Would this piss you off if a bar....
 

Would it piss you off if a bar charged 8.25% sales tax (normal in Texas) on credit card tabs but ate the sales tax themselves on cash purchases?

To clarify a bit... CURRENTLY all bars here eat the tax on ALL purchases... it has to be built into the price. They aren't allowed to break it out but that all changes January 1st.
Of course it would be a complete pain to add sales tax to cash purchases but a no brainer for cc purchases.

But let's assume consumers are completely ignorant of any changes in tax code. They only see that now their credit card tabs have sales tax added. I understand a certain amount of people will be pissy but how bad would you rate the backlash?

Most people using cards probably wouldn't notice. Especially if they run up a large tab.

Cash is king and cards cost a transaction fee.

I see gas stations offer lower prices for cash vs credit

I'd hesitate to do it unless I knew that I had a very devoted and fairly upscale clientele. It would help as well if I knew that they didn't have a tribal leader whose departure might trigger a mass exodus.

I think it's a good idea in a vacuum. I would be okay with it personally.

The establishment does not eat the tax. As you say, it is built into the price, just as it is when they buy from their retailer. No one is eating the tax.

yes, I simply mean that if the business charges $2 for a beer they pay the tax out of tat $2. In this new scenario that would still be true except that they could recoup 8.25% from the customer when doing credit cards. (since the machine can do all that automatically for them it wouldn't be a hassle)

btw here is what is REALLY happening. Texas in it's infinite wisdom has switched from the 14% flat tax on all alcoholic purchases in bar that has mixed beverages to a 6.7% tax PLUS an 8.25% "sales tax" that you can pass on to customers. That's all fine and dandy for restaurants or maybe hotel bars but not for your average bar. You don;t want to sell a $2 beer and then ask them for $2.16. SO you end up paying the tax out of the $2 which sucks because now you just got your taxes raised a point. So I was wondering "what if the bar simply added it to cc transactions?" Even if everyone switched to cash you would still be saying money because the .95% extra tax you are paying next year would be offset by the 2-3% you would save on CC transaction fees. BUT if everyone continued to use credit cards... then the taxes you pay would actually be dropping from 14% to 6.7% because the consumer would pick up the 8.25%.

I can imagine that at least one pissed off customer would cause a scene every single day.

It sounds like a headache to me.

Exactly.

The business would be raising prices. Period. Better be a damn good bar, a really good damn bar, or I'm finding a new one.

Obviously as I am not in that business down there any longer I am unfamiliar with these new changes. And the way you are describing it is confusing me a little. Because you still keep saying eating and recouping. There is no eating or recouping because it is all figured into the price. That two dollar beer is set at two dollars factoring in the 8.25% tax. Just as the .79 cents a bottle the bar bought it for factored in the the tax.

I'm just not following what you are saying.

look at it from the bar's perspective. It's either THAT or ACTUALLY raise prices because the state doesn't care and the TAXES ARE GOING UP.

So your $2 beer is either going up to $2.25 or $2.00+$.16 in tax.

Wouldn't that make the prices real confusing? Like, say a craft beer is $7 normally. That includes sales tax. So now, you'd be asking a cash-paying customer to hand over $6.43? I wouldn't think that bars would want to deal with that kind of coin situation.

So they'd probably raise prices in order to avoid it. Which means I wouldn't really like it if a bar pulled this stunt.

When Buffalo Wild Wings moved into Tyler, TX people started noticing a liquor sales tax on the receipt. Now either they took the time to separate that cost out so you could see exactly what you were paying in tax, OR given that the price of drinks was not significantly lower compared to any where else in town (like you would expect with the tax not built in), they were double charging you on the tax.

Pretty sure I know the answer to that.

They are actually raising prices. If it's warranted because of outside factors, OK. But breaking up the tax has nothing to do with it, IMO.

Just my thoughts. Not saying I'm definitively right on this.

No one is going to eat the sales tax. That is just foolish business management. The notion that someone would is crazy talk.

Ok let me go again and try to be clear.

