Pay Cash to Help Local Businesses

An op-ed urges fellow Mainers to use bills and coins instead of plastic to buy goods and services at neighborhood stores.

August 17, 2016

PORTLAND, Maine – The “Buy Local” movement would benefit from a second component, argues Portland resident Steve Lovejoy in a recent op-ed in the Press Herald. While “the buy-local movement in Maine is getting stronger,” Lovejoy wants to expand it to “Buy local and pay local.”

His point is that by paying with cash rather than credit or debit cards, those local businesses will thrive even more. “[E]very time you use your credit card—or your debit card—when you make a purchase at your local business, you are reducing their profits, sometime very significantly,” he wrote.

“When you use your credit or debit card, your local business ends up paying. While card processing fees vary, a typical rate is around 3% of the amount of the sale. Small local businesses can’t negotiate rates like a large national player. You can bet that Wal-Mart pays a lower fee than your corner store.

“So, what does that small 3% mean to a local business? … Paying cash makes your local business more profitable and your community stronger. If a business owner whose customers pay in cash now goes out and does the same himself, we could build our economy.

“How much could we keep here in Maine? … In 2015, the state of Maine collected $89 million in sales taxes, which, at 5%, means there were $1.78 billion in taxable sales alone. If half of those sales were paid with a debit or credit card, it means $26 million in card processing fees that we could have kept here in Maine.”

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