The Dodd-Frank w/ Durbin Amendment did exactly what it was supposed to do. Big banks acted irresponsibly prior to the 2008 financial crisis. Power and money needed to be redirected away from the big banks. You saw that small banks and credit unions converted ex-big bank customers to their banks. Shift of power.

As for lower prices in retail, you have to give it time. Interchange is only between banks. Merchants must go through a payment processor that adds a profit layer on top of interchange. In order for merchants to potentially realize any financial benefit from the Durbin amendment, they need to negotiate new contracts. This will take time as well as necessitating training of employees and possibly the purchase of new POS system. Regardless of the Durbin amendment, merchants are tied to their contracts with payment processors. The payment processors are benefiting from the new laws whenever someone uses a Bank of America, Wells Fargo, or Chase debit card. Until merchants can negotiate new contracts, you will not see an opportunity for lower prices.

Consumers need to give merchants time to adjust to the new law. It is still up in the air whether consumers benefit from all this on the micro level (lower prices). On a macro level, consumers benefit because competition is spread among other banks which create additional perks and distribution in our financial system which creates reliability and safety.

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tekgems on January 20th, 2012

Amazon is offering a premium service at a reasonable price. We are members of Amazon Prime for several years now. It is not only free shipping, but guaranteed two business day shipping. You may get super saver free shipping on orders $25 or more, but you will have to wait 1-2 weeks to receive your package. Big difference. Thursdays are best because I will sometimes receive packages on Saturday. =)

I think Amazon’s cost to ship is not as high as we may think. They have their warehouse infrastructure in places like Arizona, Nevada, and Tennessee which allows them to deliver packages to most people within two business days via Ground service anyway.

From Goodyear, AZ 85338:



From Fernley, NV 89408:



From Brush Creek, NV 38547:




If you match up the UPS Ground rates with the 2010 Census population density by County, you can see that Amazon can deliver to many densely populated areas within two days.

Their volume further allows them to negotiate good rates. I read here that at their peak, they were processing 41 orders per second in year 2005:

Another added benefit is that you can watch many Amazon Instant Video for free. We watch it on our Roku which allows us to cut our Cable TV subscription.

tekgems on January 19th, 2012

You will encounter many credit cards that offer 0% APR on balance transfers. You will not, however; run across many credit cards that offer both Fee Free Balance Transfer and a 0% APR. Many credit cards will charge you anywhere from 3% to 5% transfer a balance. That means to transfer $3,000 you will pay anywhere from $90 to $150. That’s not a very good deal if you’re looking to maximize your money towards debt. There are a few fee free BT cards out there. Two cards mentions here are the Chase Slate and Discover More:

Whenever you apply for a credit card with a specific purpose in mind, make sure you read the terms carefully. 0% APR can have many meanings… Hopefully, the card offers 0% APR on both balance transfers and purchases, but sometimes it may only apply to purchases or balance transfer. Read the terms carefully! For example, the Sallie Mae 2% cash back card only offers 0% APR on balance transfers, but not for purchases.

A good strategy to pay the minimum on the fee free 0% BT card and schedule to pay that debt off by month 11. On a $3,500 balance transfer, perhaps you can pay the minimum of $50 per month, then pay the remainder of $3,000 on month 11. While you pay your minimum, you would be redirecting your debt payment towards the highest APR credit card, or the card with the lowest amount owed if you believe in Dave Ramsey. If you have not paid off your debt completely by month 12, you want to evaluate your payment strategy again based which card has the highest APR, or again Dave Ramsey method to pay the card with the lowest balance regardless of APR.

tekgems on January 18th, 2012

Remember, unlike most credit cards, the 0% APR for the first 12 months is only on Balance Transfers. If you make purchases with the card, there is interest on purchases.

Sallie Mae. Bottom line, you need $12,500 of spend to get 25,000 points which will convert to $250 dollar in the form of credit statement, rewards check, or gift cards.

Point Value to Cash Rewards Value
2,500 = $16.25 ($0.65 per point)
5,000 = $32.50
7,500 = $48.75

10,000 = $85.00 ($0.85 per point)
15,000 = $127.50
20,000 = $170.00

25,000 = $250.00 ($1.00 per point)
35,000 = $350
50,000 = $500

Although there are many ways to redeem the credit, those that want to redeem for cash, can find screenshots of the Rewards screen here:



tekgems on January 17th, 2012

Credit Card Payment Due Date

For online credit card statements, I’d like a law where they forced banks to show amounts due based on the “Payment Due Date”. For example, my total credit card bill is $5,000. $2,000 is due 1/18/2012. $3,000 is due 2/18/2012. All I have to do is pay $2,000 by tomorrow, then the other $3,000 can be paid a month later. The way the credit card companies have it currently listed, the minimum you are required to pay to avoid interest charges is not clear. I do not expect banks to do this because they are not in the business of advocating for the customer.

tekgems on January 14th, 2012

Unlike Google NFC, PayPal is creating a different payment network that merchants can work off of. This creates competition and a non-reliance on the traditional payment network. We’ve seen companies like Dwolla introduce simple bank to bank transfers for customers using the registered e-mail or phone number. In the same way, these terminals are acting as the proxy for our phones or computers to make payments. I am loving this innovation.

