Phone credit surcharge

Noelie

Guys you are being unfair to Superscouse, It's obvious you don't actually know how shops work and what profit margin is required to keep a shop open, no matter what superscouse has replied with you have just brushed it off and said he is profiteering, I can vouch for him that the profit made on topups negligable.

Other products get away with this because the price is not printed on the packet, Everything has gone up in price in the last few months due to increases in cost of oil and flour. these things have gone unnoticed because the price is not printed on the packet.

The Phone companys could easily keep the profit margin on the topups the same for retailers and increase the cost of making calls, but that would put the light onto them as the people profiteering but they haven't as this way they can say it's nothing to do with them it's the store onwers.

If you don't want to pay the extra charge walk to the nearest ATM and top up.

thefinalstage

Noelie wrote: »

If you don't want to pay the extra charge walk to the nearest ATM and top up.

Done deal and the shop will lose what "little" profit it would have gotten from us.

Cabaal

thelastangryman wrote: »

Done deal and the shop will lose what "little" profit it would have gotten from us.

Exactly my point, and they'll also lose any chance of making any more sales from the potential customer (eg: buying a can of coke or a box of chocs etc)

superscouse has his views on this and his entitled to them, I personally don't agree with them, I know how shops and pubs are run my family ran both for 75 years.

This is just going to be a endless argument

Noelie

agreed.

eth0_

Come on...i'm sure most shops make only a couple of euro a day from selling phone credit! Almost everyone I know now tops up online or at the ATM..

Hitchhiker's Guide to...

or through text message. It's going the way of flights after ryanair's website

phasers

not true, teenagers and older people all tend to buy credit in the shops, myself included

it's just a matter of buying in a shop that doesn't charge the extra 50c, no big deal at all

Tipsy Mac

Anyone who chooses to purchase phone credit in a shop that charges a surcharge is an idiot and deserves to be ripped off, there's plenty of places that have no charge ie all AIB/BOI ATM's, all Post Offices and all Voda/O2/Meteor stores, I don't think there's a town in Ireland that doesn't have either one of these options available.

paconnors

i used to work in a taxi office and we used to supply call credit, The Rolls of paper that is supplied to shop are provided free of charge by the phone credit supplier.

tippbhoy

Cabaal wrote: »

Exactly my point, and they'll also lose any chance of making any more sales from the potential customer (eg: buying a can of coke or a box of chocs etc)

superscouse has his views on this and his entitled to them, I personally don't agree with them, I know how shops and pubs are run my family ran both for 75 years.

This is just going to be a endless argument

I don't think you really do know how they are run based on some of your comments.

If we talk about any random product (not surcharge cos it is price marked not that the theory should really make a difference)
Product costs 90c and i sell for 100c, if the product increases by 5c, should i sell it for 100c, 105c or more than 105c? With your 75 years of experience it should be no problem for you to answer this if you understand the few basic principles that the family business would have been run on.

tippbhoy

paconnors wrote: »

i used to work in a taxi office and we used to supply call credit, The Rolls of paper that is supplied to shop are provided free of charge by the phone credit supplier.

Tha above is only in certain instances. Anyway, the move is away from terminals to virtual clients on the till, the phone companys won't pay for till paper.

thefinalstage

tippbhoy wrote: »

I don't think you really do know how they are run based on some of your comments.

If we talk about any random product (not surcharge cos it is price marked not that the theory should really make a difference)
Product costs 90c and i sell for 100c, if the product increases by 5c, should i sell it for 100c, 105c or more than 105c? With your 75 years of experience it should be no problem for you to answer this if you understand the few basic principles that the family business would have been run on.

They didn't increase the price just lowered your percentage.

tippbhoy wrote: »

Tha above is only in certain instances. Anyway, the move is away from terminals to virtual clients on the till, the phone companys won't pay for till paper.

You don't give out receipts?

tippbhoy

thelastangryman wrote: »

They didn't increase the price just lowered your percentage.



You don't give out receipts?

you're taking the p1ss at this stage surely?

How nice of them to "lower my percentage" while at the same time increasing theirs. You wouldn't last too long in business with that approach. Why don't you answer the question. The reality is rather than increase the cost of phone calls they have attempted to cut the margin offered to the reseller.

I remember the price of a pint used to be under £2, why didn't they just "lower my percentage" as a publican and everyone would be happy in the intervening years :rolleyes:

Not for every transaction, receipt paper is a variable, more top up receipts is more paper usage. Anyway i don't give out anything, i don't work in a shop.

thefinalstage

tippbhoy wrote: »

you're taking the p1ss at this stage surely?

