I love coffee shops. I’ve been frequently our local coffee shop, Java Groove off and on for several years now and have found that it’s a really good place to meet clients and friends and also to sit and get some work done (almost as good as the BVRoastery). The coffee is good, the environment is relaxing and comfortable and they have lots of power outlets!
As I was in there the other day, I was paying for coffee with a gift card from my mother-in-law when the owner asked if I had purchased the card or if it was a gift. I told her it was a gift and she said great and reminded me that I could reload the card with money and that if I did that, it could save her money on credit card fees. Which, when you’re buying lots of $2 cups of coffee, can really add up for her and any merchant making lots of small sales. So, I started to think about the cost difference to her comparing 10 cups of $2 coffee. Or, when customers buy $20 worth of coffee.
I’ve done a lot of research into credit card fees recently and while they can vary, I decided to use round numbers. 3.5% and $0.30 per transaction and we’re gonna exclude tax to make it simple.
Case the first: One person buys 10 separate cups of coffee. They pay $20. It will cost the coffee shop merchant $0.37 for a cup and they will make $1.63. Spread that out over 10 cups of coffee and it cost the merchant $3.70 and they make a profit of $16.30. Spread that out over 100 cups and it costs the merchant $37 and they make $163.
Case the second: Another person buys a gift card for $20. That costs the merchant $1 and their profit on 10 cups of coffee is $19. Then, comparing to 100 cups of coffee and the merchant makes $190 and it costs them only $10.
So, by buying gift cards and loading them up in bulk instead of using your credit card for each $2 cup of coffee you purchase doesn’t cost you a thing, but it saves the merchant a lot of money over time – or about $27 over 100 cups of coffee.