PayPal PIN pad

retailers will be able to receive payments via a PayPal Access Card or through an “empty hand” payment in which a user accesses their PayPal account by entering in their phone number at a point of sale terminal. In both cases, they will need to confirm a transaction with a PIN code

via How PayPal plans to scale its in-store payment system — Tech News and Analysis.

tekgems on February 14th, 2011

Sales and Use Tax Rates SolutionsFrom fast, easy rate lookups to a complete tax rate and boundary database, AvaRates provides the tools you need for accurate sales and use tax calculation AvaRates includes address validation and standardization for superior accuracy and the desktop version integrates easily with your financial application.

via Sales and Use Tax Rates Database | AvaRates from Avalara.

To streamline the collection of sales tax for online retailers, some have suggested just charging online businesses the state tax rate. Forego the local tax collection. To exclude local tax jurisdictions because the system is “too complicated” means there will be no financial incentive to support such an arrangement with the local tax jurisdictions.

“Too complicated” is something credit card processors would say.

If you want fair collection of sales taxes for online and offline, then you have need a system that determines the correct tax rate for every ship to address.

Of course, there will be a small percentage that may need further research, but you can try to make educated guesses based on assumed tax rate location of the ship to address.

For example,

1) you could default to state tax rate collection only.  this leaves local tax regions without any tax collection from online businesses. this then again, put online stores at a financial advantage. B&Ms will complain: Why do we have a to pay a local rate while online businesses do not?

2) a flat rate collected on top of the state for “questionable” addresses which would be put in a general fund. These funds would be distributed back to local regions based on dollar amount of taxes collected from each region.

3) figure out a more accurate way to tax accurately. If the ship to address and/or zip code brings up several possible tax rates, what is the most likely tax rate? Can we assume the tax rate for the questionable zip code based on the tax rate of surrounding zip codes?

4) can you utilize map technology (GIS) or GPS as a layer you place on top of addresses to figure out what tax rate the address needs to pay?

If the charged rate is questionable, these transactions can be flagged. Most buyers will not care unless it is a big discrepancy. As long as the collection favors the state, states will do nothing. If they are collecting less than they should get, certain transactions can be cherry picked for investigation since the dollar amount may be worth the effort.

I don’t know much about Avalara and how they would work in this scheme, but I have read they charge small sellers $0.25 per transaction, while they might charge bigger companies $0.02 to $0.05 per transaction. That seems like an awful lot of money to get an appropriate tax rate.

One has to do the cost/benefit analysis, but there is some merit then to collecting only the state tax rate since the cost for third-party services may outweigh whatever local tax dollars are lost from online transactions.


tekgems on February 2nd, 2011

This is why Rupert Murdoch is not to be trusted with the Wall Street Journal. I think the staff at WSJ are honorable, but having a boss like Rupert Murdoch means you don’t have control over the content you can publish or what the tone of the article will be. We are getting closer and closer to corporate propaganda as media power continues to be consolidated.

We’ll put aside the fact that no mention was made of the Wall Street Journal’s sister company and Facebook competitor MySpace.

via Fear And Loathing At The Wall Street Journal.

tekgems on January 27th, 2011

When you drop off a UPS package at the UPS Store, they will scan in each package as it is weighed on a scale. When they do this, they do two jobs: 1) confirm receipt of the package, and 2) re-weigh the package.

If you made a “mistake” on your shipping weight, UPS Store will catch it.

Same idea with post office.

Get a barcode scanner, or an iPhone that can scan/read barcodes and record the correct weight. If the shipping weight is different from what is recorded with the package, then airblow it off the conveyor belt for auditing.

This method wouldn’t be able to catch shipping method variances, but it could catch weight.

You would also have to encode the shipping weight paid for in the QR code of the shipping label.

I’m not for manual checking of package weight, when you can automate it. I imagine you could recoup the investment cost very quickly when you can catch postage due in an automated fashion. You could even bill the accounts of pc postage users by directly pulling from their postage accounts at the time of audit.

tekgems on January 4th, 2011

PayPal offers support for Micropayments to merchants for US to US, GB to GB, AU to AU, and EU to EU transactions for Business and Premier accounts. This feature is offered at a special rate of 5% + $0.05 per transaction.Merchants who wish to use PayPal’s micropayments pricing need to open a new PayPal account through this account registration page.Merchants who receive both macro and micro payments should maintain two separate accounts: 1. An account to apply their standard rate to macropayments. 2. An account to apply the micropayments rate to their micropayments.

via Micropayments.

You can have one eBay account but specify different Paypal e-mail addresses for each listing.

Your break even point depends on which merchant rate you get from Paypal.

If you are receiving 2.9% + $0.30 from Paypal, your break even dollar value is $12. This means if you receive a payment $12 or less, micro merchant is the better deal.

If you are receiving 2.2% + $0.30 from Paypal, your break even dollar value is $9.

Remember, since cross border fees add 1% to your processing rate, the break even value changes.

Also, if you offer multiple quantities or use calculated shipping, its hard to know which account type is financially best since you won’t know the order total.

When I sell something for $1.99 with free shipping to someone in the USA, micromerchant is the best value. If that same buyer purchases qty 10 ($19.99 total), then micromerchant no longer becomes the better value.

I know this is complicated, but these are all factors you have to consider.