How nice of them to "lower my percentage" while at the same time increasing theirs. You wouldn't last too long in business with that approach. Why don't you answer the question. The reality is rather than increase the cost of phone calls they have attempted to cut the margin offered to the reseller.

I remember the price of a pint used to be under £2, why didn't they just "lower my percentage" as a publican and everyone would be happy in the intervening years :rolleyes:

Not for every transaction, receipt paper is a variable, more top up receipts is more paper usage. Anyway i don't give out anything, i don't work in a shop.

You won't survive with that attitude.

They are still making a profit even without increases just less. Unless they exclusively sell credit than a cost increase is bad business practice.

parsi

thelastangryman wrote: »

You won't survive with that attitude.

Interesting point. The publicans have been doing that for many many years - Guinness puts up the pint by 3p and the publicans add another 2p to preserve their margin. The older folk may remember this breakdown being regularly given on the news whenever the pint rose.

tippbhoy

parsi wrote: »

Interesting point. The publicans have been doing that for many many years - Guinness puts up the pint by 3p and the publicans add another 2p to preserve their margin. The older folk may remember this breakdown being regularly given on the news whenever the pint rose.

The point i have been trying to make is that shops are preserving their percentage margin by increasing above €10

The point lastangryman seems to be putting across is that the product should only have increased by the amount that the supplier increased the product by. This is not one of the funamentals of how any business works and for a bigger outlay the business needs a bigger return. This is the case for all products but people not in the know here seem to think this is a rip off. It only appears to be a rip off because you are getting 10 euro of credit for more than 10 euro and it is a price marked product. The exact same thing has happened bread, milk, and just about every food the last quarter. If the supplier ups by 10c, the retailer will increase in proportion to maybe 12c. The retailer now makes 2c more on a loaf of bread that he used to, higher margin, same margin %, same increase in proportion (just as you stated earlier lastangryman)

Seeing as my last question didn't get answered, here's another. If i sold a car costing 10k for 11k making a profit of 1k, what should i sell the same car costing 11k for e.g. went up in price in 2008?

I'll answer it myself because i have a feeling the people i want to answer this won't as it won't suit their stance on this. The stance of some would be 12k "the supplier increased their return but that is the retailers loss". The answer is 12,100. Is this gouging as was referred to earlier??? Simple answer = no. Who is going to pay the bank manager the extra interest on my overdraft now as i have to indebt myself another 1k. What if i never sell the car, I'm now left with an 11k dud product and not what was previously a 10k product. How am i going to offset that risk, by increasing my return that's how. I still am only taking the same margin %. That is an increase in proportion.

This is the same as the phone credit.

thefinalstage

tippbhoy wrote: »

Seeing as my last question didn't get answered, here's another. If i sold a car costing 10k for 11k making a profit of 1k, what should i sell the same car costing 11k for e.g. went up in price in 2008?

Not an accurate example as a shop sells more than credit and the sale of credit brings in once off customers who may buy other things. You would sell the car for 12k to preserve the margin. The point here is that the credit has not gone up to 10 euro 50 cent. It costs you the same to acquire the means to dispense credit you just get slightly less return.

astrofool

If the price of a commodity goes up to the retailer, then the retailer is within their rights to charge more for it. This goes for every item in a shop, from coca-cola to the phone credit. You don't expect a petrol station to absorb the price increase in petrol do you?

Vodafone/O2/Meteor are looking at their business and trying to maximise profit, mobile phone sales have plateau'd so they have to do this somewhere, so are now hitting the customer/retailer. Now, if no one ever bought credit with this surcharge, then the laws of supply and demand dictate that the price will drop, either by the retailer taking less profit, or by the phone company charging less (they also lose out by people not buying their credit).

Besides, don't think of it as €10 credit, it's an exchange system for mobile usage units, and some place offer better rates, others worse, if you buy it direct (bill pay) it's even cheaper again. You certainly don't expect the price of milk to be the same in Dunnes as it is in Centra.

ScouseMouse

Here here. Unfortunately there are a lot of short sighted people around who just see the retailer is to blame....

dahamsta

superscouse wrote: »

Here here. Unfortunately there are a lot of short sighted people around who just see the retailer is to blame....

Sorry, but the misuse of this phrase drives me demented. It's "hear hear".

tippbhoy

thelastangryman wrote: »

Not an accurate example as a shop sells more than credit and the sale of credit brings in once off customers who may buy other things. You would sell the car for 12k to preserve the margin. The point here is that the credit has not gone up to 10 euro 50 cent. It costs you the same to acquire the means to dispense credit you just get slightly less return.

while i'd admit the commodity of the car is not an ideal analogy (my earlier €1 example was much more practical comparison) the end result is still the same.

