Credit Cards + Gun Shows

[TXBob]

I don't know if its just that we use credit cards more or if its a real trend, but it seems EVERY retailer in the firearms trade adds 3% to their prices while at a gun show.

While I realize that firearms often operate on thin margins, and I don't begrudge people making money, why is it only firearm retailers that do this?

I don't go to the jewelry store and see this. Or the grocery store. What gives with this trend (yes i know--pay with cash--just curious as to what is going on).
...
On unrelated note, if any of you ever see me at a gun show in on of those hoverounds. Shoot me. Right there.

No LMT MWS and too many Kimbers at gunshows make TXBob very angry......

[Sry0fcr]

I think they'd do well to offer a 3% cash discount. ;)

[TXBob]

Lol no joke (hey if you're gonna charge for CC at least "spin it")--I'm not complaining so much as I am curious. Makes it tough if I find a steal on a big name item (*cough SCAR-H*) and I don't have my checkbook (another thing that seems to be going out of fashion--no checks!--yeah I got $2500 in my pocket for the Rifle--just a sec...)

I was actually under the impression that it was illegal (possibly misinformed--it stems from being a youngster and the AMOCO "pay with cash, save on gas" slogan and hearing a news story--but then again I was like 6) to charge more for credit.

I know it does actually cost a fee for the retailer--just seems only firearm folks actually do the price difference. Maybe Grant or one of our retailers can give us the skinny on what gives with this. I'm not sure how the whole thing works on the retail side.

[CarlosDJackal]

The profit margin for most firearms sales is pretty slim. Let's say that it is right at 5%. If 3% of that goes to the CC company, how many dealers do you think can keep going to Gun Shows?

If any dealer was to offer a 3% cash discount as suggested, it means that they will probably have to raise the listed price by at least 3% which would mean that they are guaranteed to loose a lot of business to the other dealers who list their prices at the MSRP.

Remember, those guys aren't there to loose money or go out of business.

[TXBob]

I think its that first part that would be important--if the margins are as you say, then yeah there's not much room and generally no big makeup items that other industries would carry.

I'm not saying that they shouldn't make money--just curious as to why the behavior is "unique" I've assumed its a 3% fee based the markup, but dunno if that's the truth or not.

It was one of those "brain itches"--couldn't understand why it was so confined to the industry.

[TehLlama]

I'm not sure how here pointed it out, but our tolerance for profit margins in an industry where custom service is actually really important is completely out of scale, especially when compared to others such as furniture or clothing where most don't bat an eye at 300% markups, yet balk at a 2% price difference.

I understand that credit cards cost more, and if they're tight enough on margins, it's reasonable.

[mhanna91]

I don't understand it either. I work at a sub shop and I was told by the owner that it costs the store $0.40 to swipe a credit card on a $6 sandwich. There is no credit card fee. I don't see why it would cost a gun dealer any more per transaction than the sub shop pays, yet they deal in items that are easily 100x the value and still tack on a fee.

[Dave L.]

The best question to ask any retailer is, "what's the cash price?".

[MarkG]

The best question to ask any retailer is, "what's the cash price?".

Dave is on to it...

The key word is CASH. Gun shows are Econ 101. Do the math.

[TXBob]

I don't understand it either. I work at a sub shop and I was told by the owner that it costs the store $0.40 to swipe a credit card on a $6 sandwich.


See this is what makes me scratch my head--I know it does cost retailers money---but I don't know the true cost--so just because they say it costs them 3%, I dunno if that's the truth or just a snow job (and it costs them 1% or a flat fee or 3 legs of goat meat). I've never been one to think of retailers as "my friend" given the amount of BS that comes out of any retailer, firearms or no.

Actually did some googling and it looks like a "per item" fee of 0.10 to .50 cents as well as a percentage of 1-2% based on items ithat cost the same as a handgun or basic rifle. Doesn't help clarify things. Also could be that card companies shaft firearm retailers. Again, it would be good to know, but i don't want to force any retailers to show what they may consider private info.

was looking at http://truecostofcredit.com/ and just used their examples.

[CarlosDJackal]

I don't understand it either. I work at a sub shop and I was told by the owner that it costs the store $0.40 to swipe a credit card on a $6 sandwich. There is no credit card fee. I don't see why it would cost a gun dealer any more per transaction than the sub shop pays, yet they deal in items that are easily 100x the value and still tack on a fee.

Think about this for a second, 40-cents out of 6-dollars is 6.67%. That's double what the gun dealers are adding to your purchases at the gun show.

While this may not mean anything to a sandwich shop, 6.67% of a $600 handgun is $40. For most handguns that's more than the dealer's markup. For a sandwich that ends up costing the sandwich shop 75-cents to produce, this is nothing.

For a dealer that has to purchase $10,000 in inventory just so they can sell a particular brand in their shop, this adds up especially if it puts them in the red at each transaction. Like electronic shops they hope to make any profit through the sales of peripheries such as holsters, magazines, sights, grips ,etc.

You really cannot compare sandwiches to firearms. The overhead is different both in volume and in cost (how much bread, mayo and meat do you actually spend on a 6-inch sub?). Plus, a starving man will use his last $6 to buy a sandwich. There is no way anyone would consider spending their last $600 on a firearm (unless they have bad intentions).