Ask me why our coffee price is going up by 10 cents

“Better the devil you know than the devil you don’t”.    idiom

Dear Square,

It’s not you. It’s me.

Hi, this is Serg with Bikeeny caffe in Malden, MA.
I’m one of the owners here and CPS for the company. (Chief Problem Solver)

You’re reading this wondering why this little known cafe is increasing the coffee price by 10 cents.
A week ago, on November 1st, Square, our credit card company, changed our fee structure.  From 2.75% to 2.6% + 10c per transaction.
For us, this change means up to $800 more per month in future transaction costs. Considerable and also Wild !

When you glance at the percentages, looks like a minor, reasonable change. And it is; unless you’re a cafe, ice-cream shop, a micro-brewery or any other business that has a lot of little transactions. What does this mean for the mom and pop shops of America? It’s devastating, if they have Square.

Truth is, I didn’t know until very recently that we’re going to have to raise our coffee price by 10 cents. Square totally blind sided us. Most of the credit card processors out there (PayPal is an exception) already charge a fixed fee per transaction PLUS a percentage. That is one of the reasons we chose Square in the first place.
Side note: PayPal is not made for restaurants.
Also, Ryan, the previous owner, sold us the register equipment, as well. One less thing to worry about. “We’ll deal with that later”.
Until today.

Great vendors are hard to come by. So when I find one, I give them all my business. Even if they’re more expensive, I find ways to give them more money. Time saved dealing with someone else’s broken system makes up for the cost. Trust is built over years.
“All a company is is a bunch of people together to create a product or service.”
If we do business with someone, usually, that means we have a good account representative with that company.
As with most things we all buy, it’s not just about how much it costs. The devil is in the details (or terms offered).

Fast forward 18+ months, we’re up and running. Growing and using ever more services from Square. They have a good product, at a reasonable price. Used to be more reasonable until recently, but hey, “What are you gonna do“?!

Here are the services that Square currently covers for us:

• Point of Sale
• Credit Card processing
• Loyalty
• Gift cards
• Payroll with pay stubs & direct deposit
• Tax reporting
• Employee time cards
• Customer profiles (CRM-ish)
• Cash drawer management
• Kitchen ticketing
• Invoices
• Card on file option
• eCommerce
• Reporting (really granular & clean)

I’m sure there’s some services that I missed. Our relationship with Square is deep. At some point or another we were considering financing and online marketing through them. We might still do it. After all, we have our customers’ profile built there.

I can’t image replacing Square right now. They got me. I called Square when I got the infamous email about the raise. We must have spent over an hour on the phone. I tried it all with them. I was patient and soft spoken at first. When that got me nowhere, I became firm, still pleading, though. I even asked to talk to a supervisor. I never do that. Nothing got me the result I wanted, not even flattery. Basically, we’re too small for them to care. The nice lady on the phone clearly explained: “
If you were to process more $$$ per year, Square would consider lowering the rate”.
“Very nice”. Do you think I chose to process less cc transactions over the past year?! We’ve a small business. We’re lucky our customers open our doors every day. The number of sales is irrelevant. We’re grateful for the “little” we got.
My nr. 1 goal is to continue to keep the doors open. I’m aware that two other coffee shop owners didn’t make it at this location before us.
What we offer is very different. I feel like we’re on the right track. We’re here to stay, dammit !

Here’s where Bikeeny caffe stands today:

• We have nine people on our team. Six more than we started with
• Sales are growing month over month
• The generous loyalty program brings people back,
• Customer retention is on point AND
• Evelina, Octavian and I, get to take a modest salary.
  Sweet.

We’ve come a long way and there’s no stopping here. Feels like we know our customers, somewhat. Maybe we don’t, so let me ask you: 
If you were to change one thing about Bikeeny caffe, what would it be?
Please don’t ask me to leave the coffee price the same. It breaks my heart and unfortunately, I can’t do that. Anything else. Kindly write us a constructive comment below. I listen and take notes. If it’s interesting, we’ll implement and test your idea for a week.
“If it sells, it stays. If it don’t, it don’t”

I would like to continue to be able and pay our team members a wage. As a small neighborhood business, we count every penny that goes in and out. I’m involved in a number of ways with the community. I care.
My goal for 2020 is to pay the highest average wages in the industry. My vision has all of our team members make at least $20 per hour. I’m looking at ways to get there and taking the hard, necessary steps now. That’s why, when Governor Baker executed legislation to gradually raise the minimum wage to $15/hr by 2023, we weren’t concerned at all. All for it. If we can’t pay our people a livable rate, we shouldn’t be in business. Period. 

Over 80% of our transactions have coffee on the ticket. As of December 1st, three or so weeks from now, our coffee, hot or iced will be 10 cents more. I’m sorry.
It’s been a conflict between our commitment to provide the best value and keeping the cafe open.

I understand this might upset some of our customers. Rightfully so. We have become an integral part of their daily routine. Now, the consistency of that routine is being messed with. I wish there was another way. I hope you understand.

I’m happy to talk in person with anyone that is still confused or would like to know more about the whole situation. It came unexpectedly too fast.

Sincerely, Serg. 

My future blogs should be less gloomy, I promise. This was something that I had to get off my chest. Thank you for listening.
Next post that’s coming:

7 lessons I’ve learned in 18 months of owning a coffee shop 

It will come out by Friday, November 15.