Support local business -- pay cash

How would you like to give your community a boost, to the tune of 3%?
A one percent sales tax can raise an awful lot of money, so why not put two to three percent back into your local economy when you can do so at no cost whatsoever?

How? Save those credit cards for mail order and online purchases, and pay for your local purchases with checks or cash. Merchants typically pay a commission of around 3% on credit card purchases; that's 3% of the gross, mind you, so on a narrow-margin business those credit card fees take a serious bite.

To be sure, there are cases where you will want to be able to take advantage of the consumer protections and benefits offered by many cards, most notably the ability to refuse payment for defective merchandise and services improperly performed. But do you really need those protections when buying groceries, or picking up Chinese takeout? And how much do those payback schemes really give you, whether in cash or in increasingly unusable airline miles? One percent perhaps, if you are lucky -- though it's proven sufficient to enlist consumers as enthusiastic tax collectors for the credit card companies, imposing a levy on their own communities that is more regressive than anything imposed by their government (even sales taxes normally exempt food, and sometimes clothing).

So don't just buy local -- pay in cash. Think of it as a 3% tip which costs only 1%. And rest assured, in small shops and restaurants, payment in cash (or by check) will be noted, appreciated, and likely eventually rewarded.

Posted by David on June 6, 2006 10:01 PM