Summary
The article is about how the discounts on cash payment affect the gasoline retailers and customers. Because of the increase of the price of gas, the gasoline retailers are earning less money from the sale of gas. It is not only because of the increasing price of gas, but also the charge of the credit card fees. Therefore, sometimes gasoline retailers have to pay the amount of credit card fee that is equal or more than the sales profit. It also tells that the fee of debit card is lower than credit card. The cash discount is welcome by a lot of customers.
Connection
In the textbook, it mentions about why the companies allow discount on payment. It is because they want their customers pay earlier or on time. However, in this case, it is using the discount differently. It is use to attract customers and avoid the payment of credit card fees. In other words, it is use to increase the profit from the sale. Although the two cases in the article and the textbook look different, they both have the same purpose. They are both trying to bring the business advantage.
Reflection
This is quite impressive for me. I never think about being a gasoline retailer will be that difficult with the increasing price of gasoline. The retailer in the article loses money in every gallon of gas he has sold. That means the price of gasoline is not only affects the customers, but many other groups of people or businesses. Under such a situation, business can only survive with new policies. In addition, preventing unnecessary expenses is especially important to a business. It is because when a business is getting a very low income from sales, saving money is a very good way to bring the business profit.
1 comment:
Hi, Hector. I found that news too when I was searching for my article, although it has to do with cash discount, but it is a problem that the discount is made at the time of the purchase but not as an issued invoice. It is quite interesting actually when I first did an article about the falling price of oil in chapter 11 and now the retailers are doing discounts. Retailers hope to bring back the stock market whatever they can do. Retailers make discounts to make the customers consume to keep the sales.
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