industry.

“Large banks, such as Bank of America or Citibank, are owned by stockholders who don’t live in areas like Northampton,” Epstein told the Gazette. “They get higher profits off the profits of small businesses and consumers from all over the country. That is a transfer of income and wealth from small businesses and customers to large institutions.”

On a local level, we can make a difference, he added: “So many people in our community, if they are aware of these social issues, would be more likely to do something … to help out local businesses and the local community more broadly.”

Here in the Valley, we pride ourselves on buying local. We support places like Cushman, Woodstar and Small Oven, which in turn support other local businesses. (Cushman gets its bread from Woodstar; Small Oven maintains strong relationships with local farms, often bartering or buying products with cash.)

As a community, we celebrate our independence and trumpet our anti-corporate activism — and yet, we fail to apply it at the barista counter over the cost of a muffin.

It makes sense to use credit cards on big purchases — we love getting those rewards points, too. But there are rewards to be reaped by using cash on small purchases, instead of giving part of our communal pot to corporations. In theory, with the money saved on processing fees, a small business could afford to hire another fulltime employee, give staffers a raise or charge customers less.

We’re not suggesting a plastic ban — leave that to the bags. But when it comes to small purchases, it’s worth making the effort to pay cash, both for the benefit of small business owners who are doing their best to be flexible — and for our benefit as a community.