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price of credit
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23-01-2011 10:59pm#1
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I am amazed when I hear people say they have never come across this before. I have never been into a shop that didn't charge it.
First prepaid phone cards came out years ago. Shops got 12% to stock them. Then the margin was cut to 10%. Then the shops were told the margin on the cards was being cut to 5% but if you take on the printed phone credit(what everyone uses now) you would keep a 10% margin. As soon as the changeover was complete they cut the printed credit margins to 9%...to 6% and now its only 3%.
Unlike Lotto machines that also have a low margin(5%) there was no geographical/distance exclusion deal. The Lotto promised shops taking it on in the beginning that they would not install machines in another shop within a certain distance of the shop. Thus the shopowners accepted the low margin because the lotto would drive custom in the shop. With phone credit machines in every shop, credit does not drive extra custom. It rarely even drives ancilliary purchases anymore either. Its become such a necessity that people will by it to the exclusion of other purchases, EG kids spending money on low margin credit instead of high margin sweets. A 3%margin barely covers costs when you take phonebill/line rental, overheads,bank charges on lodgements etc. You end up with 1.5% margin. If someone pays for it by laser with the 1% laser charge, you may as well not have sold it at all.
A lot of shops just sell it for the convenience of the customer these days because they make fcuk all on it, doesn't bring in extra people to the shop and doesn't drive other purchases.
To use an ice cream analogy. You understand that a product named after a denomination 'The 99' has risen in price over the years. You know that you either have to charge 1.40 for one these days or make it smaller than it used to be to sell it for 99c. No one sees a problem with this, but charge 5.25 or 10.50 for 5 or 10 euro credit and all hell brakes lose. With the cut in margins, the price to the shop for this product has effectively increased (assuming he wants to maintain a respectable margin) but charging 10.50 for something 'called' 10euro rubs people the wrong way which is strange when there was no outcry over icecream 99's
The Phone companies have it all sown up and no sh1t sticks to them. Did customers see the 7% the companies took from the shops. No, the shareholders did. You still pay the highest per minute charges in the world. They have shafted customers for the shareholders too but they do that by cutting the number of minutes you get for your 5 euro so its nearly invisible to you. The cut the shops were forced to take could not be invisible if they wanted to maintain a realistic margin cause €10=€10 seemples right?
I liken it to the moaners who go into a small local shop and complain that the milk is 30c cheaper in Tesco's. Its fair to say that Tesco's get a slightly bigger discount from the daries with their multinational corporation orders of millions of litres of milk a day than your local shop who gets in 200 litres of milk a week. The shopkeep could get it cheaper in Tesco than the dairies FFS if he was allowed. He shops in Tesco himself where all those 10,20,50c savings on a weekly shop all add up for cryin out loud. It makes sense to make that trip to tesco's when you are saving that on nearly everything cause it all adds up. You pay the extra few cent for the milk in your local shop because you only had to walk around the corner instead get in the car, drive through traffic, find parking, join the big queues. Save a few cent for the milk for your tea/cereal and do all that if you want......but you'll find you wasted half an hour of your life and 25c in petrol for that 30c saving on the milk. He has no choice in charging you more than tesco's and you shouldn't mind paying it because thats why a convenience store is called a convenience store
Ditto with credit. Topup online or at a kiosk if you like but if no other options are available to you at 10pm and you find your shopkeeper open at the end of his 16 hour day, don't fcuking moan about the surcharge. He's doing you a much bigger favour than the phone companies are doing him.0 -
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This is something you are really passionate about :eek::PI am amazed when I hear people say they have never come across this before. I have never been into a shop that didn't charge it.
First prepaid phone cards came out years ago. Shops got 12% to stock them. Then the margin was cut to 10%. Then the shops were told the margin on the cards was being cut to 5% but if you take on the printed phone credit(what everyone uses now) you would keep a 10% margin. As soon as the changeover was complete they cut the printed credit margins to 9%...to 6% and now its only 3%.
Unlike Lotto machines that also have a low margin(5%) there was no geographical/distance exclusion deal. The Lotto promised shops taking it on in the beginning that they would not install machines in another shop within a certain distance of the shop. Thus the shopowners accepted the low margin because the lotto would drive custom in the shop. With phone credit machines in every shop, credit does not drive extra custom. It rarely even drives ancilliary purchases anymore either. Its become such a necessity that people will by it to the exclusion of other purchases, EG kids spending money on low margin credit instead of high margin sweets. A 3%margin barely covers costs when you take phonebill/line rental, overheads,bank charges on lodgements etc. You end up with 1.5% margin. If someone pays for it by laser with the 1% laser charge, you may as well not have sold it at all.
A lot of shops just sell it for the convenience of the customer these days because they make fcuk all on it, doesn't bring in extra people to the shop and doesn't drive other purchases.
