Downtown Alexandria. Relatively rich part of town. Small family owned sandwhich shop. I'd estimate near 90% of it's business comes from the businesses that surround it.
They do not take a credit card or debit cards of any type.
They only take cash.
They have a small mini-atm in the corner which charges $2/withdrawl.
They operate the ATM themselves, I've watched them open it up and put money in it. It's so small and cheap looking that my guess is they outright own it.
Do the math.
Credit cards cost a fraction of a percentage of each transaction. For high dollar items that adds up. For a $6 sandwhich, it's pennys. Debit cards cost roughly 35 cents per transaction. It's becomming as common to not have a landline at home as it is to not carry cash-- I almost never have cash on me ever.
If every 4th customer withdraws cash from the ATM, they would have to up the price of their products by 75 cents to exceed the potential profit they get from the ATM vs. if they offered credit cards or debit cards. If they offered both of the latter, the ATM in theory would get near-zero business. I doubt any customer would agree to pay a $2 surcharge on that $6 sandwhich, but most seem to ignore the $2 fee that comes with getting $20.
All of the sandwhich shops within walking distance refuse to take credit cards.
The question remains how much of that $2 goes to the sandwhich shop. I had a friend who used to lease ATM's to these sorts of locations, and in that case the place got a cut, something like 50 cents. It was sizeable, and competition to draw a contract with my friend was in the amount of money they got. This was at a Sports Bar in michigan. I maintained the computes for the owner who was also a friend of mine, and I remember one time the ATM went down on a friday night and he was furious. I asked why and he said "You don't want to know how much money we make from that thing evey night." ...
So, maybe it's not greed. But to me it's a question of ethics. And this -convenient- little trap operating under the pretense of poverty with such slim profit margins as to excuse a lack of credit card + debit card acceptance is ridiculous.
The proof is in the pudding: Were I the owner of such an establishment, would I change any aspect of this? Only in maximizing the amount gained from each ATM transaction, of course.
Businesses have a right to make money, but in doing so they may not rip people off or commit fraud. The latter is easy to expose. The former? What exactly is being "ripped off" ? That's a matter of opinion, and it is in a businesses best interest to try and get that price to rise. It is in the customers best interest to get that price to lower.
The prices are rising. Here's a publication from six years ago demonstrating as such.
The only thing that will slow this trend is being aware of it and not putting up with it.
To me, Galen's desire to ignore it is exactly why it's growing.
This class action lawsuit is certainly interesting: http://money.cnn.com/2004/08/19/pf/atm_fees/
Of course this problem also is rampant in other parts of the world, except their governments are stepping in to halt it.
Ours however step in and support it. And pass laws that prevent states from banning the fees. http://www.stopatmfees.com/latest.htm