What is the logic behind this? --RANT

[BrerGnat]

Okay, so today I went to my local Coldstone Creamery to purchase an ice cream cake. I went to pay with my Bank's ATM/Debit MasterCard Check Card, and the guy behind the counter informed me that "the owner won't let us take debit cards anymore...sorry...do you have a credit card?".

So, sort of dumbfounded, I looked at the sticker on the window, which was showing the Visa/Mastercard logo, and I looked at the card, which CLEARLY has a MasterCard logo on it, and I told the guy, "just run it through as a Mastercard...that's why it has that logo on it." And, the poor guy was just a kid, and he was new on the job, so I was trying to be patient with him, but I was a bit irked about this, as I had JUST been in this same store on Thursday to buy an ice cream for my son, and I paid with this EXACT card, no problem. So, the kid says "I'm sorry, I was told no debit cards, even check cards...if it was my store, I would totally take it(this made me smile, the way he said this)...do you want me to go ask my manager?" So, I said "yes, I would."

So, he goes in the back, and comes back out, and tells me that he cannot take it. So, I dig out my OTHER Mastercard, and hand it to him, and then following a long process whereby the card reader machine decides to error in the middle of the transaction, I finally left with my cake, close to 20 minutes later.

Now, besides the fact that I am miffed that after all the hassle I was put through having to have them run my card over and over again, and then sit there while they called the machine company AND the card company to make sure there were no duplicate charges on the card, etc. that they STILL charged me for the cake, and didn't even offer a discount of any sort (all I got was the kind of "I'm sorry" over and over again, from the poor kid, as though I was going to have him beheaded for this...), I can't help but wonder, WHY would the store owner decide NOT to accept an ATM Check card with a Visa/MC logo, BUT continue to accept Visa/MC credit cards? What is the logic in that? Is there a sound business reason for a decision for this that I am not aware of?

The reason I ask is, now I am going to end up paying interest on that stupid cake (which was my cake, by the way, for my own birthday, that I am celebrating by myself, so I wanted to treat myself) because I was forced to use a credit card instead of my check card, and unfortunately for me, I have a balance on that credit card that I cannot pay off in the next month. If I had known, I would have paid cash. However, I didn't have cash (due to my experience 4 days prior, in which I was able to use said check card to pay for the ice cream). I had my two toddlers with me, and going to the bank to get cash was not an option, because I had paid for half the cake with a giftcard JUST before all this credit card drama went down. I just wanted to get out of there, with the cake that my 4 year old was very much looking forward to (and for those of you who know, my 4 year old is autistic, and it was just NOT an option to walk out of there without that cake, after I had told him we were getting an ice cream cake, because that would have resulted in a meltdown of epic proportions that, frankly, I just didn't have it in me to deal with today).

So, as much as I wanted to tell the owner (who was right there, by the way) what I thought she could do with her cake, I exercised restraint this time, because for all I know, there is a very legitimate reason why she made that decision.

Can anyone provide some insight into this? Has anyone come across this sort of thing? The only thing I can come up with is some sort of paranoia about failing banks and the business owner thinking she will not get her money if it comes from a Visa/MC issued by a bank. I mean, that's completely ridiculous, because those transactions happen pretty much instantly, but who knows?

[Ian]

Sheesh ... I gotta be honest ... I think that guy is totally out to lunch. As far as I know, if you accept Visa or Mastercard you have to accept Visa or Mastercard branded debit cards. I bet if you had called your bank right there they would have forced him to take the card.

I mean there probably isn't much you can do about it now. I most likely would have just said, "Well you have two choices ... either I'm paying with this card or I'm leaving with your cake without paying, because this is the only method of payment I have with me and I am not leaving without my cake." and then just waited to see what happened.

Bottom line, though, is that I would no longer frequent that store and I'd tell them why.

[Alligirl]

I had my two toddlers with me, and going to the bank to get cash was not an option, because I had paid for half the cake with a giftcard JUST before all this credit card drama went down.

I think it might have to do with your using a gift card?! I know that when I have used a gift card for part of the price then I have to use cash or check for the rest.
I dont understand why they won't take a regular debit card otherwise though. I mean as far as I have heard the retailer pays a bank fee for credit card transactions so isn't it cheaper for him to take the debit card?
Sorry you had such a hard time!
Happy Birthday!

[pixiesmimi]

From a retailer's standpoint, there was no reason for the manager to reject the card. His machine may have no longer been set up to take debit cards, for some reason we don't know about (cc/debit card machines are two separate things), but because it was a MC/Visa debit card, it could be run just like a regular credit card. The fees for the store for a debit card is less than a credit card. It is possible that he had a new machine that wasn't set up for debit cards but from my point of view, I would have rather taken it than a check. They go through instantly and you get your money faster.