To use an ice cream analogy. You understand that a product named after a denomination 'The 99' has risen in price over the years. You know that you either have to charge 1.40 for one these days or make it smaller than it used to be to sell it for 99c. No one sees a problem with this, but charge 5.25 or 10.50 for 5 or 10 euro credit and all hell brakes lose. With the cut in margins, the price to the shop for this product has effectively increased (assuming he wants to maintain a respectable margin) but charging 10.50 for something 'called' 10euro rubs people the wrong way which is strange when there was no outcry over icecream 99's
I liken it to the moaners who go into a small local shop and complain that the milk is 30c cheaper in Tesco's. Its fair to say that Tesco's get a slightly bigger discount from the daries with their multinational corporation orders of millions of litres of milk a day than your local shop who gets in 200 litres of milk a week. The shopkeep could get it cheaper in Tesco than the dairies FFS if he was allowed. He shops in Tesco himself where all those 10,20,50c savings on a weekly shop all add up for cryin out loud. He has no choice in charging you more than tesco's and you shouldn't mind paying it because thats why a convenience store is called a convenience store. You pay the extra few cent for the milk because you only had to walk around the corner instead get in the car, drive through traffic, find parking, join the big queues. Save a few cent and do all that if you want......but you'll find you wasted half an hour of your life and 25c in petrol for that 30c saving on the milk.
Ditto with credit. Topup online or at a kiosk if you like but if none are available to you at 10pm and you find your shopkepper open at the end of his 16 hour day, don't fcuking moan about the surcharge. He's doing you am much bigger favour than the phone companies are doing him.
Fair play though!0 -
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Moderators, Science, Health & Environment Moderators, Social & Fun Moderators, Society & Culture Moderators Posts: 60,110 Mod ✭✭✭✭
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I don't buy it in places with a surcharge. That said I only buy credit about 6 times a year anyway so it's not a thread I could be really passionate about
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Shopkeepers Son Funnily enough the 21 for the 20 does feel like pushing the maintainence of 8% margin too far though, although following my own logic it shouldn't
Sorry that this sounded like a rant at the OP because I didn't mean it that way. Think of it more as a rant against the Phone Companies, the economy and fcuking Tesco's
The phone companies for the reasons posted above.
The Economy because people are cutting back on non essentials, the higher margin stuff like mags and chocolates and spending all their disposible on the low margin necessities like the Lotto, papers, fags and phone credit
Tesco, because the fcukers started selling Chocolates, selection boxes and Easter Eggs and cards. Mothersday, Fathersday, Easter and Christmas are no longer known as 'Die Glucklicke Zeit' in Small shop circles anymore. There used to be Corporate Responsibility in the old days with unwritten gentlemans agreements that they would stay out of the selectionbox, easter egg and card business for the good of local shops. The big multinationals don't give a fcuk nowadays though.
Garages invariably not charging surcharges is down to the fact that they charge more than the average shop for everything else. Spar are a bunch of chancers though. Making it at both ends. Charging more for everything and surcharging the credit too0 -
TeddyTedson wrote: »It's probably mentioned in there somewhere. I didn't read it:D
You were banned from starting threads, not reading threads mate
I think its probably fair to say that the two people who thanked my post are shopkeepers too 0 -
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If it were greed we'd be charging the same surcharge amount for 3pay credit. We don't we surcharge less because they pay us a higher margin. If we were greedy we'd put a surcharge on Tesco Mobile credit and International phonecards. We don't surcharge them at all because they pay us a decent margin. (Now that I think of it, Tesco deserve some credit for that if you'll pardon the pun after the abuse I gave them in an earlier post)
This is not greed. This is not a business trying to maintain a celtic tiger massive markup like some businesses were making 50/100/300% markup on their product. Take my local Pizza place. Best Pizza in the country IMHO. However, you just would not believe the margin on their Pizza's. The 20 euro pizza cost less than 3 euro in ingredients FFS!!
A small business needs to make at least 15% markup just to survive. Between the 5% Lotto 8% Fags and 8% Phone credit (ie the main necessities still purchased in large amounts these days. Yes the Lotto, we're a nation of optimists) and the 21% margin stuff like Chocolate and mags, the average margin works out at about 15%. 15-21% margin is not celtic tiger greed, its the survival minimum for a low volume sales business.
So don't call us greedy bastards for needing a mere 15% to survive or compare us to the purveyors of celtic tiger greed making margins measured in the 100's of percent like the pubs....or restaurants
I have no problem with someone being told about our surcharge and saying, thanks but no thanks, I'd prefer to walk for 20 minutes to another shop or home to topup online to save that 25 or 50 cent or to pay 18% interest on their credit by topping up with their Visa card by text...
Its the people shouting in the shop about surcharging is illegal(its not)...and they know their rights....and we are greedy fcukers. Those are the people I can't stand0 -
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