Reluctant to go plastic

By Holly Michels

Apr. 12, 2008 (McClatchy-Tribune Regional News delivered by Newstex) --
Paper or plastic?

It's a common question for a clerk to ask after someone makes a purchase at a store, but in Butte it's a query that also comes up at the register.

Several small shops in Butte only accept cash or checks. And in a town where deals are often still made on firm handshakes, that practice doesn't always mesh with modern shoppers' reliance on plastic.

Gene Riordan, co-owner of Maloney's Bar, 112 N. Main St., jokingly said his bar doesn't take cards "because we're in the stone age." The longstanding Butte watering hole hasn't ever accepted debit or credit cards, something Riordan said may hurt business.

"We are losing business, especially since a lot of out-of-towners (use cards)," he said. "We're losing sales of some of our products and clothing." College students will order up a round of drinks and slap down a card, Riordan said. "We have to tell them to run up the street and grab cash at the bank because we don't have an ATM either." Judith Duryea, owner of Dancing Rainbow Natural Grocery, 9 S. Montana St., said she added capacity to take cards after a few years in business. The shop opened in the mid-1980s, and by 1990 customers started trying to use plastic.

"There were more and more people, two or three a week," she said. "I thought, 'Well, geez, I don't want to lose a sale.'" Now, Duryea said, about a third of her customers pay with a card.

Accepting debit or credit cards, while a standard at large chain stores, isn't easy for a small business. Owners must put up hundreds of dollars to buy a processing machine and dedicate a phone line for the unit. On top of that, they are charged a fee for each transaction they process, about 3 percent of the sale total.

"Every time I swipe a card I'm paying money for that sale," Duryea said. "It's a huge expense. It's thousands of dollars a year I put out that doesn't buy anything the customer gets except convenience." She also occupies the store's only phone line for several minute to complete a sale.

At the Phoenix Gallery, 66 W. Park St., customers making higher-end purchases almost always use a credit card, owner Rae Stephens said. She said the gallery has accepted cards since it opened a year ago.

"It's so worth it," she said. "I'm sure if we didn't have it we would have lost a sale." Stephens went through a small bank to buy her machine and said she got a good deal.

To help offset the toll of paying to process transactions, some shops set a minimum purchase amount, usually around $10. That's the magic number owners say is worth paying a fee to process.

"People are coming here and buying a $1 coffee," Glenn Bodish, executive director of the Butte-Silver Bow Arts Foundation, said of the foundation's Venus Rising Espresso House, 124 S. Main St. "If we took a $1 coffee off a debit card, we'd lose money." Venus Rising accepts cards for bills higher than $10, but doesn't have a machine to process orders. Instead, employees manually record card numbers and complete the transaction by hand.

"We can't afford to pay another bill to have a commercial phone line run into the Venus just so I can pay an extra $80 a month to have a credit card machine so you can come in and pay for your $3.25 coffee," Bodish said.

Dancing Rainbow also has a $10 limit, but customers don't notice or don't follow the suggestion.

"Nobody pays it," Duryea said. "It's like I am dictating how people should live their lives." She sometimes explains the transaction fee to customers. "I feel very shy in saying what I say sometimes," she said, but sometimes folks switch to checks.

Stephens said that at her shop tourists, whose dollars boost summer sales, almost exclusively pay with plastic.

"Most people slap down their credit cards," she said. "They might be buying things through a business and use a business credit card or a family that does their vacation all on a credit card to keep track of it." Riordan said Maloney's loses out on summer tourist traffic and is considering taking cards, but isn't rushing to set equipment up.

"We've had people just hounding us to get an ATM," he said. "But the bank is just up the street. We're still an old-fashioned joint." He said eventually Maloney's "will join in the technology revolution, but cash is still king here in Butte." But for Dancing Rainbow, accepting cards is a lifeline for the small shop. "I'd love not to sometimes," Duryea said, "but this is a customer-drive business and I'm so blessed and thankful every day they walk in my door." Reporter Holly Michels may be reached via e-mail at holly.michels@lee.net.

Newstex ID: KRTB-0030-24455405