DRich
DRich
Joined: Jul 6, 2012
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January 29th, 2020 at 9:20:57 AM permalink
Quote: Vegasrider

I know of local bar establishments that have machines, for certain known customers, the bartenders will run the customers CC thru as a normal transaction but
the. customer actually receives cash.



Many years ago I remember almost all the bars that I went to used to do this. It was great because I could earn airline miles on my credit card by just taking a cash advance. Lots of free flights from this.
Living longer does not always infer +EV
TigerWu
TigerWu
Joined: May 23, 2016
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January 29th, 2020 at 10:37:54 AM permalink
If Vegas wants me to gamble away more money there, they'll make it easier to open a line of credit.
Ayecarumba
Ayecarumba
Joined: Nov 17, 2009
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January 29th, 2020 at 11:11:46 AM permalink
Quote: Vegasrider

I know of local bar establishments that have machines, for certain known customers, the bartenders will run the customers CC thru as a normal transaction but
the. customer actually receives cash.



I wonder if the owner of the bar knows this is going on? The establishment pays a base fee for having a credit card terminal and a service fee to the credit card company for every transaction, so he/she is losing money unless the drinks are so overpriced that the loss is made up in volume. But it is clear that customers don't need the cash to buy drinks since they can charge it, The accountant for the bar has to explain multiple cc purchases and cash refunds, rather than credit card refunds at the audit.
Simplicity is the ultimate sophistication - Leonardo da Vinci
Mission146
Mission146
Joined: May 15, 2012
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Thanks for this post from:
Ayecarumba
January 29th, 2020 at 11:19:15 AM permalink
Quote: Ayecarumba

I wonder if the owner of the bar knows this is going on? The establishment pays a base fee for having a credit card terminal and a service fee to the credit card company for every transaction, so he/she is losing money unless the drinks are so overpriced that the loss is made up in volume. But it is clear that customers don't need the cash to buy drinks since they can charge it, The accountant for the bar has to explain multiple cc purchases and cash refunds, rather than credit card refunds at the audit.



Call a bottle seventeen shots for a fifth. At the hotel, we'd get a well fifth for something like $12/bottle on average and would sell for $3 a shot thereby making $51 in revenues for each bottle, an overage of $39 for each fully sold bottle. 39/17 = $2.29 which is the gross profit (not considering other expenses) on each shot. I think our credit card processing fees came out to a flat 1.9% (wouldn't have allowed this on AMEX or Discover), so as long as the guy buys one shot, we're pretty much even Steven on the whole thing if he takes out $100 that costs us $1.90 to give him.

It wouldn't have mattered anyway, in our case. We added 2% to the amount advanced, which is still well under what most ATMs would charge. This was the case whether or not they advanced money using CC or charged their drinks on the card...except we had to do tax if they charged their drinks to the card, so they were better off doing the cash transaction.

Honestly, the only problem we ever had with this was the one time that someone outright disputed the transaction (with the C.C. company), but we won the dispute because he signed the slip.

ADDED: What audit? If you worked at a bar, your books must have been squeaky clean. Most bars I know of only even loosely keep track of sales much less what transaction does what. Both at the hotel bar and the regular bar I worked at before that it would just go in the books as, "Non-Sale Cash Out." We wouldn't even do it as a refund. The credit card transaction itself is a sale, but the cash aspect wasn't considered as a refund. I don't know what the accountant(s) did with that, but neither the hotel's accountant nor the accountant for the non-hotel bar seemed to have an issue with it.

As far as counting the drawer/sales goes, the credit card slip just offsets the cash and essentially equals zero. At the hotel we would have charged 2% on the card, which would technically put the credit card side over the cash side...but we didn't balance that anyway. As long as the total of both equalled or exceeded rung up product sales totals, I didn't really care. Credit card might say $102 and then under that on the slip (less $100 cash). That's all. Worst case scenario I guess the bartender could have got away with stealing $2.
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DRich
DRich
Joined: Jul 6, 2012
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Thanks for this post from:
Ayecarumba
January 29th, 2020 at 11:34:43 AM permalink
Quote: Ayecarumba

I wonder if the owner of the bar knows this is going on? The establishment pays a base fee for having a credit card terminal and a service fee to the credit card company for every transaction, so he/she is losing money unless the drinks are so overpriced that the loss is made up in volume. But it is clear that customers don't need the cash to buy drinks since they can charge it, The accountant for the bar has to explain multiple cc purchases and cash refunds, rather than credit card refunds at the audit.



In Las Vegas they did this so you would gamble. I would tell the bartender to give me $500 to play the machines. They would take my card and hold it until I was done gambling. Whatever I owed them when I finished gambling they would just charge to the card.

They knew they would make much more than the 3% they were paying the credit card services.
Living longer does not always infer +EV

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