I would have insisted they run it and when it went through, would have gloated about it. But in light of the fact they refused it, I would have told them that I was going to go ahead and get the cake for my son's sake but I would never be back and would also inform all of my friends not to do business with them again because of all the trouble. That is the fear of most retailers, the fact that you will go out and tell all of your friends not to do business with them. All it takes is one customer spreading the word and your business can take a big hit. This manager obviously didn't know what he/she was talking about. I think I might have gotten the company number and called it to complain.

[offwego]

It's just a thought but it may be because the fee on credit cards is a percentage (normally between say 2.5 to 5 cents on the dollar) and the fee for debit cards is a per transaction (often as much as 15 to 25 cents per) while I'm not sure how much an ice cream cone is I'm guessing it's less then 3 dollars and the per transaction fee issue may be getting to his bottom line. (I have no idea what impact using your debit card branded as a mastercard has on the fee structure in Canada it's either a debit card or a credit card we have no credit card branded debit cards..but then we only have a few large banks so there really isn't a logo issue for retailers)

[LauraF]

Merchant fee problems would have my guess if it had been the credit card they were refusing to accept, but not the debit card.

However, one thing nobody mentioned was fraud. That's why the large car rental companies and the like don't take debit cards - risk management on bank accounts is not at the same level as on credit cards. Now, the merchant fees (which go to things like fraud protection) are not applicable on a debit transaction, so said merchant has very few ways to get their money back if a debit card deadbeat happens to shop there.

But whatever the issue was, that was simply poor customer service on the part of that store. The kid was obviously out of his depth, without the authority to make anyone's life easier. That's the store manager's role.

I work in this industry, so the best thing you can do is call the customer service line for the main company and talk to them, in a politely irate fashion (screaming just gets the smile and nod) and they should then pass it along to the regional field manager or other local person who can talk to the franchisee/owner.

[BrerGnat]

Sheesh ... I gotta be honest ... I think that guy is totally out to lunch. As far as I know, if you accept Visa or Mastercard you have to accept Visa or Mastercard branded debit cards. I bet if you had called your bank right there they would have forced him to take the card.

I mean there probably isn't much you can do about it now. I most likely would have just said, "Well you have two choices ... either I'm paying with this card or I'm leaving with your cake without paying, because this is the only method of payment I have with me and I am not leaving without my cake." and then just waited to see what happened.

Bottom line, though, is that I would no longer frequent that store and I'd tell them why.

See, that's what I thought. I thought that if they sported the Visa/MC logos on their doors, and I handed them a card with said logos on it, they HAD to take it! I mean, duh!

I was pretty irked, to say the least, but I just smiled that Mona Lisa smile because if I hadn't, I would have LOST IT in there, and I wasn't about to do that in front of my kids. I try to be a better person than that. If my kids hadn't been with me, though, I would have demanded the money returned on my giftcard, left without the cake, and gotten on the phone with someone "up the chain" at Coldstone right then and there, on my cell phone inside the store, to voice my displeasure at what had just transpired. This is not the first time I have had a less than stellar customer service experience at this particular store, but that last time was a couple of years ago, and I decided to let that go, because, frankly, the location is convenient for us. However, it is not the only location in our city, so we will go elsewhere from now on...

[SBETigg]

I know it does cost merchants more to accept debit cards than credit cards, as someone else mentioned. But I think it's marginally more, not a bank-breaking sum. And really, I think the risk of losing business is more than the small extra fee for taking a debit card. He could have simply asked if he could run it through as credit. You might have been just as peeved, but it would have been far less hassle. You can do both functions with the same card. I think it's weird they would be like that, and a sorry state of affairs. But happy birthday! I hope you enjoyed the cake and had a good day after all that happened.

[Mousefever]

I know it does cost merchants more to accept debit cards than credit cards, as someone else mentioned. But I think it's marginally more, not a bank-breaking sum. And really, I think the risk of losing business is more than the small extra fee for taking a debit card. He could have simply asked if he could run it through as credit. You might have been just as peeved, but it would have been far less hassle. You can do both functions with the same card. I think it's weird they would be like that, and a sorry state of affairs. But happy birthday! I hope you enjoyed the cake and had a good day after all that happened.

I've always thought it was the other way around. That is why Costco accepts debit cards and not all credit cards. Some gas stations won't even accept credit cards, only debit cards. My understanding is that the merchant pays a set fee for accepting a debit card, but pays a percentage of the sale for a credit card.

That may be the problem, actually. If the debit card fee is often more than the percentage amount on a typical Cold Stone sale, that may be why the owner won't accept debit cards.