Current Texas law is... Bars do NOT pay sales tax on alcohol. Period. They pay a flat 14% TABC tax on anything with alcohol in it. Beer, Wine, booze. This is only for mixed beverage bars. Beer and Wine only places only pay whatever regular city/state sales tax ends up being... they may as well be selling sno cones so let's ignore them.

Starting January 1st. The law goes screwy. The flat TABC tax goes to 6.7% BUT you also have to collect 8.25% "sales tax" of course it really isn't sales tax because it still goes directly to TABC and still applies across the board to all alcohol. So basically they just popped every bar for an additional .95% in tax. BUT they give you an out by letting the bar pass the 8.25% to the customers just like regular businesses do.

The problem is that you can't do that easily on cash purchases but you can on credit cards.

I'm also almost certain that was illegal to do. Only AFTER Jan. 1st will that be legal and then it will be shown as 8.25% sales tax. And I guarantee you EVERY restaurant will do this on all purchases.

You aren't getting what I am saying. "Eating" the sales tax is the same as "building it into the price". The term is used to denote that you have no "pass through" mechanism to make the consumer pay taxes in addition to advertised prices. And now that has changed.

I'll be honest. I despise it when someone offers me a discount for cash instead of a credit card. I use my credit cards all the time because it's easier and I get points on the cards. If a business positions it as a "cash discount", I immediately assume the following:

1. They're planning to not pay the sales tax and are crooked.

2. They're raising my price to use the credit card.

I recognize that the truth could be different, but my immediate reaction is that I have to pay more to use my credit card, and I really don't like it.

Read my recent posts, I think I wasn't making my self clear enough before.

Switch to cash.

That has to be the message. The state doesn't care. The state doesn't care. The state doesn't care. TAXES ARE GOING UP. This bar is taking action against this bullshit.

Now, raise the price and find a hook that puts the extra 16 cents to work against a state that doesn't care. Make it into a movement that works against the tax and every beer sold contributes in some way to the movement. Hell, in the right kind of a setting with the right kind of message you could even make the 16 cents a voluntary contribution to the cause. It's 16 cents.

Posters of Roosevelt, Jefferson and Lincoln (the faces on the dime, nickel and penny) speaking out against the added cost come to mind.

On the other hand, I don't know. It might not be that kind of bar.

First: fuck those assholes at TABC. Idiotic, entrapping bureaucrats.

Second: You cannot possibly believe that the current 14% tax is not factored into your alcohol sales and passed onto the customer already?

Third: I do not see the problem with the cash transactions. The computers can easily add that on for cash as they can credit cards. Unless I am still missing something here?

OK, I think I'm following now. But whatever the decision, keep the prices the same, regardless of form of payment.

They have to pay to use your credit card as well. They are charged for every transaction paid for with plastic. Thus, it it is cheaper for them to deal in cash.

I won't even to to places that charge extra for using credit. Very few exist anymore though.

Also, note that it will annoy people who didn't bring in a ton of cash. First, they'll complain that they don't have enough cash. If they don't, they'll be made that they're paying more than other people for the same product. If they do, then they'll peel some bills out of their wallet to pay for it and will mentally treat the bar as being cash only, which means they'll leave relatively quickly and head to a bar where they can use their card.

I'm really not a fan of the idea.

I agree that this is true. I look at it as a cost of doing business, though. They shouldn't involve me in their dealings with their vendors.

I think you are correct on the illegality of it. And as wrong and fucked up as it is, I'll be damned if I am going to call those TABC assholes on them.

But, all of a merchant's dealings with their vendors involve you. The more a vendor charges, they more you are going to get charged. That is just simple math and a necessary business requirement.

Of course it is, but there is currently no way to pass that on without having to change ADVERTISED prices. There is a big difference in perception for some people when it comes to a $2 beer and a $2.25 beer. All fine and dandy when you have a level playing field but now with the new craptastic system restaurants get a clear edge because everyone EXPECTS taxes on the bill there.