I think you have failed to comprehend that the cost of the credit has increased, therefore your statement "It costs you the same to acquire the means to dispense credit you just get slightly less return" is completely incorrect. I can't quote the exact figures but lets say it was €9 cost, it is now €9.30. That means it has cost me more to buy the product to sell it to you. Maybe the fixed costs have stayed the same but the variable costs and indirect costs have increased hugely.

This is so basic stuff i'm nearly worried i'm missing something because I can't see where peoples problem is with this simple economic principle.

Is your view that the phone credit should be a loss leader and retailers are not entitled to maintain profit when the phone company increases theirs as it will affect the consumer and it's tough luck to the retailer If so, why only on phone credit? Why should the retailer not do the same thing on cans of coke? What not boycott the phone provider? I'll tell you why, you perceive the service as costing nothing and should be given away as such, when this is in fact not the case as has been clearly outlined in previous posts. The reason that retailers have it in the stores is not just for additional sales, it is a big part of it but costs must be covered or it's not worth even having it.

A virtual product is still a product and should be treated the same.

This reminds me of a story i heard many years ago.
Escalator breaks down in Macy's NY xmas week. The store will lose millions in lost trade per day if they can't get it up and running. One company can have it fixed in 12 hours but will cost 10K. Another guy can fix it within the hour for 20K. As they are losing millions a day, they take the quickest guy. He fixes the issue within 30 seconds of arriving. The manager aghast refuses to pay 20K for a 30 second job and instructs him to switch it back. The manager isn't going to be ripped off by anyone.

Some people are never happy.

PhilipMarlowe

thelastangryman wrote: »

...a shop sells more than credit and the sale of credit brings in once off customers who may buy other things. It costs you the same to acquire the means to dispense credit you just get slightly less return.

If a retailer doesn't protect their margin, they are an idiot and doomed to failure.
It's a quite simple proposition really.... if you are not profitable, the business will fail.

Also, if the figures here are accurate then the cost has increased by about 7% in a few years.... Would anyone do an extra 3 hours work every week for the same wage (stay till 8 on a friday evening say)?

The point about it being just another product and shure couldn't you nearly sell it at cost is hot air too....

Tipsy Mac

Same with the consumer, if they pay this additional price when there are many many easily available alternative points of sale without this charge they are idiots and doomed to failure .

IncredibleHulk

Tipsy Mac wrote: »

Same with the consumer, if they pay this additional price when there are many many easily available alternative points of sale without this charge they are idiots and doomed to failure .

Simple. Ask how much a 10/20 whatever top up is. If the reply is more than the top up say no thanks. As far as I am aware the shops are obliged to have a sign to alert customers to the surcharge before they approach the point of sale but I may be wrong

JohnC.

IncredibleHulk wrote: »

Simple. Ask how much a 10/20 whatever top up is. If the reply is more than the top up say no thanks. As far as I am aware the shops are obliged to have a sign to alert customers to the surcharge before they approach the point of sale but I may be wrong

The only times I recall seeing signs is in some shops informing people that they don't have a surcharge.

ScouseMouse

no a shop does not need to have a sign. However, when someone asks for a topup, we quote them the price and wait for approval to go ahead. Most people say yes, some say no thanks and others get stroppy and demand to know why. One ejit even said to me "I thought we had stopped you doing that!"

IncredibleHulk

no a shop does not need to have a sign.

OK wasn't sure

However, when someone asks for a topup, we quote them the price and wait for approval to go ahead.

The person can say yes or no politely no need to be stroppy. But I think there should be a sign because sometime you have to wait in a q to ask. That said I now know most of the places who charge and avoid.I do not buy anything at all in such shops.

A true story: I was in a shop one day and a girl I know was at counter. She bought cigatettes, several ice creams, couple bottles of orange about 12 euro I'd say. Then she asked for a ten euro top up and when asked for 10.20 she told him to keep it all,cigs,orange, ice cream and walked out. And I thought good for her

cast_iron

Licksy wrote: »

If a retailer doesn't protect their margin, they are an idiot and doomed to failure.

And that is the long and short of it, really.

Alot of people complaining here don't appear to have a basic understanding of either Maths or Economics.

JohnC.

cast_iron wrote: »

And that is the long and short of it, really.

Alot of people complaining here don't appear to have a basic understanding of either Maths or Economics.

Is it really worth losing customers (like those above) for the sake of a few cents?

thefinalstage

cast_iron wrote: »

And that is the long and short of it, really.

Alot of people complaining here don't appear to have a basic understanding of either Maths or Economics.

Ah yes, the condescending attitude that will win the business of others.
You obviously have little understanding of business.