[SBETigg]

I think you're right, Mousefever. I probably got it confused. In that case, I still think it's bad business and there's not much of an explanation that makes sense.

[Mackflava99]

In reality I would call your credit card company and protest the charge for inconvienience- they will deal with the Coldstone person-
Credit card companys like to go after bad vendors.

[pixiesmimi]

I've always thought it was the other way around. That is why Costco accepts debit cards and not all credit cards. Some gas stations won't even accept credit cards, only debit cards. My understanding is that the merchant pays a set fee for accepting a debit card, but pays a percentage of the sale for a credit card.

That may be the problem, actually. If the debit card fee is often more than the percentage amount on a typical Cold Stone sale, that may be why the owner won't accept debit cards.

It is the other way around. I was estatic when I was finally able to get debit card on my cc machine because it was a lot cheaper in fees and I got paid within a day or so when it took almost a week with cc. You can challenge your cc charge with your cc company and they will do a charge back and the merchant has to dispute it or prove it is wrong or they have to refund the money. No more than the purchase amount probably was, it isn't worth his time to dispute it. This happened to me in my business when a customer made up something about bad service, which wasn't true, and they did a charge back against me with it.

All in all, the manager should have stepped up and should have known what was going on with your purchase. Sounded like he didn't want to be bothered. If the shop has a MC/Visa sticker on his door or window then he can't refuse to run your debit card as a cc. We would do that all the time when the person didn't want to use their pin number and it still goes through as a debit on the other end. I would send in a complaint about the store and then just not do business with them any more as long as you have somewhere else to go.

[tinksmom02]

Happy Birthday! Sorry you had to go through such a hassle. Cold Stone has a website; I'm sure you could find a customer service # if you wanted to let higher-ups know about your experience. (And you're lucky if you have another CS in your area; we have one, twenty minutes away, in the county).

[BrerGnat]

Just to clarify, I never even wanted to run it as a debit card in the first place. I always prefer to run it as a credit card, just so I don't have to enter my PIN while juggling my 2 year old on my hip and trying to hold my 4 year old's hand.

It's a lot easier to sign the charge slip, than to have to try to wrangle the little machine with all the numbers away from said 2 little monsters, while making sure I enter in the correct PIN, before they have a chance to hit any buttons.

I simply asked the guy to run it through as a Mastercard. Like, three times...I told him "Ignore those words on the top that say ATM/Debit card and just run it through as a Mastercard." He just wouldn't do it.

And, the Manager on duty of the store did come out from the back, and she wouldn't even speak to me. She tried to pawn it all off on the poor kid.

Truly, poor customer service all around, except for that kid. Honestly, I think it was his first day, and I really think he probably went home and cried after his shift. I feel badly for him. If I were him, I'd quit. I'd hate to work in that atmosphere...

[pixiesmimi]

And, the Manager on duty of the store did come out from the back, and she wouldn't even speak to me. She tried to pawn it all off on the poor kid.

Truly, poor customer service all around, except for that kid. Honestly, I think it was his first day, and I really think he probably went home and cried after his shift. I feel badly for him. If I were him, I'd quit. I'd hate to work in that atmosphere...

I think I would contact the company or owner and complain about the manager. These managers are just regular people and don't always do the right thing in their job and more times than not, pawn it off on the poor kids working under them and make it all look like their fault. The kid would be the first to get fired, no the manager. No one ever knows what kind of job the manager is doing unless someone complains or compliments them. I have a DGS who just started working in the fast food industry and believe me, they get thrown to the wolves out there, especially when they just start working. This has happened to him and he has come home so mad and ready to quit because of some of the things that the manager has done or not done. They try to blame everything on him to make up for what they aren't doing. Fortunately, we know the owner and have encouraged him to speak up if things get really bad and he thinks he is being targeted. Not that he should complain all the time. We do tell him to **** it up and do his best and just do as he is told or taught but when it is just unjustified, we encourage him to stand up for himself without getting himself fired. He is learning and there have been a few managers either moved or let go because several of the workers have started standing up for themselves and refuse to be taken advantage of. Of course, we tell him that he needs to take instruction and learn and show respect to management, etc. but when things like race or youth or prejudices come into it, then he is encouraged to speak up by going to the manager first and if it doesn't get better, to ask for a transfer, etc. When the owner gets involved, it usually straightens itself out. I have warned him that he is prone to getting fired if he shoots his mouth off or talks back, etc. but he doesn't have to be a door mat and take the blame for everything that others do wrong. He is really learning life's lessons. I sympathize with the boy in your case and hopefully a few more people will complain and get it straightened out. I'm wondering if he just misunderstood about it being an ATM/Debit card instead of understanding it could be used as a cc also. Most young people don't understand how this works. (Even my mother doesn't understand the difference.) It is just too bad all of this happened this way for you and I imagine it has happened to others, also. I wouldn't hesitate to go to their web site and complain.