Imagine bartending and a guy orders a $2 Bud. He stuffs a dollar in the tip jar and hands you $2.. you gonna say "hey it's $2.16 with tax, gonna need 16 cents man." What a complete cluster****.

Your only choice is to take it in the ass and lose a couple grand a month OR raise prices overtly OR this solution which is to add the 8.25% sales tax to CC tabs because then it's seemless.

The ONLY drawback would be customer reactions to seeing the sales tax on the tab. I figure 80% of us are so trained to see sales tax that most wouldn't even notice.

Then you and I define "eating" (as it applies to money) in two very different ways.

who the hell tips a buck for a $2 tab?

Advertised prices get changed all the time. It really isn't that big of a deal.

I not only always told my customers what the total was, the vast majority of the time I would put a ticket in front of them as well. That is all you have to do. Don't give someone one the option of deciding what they think the price might be, tell them when you hand them the drink. Again, not a big issue.

I never tip less than a dollar. But, I also used to be a bartender.

$1 is minimum tip per drink!

haha you just beat me to this.

I round up to the next dollar from 50 cents up. Other than that I only tip 20%. Basically, whichever is largest.

Also, since when is there a minimum tip per drink? Is this just your opinion on this?

I'm not that far removed from those days. I'll still jump all over that shit in a hurry. :)

For you and your fancy pants bars maybe! Some of the dives I go to would see mass revolts every time prices change.

Again, you and your top hat wearing, monocle sporting customers... :D In many many bars they don't have this option. At least not in any convenient way. And not to mention what happens with a beer girl who is stuck out "on an island" with no proper till?

It is law. Galactic law. Obey it or else.

Not sure if it's just my opinion.. I know that is what everyone who is anywhere involved in the industry feels. Since I have a ton of friends in the industry my perspective may be slanted.

I have never heard of a minimum tip per drink. I definitely would not tip a dollar for a drink though.

I follow standard tipping. Basic service 15% noticeably good service 20%. GREAT service 25%. If you are just handing me a beer that is basic expected service. Of course, I rarely sit at the bar so there is that.

I tip a dollar per drink, usually. Unless I'm at a bar I don't give a shit about, then I tip one dollar on the first drink and then on every other drink.

Shit, I ran a bar that was redneck central in redneck central East Texas. Fancy my ass. We went through a price increase a two or three years ago. Had too. Our prices were jumping up. People who are not going to accept the realities of business cannot be helped. You either go out of business by adjusting your prices or you go out of business by not adjusting your prices. It sucks but, tell society to blame themselves for letting government get so big, controlling and expensive.

Island station with out a proper till? Round your prices up to the next half dollar. Problem solved. And don't give me this crap about a little dive bar that can't afford to piss off their customers with that move. Those bars aren't going to have beer stations set up for some big ass party that would require such things.

Yeah, but I expect them to handle that without involving me. I don't order a hamburger and expect the waitress to say, "Tomato prices went up a little this week. You owe me three more cents."

Of course, I'm a big proponent that the advertised price of anything should be what it costs. It should be illegal to post a price and then charge the customer more, whether it's a rental car or a drink or a pair of shoes. If the price says, "$8", then I should be paying $8. I shouldn't be paying $8.16. The stated price is $8.

Not even a Chopin martini that the barkeep shakes the shit out of for five minutes so you have a nice thin layer of ice on top of your drink?

The price of tomatoes can fluctuate. The transaction charge on credit card purchases is more or less static as you have a set fee for the duration of your agreement/contract. A little bit different situation there.

Bad law but trying to pass the cost to only cc users is bad business.

Raise prices across the board. An extra .25 per drink isn't what makes or breaks a bar.

BTW, Kyle, I do not disagree with the stupidity of the law nor the further raising of taxes. I just do not see how implementing it is going to be as difficult as you seem to think.

Of corse with the "everything is bigger in Texas" mentality, I can see very easily how everyone will blow this up to make it a bigger problem than it really is. :D

Bingo.

A lot of non cheap-asses

I have before, but she ended up being the worst piece of ass I ever paid for.

