Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966

 
 

'People' propose 'Cash back for cash'

 


Haines We the People, a local citizens’ advocacy group, has proposed a program aimed at intercepting an estimated $800,000 that leaves the community annually in credit card fees.

At the June 12 Haines Borough Assembly meeting, resident Nancy Berland outlined the group’s thinking behind a potential “cash back for cash” program involving local merchants and consumers.

The group hopes to call attention to, and decrease the “huge amount of money that leaves Haines annually due to credit card use,” Berland said.

About $53.6 million in sales was reported in 2011, with roughly half that amount billed to credit cards, Berland told the assembly, saying the figure was conservative and based on an informal survey of four variously sized Haines businesses.

Her estimate takes into account businesses that don’t accept credit cards and those with a higher percentage of credit card use, such as hotels or inns, she said.

While credit card companies vary in the percentage of sales they take, a 3 percent “swipe fee” is standard, she said.

The cash back program would require both willing businesses and willing consumers, she said. “To make it work we’d need to provide incentives for businesses to participate in the program and to consumers to pay with cash or check.”

She said that participating businesses could give cash-paying customers a rebate. A business with a 3 percent fee, for example, could give cash customers a 2 percent rebate, thereby netting 1 percent.

“I see it as a win situation for all parties involved,” she said, noting that the customers would get money back, the businesses would make more money, and Haines would keep more money circulating locally. “It’s a way to keep more money in town.”

Berland acknowledged Alaska Airlines mileage as an incentive for credit card use, but said that the amount of money customers could receive in rebates can be used to purchase airline tickets. “It’s a choice thing, but it shouldn’t be an issue for a lot of people,” she said.

Berland said Monday that she spoke at the meeting in an effort to “get some support from the assembly,” hoping that they could bring it to the public’s attention. The assembly referred the matter to its commerce committee.

The committee was hoping to schedule a meeting with Berland.

In an interview, Haines Chamber of Commerce president Ned Rozbicki said his group supports efforts to keep money in town, but Berland’s proposal could hit several obstacles.

One is that consumers tend to spend more money when they can charge to a credit card instead of using cash, Rozbicki said. “I hate to see the (credit card fees) leaving town, but most businesses find it’s money ahead taking credit cards,” he said. “(Berland) has to find a way for it to pay for merchants, for it to offset the money that comes in from credit cards.”

Rozbicki also said an arrangement like the one proposed by the group may conflict with agreements businesses sign with credit cards companies that they won’t charge extra for use of credit cards.

The group needs to incentivize businesses and work with businesses to make the proposal a “win-win,” he said. One approach might be to get consumers to agree to spend in town money they typically spend outside or on the Internet, Rozbicki said.