[Mufasa]

Unfortunately, and confusing for consumers is that retailers are no longer required to accept a Visa/MC logo debit card as a condition of them accepting Visa/MC credit cards since January 1, 2004 as a result of an antitrust lawsuit launched against Visa/MC, challenging the "Honor All Cards" rules they had in place.

If you notice these days on debit MCs for example by the logo, you'll see that they clearly and boldly spell out debit on the front of the card so retailers can differentiate debit cards from credit cards for this exact reason as part of the settlement of this lawsuit.

What led to this lawsuit was the complaint from retailers like Walmart that they were being forced into accepting signature debit transactions (which were at a higher fee than PIN based transactions which could be carried on a separate/local network outside of Visa/MC) as a condition of being able to accept their logo credit cards.

Technically that Cold Stone store is within their right to refuse to accept a debit MC, even though it has a MC logo on the front and only accept a credit card, though it does make for poor customer service and confusion although it's the first time I've actually heard of a store separating out debit from credit.

[Jen C.]

I think Baskin Robbins and Dairy Queen have better ice cream cake anyway....

I would NEVER go there again. I would call the store and force the manager to talk to me. I'd give her one last chance to gice me free stuff for my trouble, and then I'd go to pick up my free stuff, and while there tell her I'd never be returning....

Totally unacceptable. Bad business.

[BrerGnat]

Mufasa: Thank you for your reply. This is exactly what I was wondering about. I wanted to know if there was a SPECIFIC reason for being able to differentiate between choosing to accept a MC credit card and not accepting a MC debit card. That clears that up for me.

I completely sympathize with business owner's rights to run their business the way they choose to. I understand how credit card fees can play into the decisions to accept/not accept certain types of payments.

What I do NOT sympathize with is bad customer service. AND, furthermore, if a business owner chooses to make a decision regarding which types of payments he/she will accept, it should be CLEARLY STATED somewhere obvious withing the store. A sign will suffice.

[Minnie Imagineer]

Happy Birthday!!

My best friend works at cold stone and I just called her and she said her cold stone takes debit...but I do know that her manager is very mean, maybe its a cold stone meanager kind of thing....they are very unflexible with scheduling!

....but I do get some cheap ice cream...

[Jasper]

Mufasa: Thank you for your reply. This is exactly what I was wondering about. I wanted to know if there was a SPECIFIC reason for being able to differentiate between choosing to accept a MC credit card and not accepting a MC debit card. That clears that up for me.

I completely sympathize with business owner's rights to run their business the way they choose to. I understand how credit card fees can play into the decisions to accept/not accept certain types of payments.

What I do NOT sympathize with is bad customer service. AND, furthermore, if a business owner chooses to make a decision regarding which types of payments he/she will accept, it should be CLEARLY STATED somewhere obvious withing the store. A sign will suffice.

At my wife's costume store we do not accept plastic of any kind because our average ticket price is not high enough to cover the costs. However in exploring the idea we learned an awful lot about the whole process.

1. The business owner may be working directly with Master Card for card processing or they may be working with an outside service or a bank. This allows the business to accept more brands of cards on the same system.

2. Each card processing service can charge whatever fee they think the market will bear for processing. When using a private processing service or a bank the fee is usually a little higher than working directly with Master Card because they have to pay Master Card's fee and also make some money for themselves. However, when processing directly with Master Card you can only take Master Card products unless you sign up individually with each brand of card.

3. Card processing companies negotiate fees with each individual business that they set up. That means two business that are completely identical and are located next door to one another can have different card processing fees.

4. Card processing companies can, and do, change their fees and their card rules without advance notice to the business. This is why you sometimes see sudden changes at your local retailer.

5. There are some rules out there about how card processing can do business but they do still have a lot of freedom to do what they want.

The bottom line is that without knowing what this retailer negotiated or what changes the card processor made it is almost impossible to know why this store did what it did.

However, none of this excuses the horrible customer service you received! There should have been much better training, the manager should have stayed come out front with the kid and talked to you about the problem, etc.

By the way, I had to chuckle at your comment about the sign. While agree that it is a good idea, it doesn't always work. As I mentioned at the outset my wife's costume store does not accept any plastic of any kind. My wife has several large signs posted around the store stating the plastic policy, including two large, bright yellow ones at the register. Yet, several times each day people pull their cards out and are surprised when we tell them we don't accept them.