I had my car fixed one time and I noticed they took Visa. The repair was about $600 and when they rang it up they said around $650. I told them they had quoted me $600 and they said the credit card company charged them and they were passing that on to to me, the credit card user. I went and got the cash instead, saving about $50 in the process and never used them ever again.

Anyway, I would raise the beer price to $2.25 and be done with it there, not charging extra for cc users. I would think the other establishments would be following suit.

I honestly could not tell you the last time I was in a bar.

Number of shits given = zero

I'd say raise prices to .20 or .25 are the only option here.. Cushion the blow with some sort of special or something.

I gave at work...

I'm working on a fart.

Ok, I have a problem with this situation. You factor in the cost of your credit card fee into your prices up front. Then, if you want to discount that fee from cash purchases more power to you. But you do not add the transaction fee on after the fact.

That, and I know of no processing company that charges fifty bucks for a single transaction. I may be off a little bit, and will depend on the processing company you go with but, I want to say some where in the two to three dollar range is typical these days.

It would have to be .25. No way in hell does a staff, or the customers, want to deal with .20 exchanges.

Aren't they supposed to tax you?

It's actually illegal in Texas to pass on CC fees to customers. The only way around it is to discount cash purchases. BUT that isn't what I'm talking about in this scenario. In this scenario you are choosing whether or not to passing on sales tax which is completely legal.

It appears that most of you could care less BUT the ones of you who do care are VERY vocal about it. That was my concern when I posted this. So bars are simply going to have to raise prices across the board or lose money on this deal.

Well, I'm pretty sure that would be at minimum a $6 drink so yeah, they would get at least a buck.

I tip $1 a drink.

That's kind of the way taxes work.

I think you need to make sure the opinions you listen to come from the right demographic. People that understand the difference between a bar, and the place you order a beer from while you wait for your table at Applebees.

has nothing to do with being cheap man. Generally a $2 drink is a flippin beer. You don't get a $1 tip for taking off the cap for me. this is one of the reasons I stay away from the bar and sit at a table.

Not really with sales taxes. The advertised price stays the same and you see the change on the tax line. That is why this is a unique situation. In Texas before Jan 1st (next year) you couldn't add taxes to the tab if you wanted to. Illegal.

So a waitress hands you a beer and you tip 40 cents?

Do that at a real bar and don't expect her to be back anytime soon.

"here's two dollars, cutie. And the 4 dimes are for you"

Rubing two dimes together just doesn't have the same zip it use to, I guess.

Well yeah, your prices go up the customers' prices go up, wether it be from price increases from suppliers or taxes. There is no way around that.

I will even supply the line to use with customers when they bitch about it. You simply tell them it is a tax, they HAVE to pay it. Now, they can either pay the full percentage on all of their purchases, or the price of drinks can go up slightly so the burden is shared by everyone and you end up paying a little less than the full percentage.

True, It will also depend a lot on what all the other bars do. I know for a fact that restaurants will switch to the new system where they build the 6.7% tax into the price but pass the 8.25% on to customers. They were the group that lobbied for the change to begin with. Airport and hotel bars where you always get a printed bill with your total will switch as well. But I just can't see busy downtown bars ringing up and handing out a bill for every purchase. So it makes zero sense for them to do anything other than A)pass it on when they do credit card tabs or B)raise prices across the board

Just curious.

I run a tab and pay at the end of the night.

I'm a cash user at the bar anyways. I don't like screwing local businesses over on credit card fees to them.

So it doesn't really affect me.

The bars I frequented didn't charge an even dollar amount for ANY drink. It was always 2.50 or 2.75.

Do restaurants really pose competition for bars anyway? Their drinks are usually a lot more expensive even if they do give you a receipt breaking it down.

It's a bum deal for bars because they can't realistically adjust prices any less than 25 cents at a time.

2.50? You must frequent some classy bars.

Dive bar in Arlington I go to when I'm in the area has $2 Bottles and $2 Wells on Sundays. CLASSY!

Whne you have kids and at least one is of driving age. Things tend to change.