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Old 08-18-2019, 10:25 AM   #35
joey2665
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Quote:
Originally Posted by baygo View Post
Credit card fees vary from, Industry to industry and business to business, depending on who the processor is. The restaurant industry happens to have the highest processing fees. There is an additional factor that actually increases the cost to the restaurant. Let’s say a diner enjoys a $100 dinner, plus 9% tax equals $109 plus 20% tip is $21.80 tip. Total $130.80 3% is $4.00 or 4% of the original $100. A small restaurant that runs $500,000 in credit cards yearly can easily pay $15,000 a year in credit card fees. The owner of a restaurant that does that level of volume is looking at $15,000 as 20 to 30% of his or her take at the end of the year.

It’s not uncommon for loyal customers to a restaurant to bring cash to help protect the longevity of there favorite restaurant.

“Under the table” is really more a thing of the past in the restaurant business. Today, state and federal revenue collectors have sophisticated software that compares restaurant consumption against revenue reported. Anyone attempting to under report sales will get caught.
But my point was to raise your prices by the minimal 1.5% to offset the processing fees also increase in business could also help offset the costs. The other costs you always have to deal with.

As a CPA I certainly understand the audit risks but in my experience many smaller restaurants always tried to guild the Lilly and many know how to do it and not raise red flags.


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