Dubai Jewelery: Wrong practices to avoid card fees

Gold artifacts stores encourage consumers to pay with cash

• Stores benefit from granting discounts on workmanship when paying in cash by obtaining daily cash flow.

  Photography: Ashok Verma

• Tawheed Abdullah: "Local gold pricing systems that do not harm merchants when using card payments."

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Consumers reported that shops of handicrafts and jewelry, in different parts of the country, encouraged them to pay in cash for their purchases, by giving them offers of discounts at varying rates to avoid paying with credit cards, pointing out that these offers impose on them specific payment systems, and contradict the state's directions to stimulate card payment.

Officials in shops of artifacts and jewelry indicated that some outlets resort to these offers to preserve cash, and increase the attraction of consumers through discounts instead of paying percentages for commission payments with cards.

In turn, Dubai Jewelery Group confirmed that these actions by some stores are wrong practices to avoid card payments, which range from 1.5% to 2.5%.

Buy gifts

In detail, the consumer, Ahmed Samih, said that he was surprised when he bought gifts of crafts and jewelry on the occasion of his wedding, that the store gives him an opportunity to take advantage of discounts offers on the condition that purchases are paid in cash and not by credit card, considering that these offers impose a specific system by the stores, and contradict the directions The state to stimulate card payments.

The consumer, Samir Emad, added that he had to leave a shop for the artifacts he used to buy from him for his family, and to search for the nearest ATM machine to withdraw cash, when store officials refused to grant him any discounts except when paying cash for purchases, pointing out that the offers of discounts are supposed to be Stores are comprehensive and not specified with terms that are in the interest of store officials, and it is a new way to move away from card payments instead of previous methods, which imposed commissions when paying with cards.

The consumer, Muhammad Ibrahim, pointed out that the departure of some stores from card payment systems contradicts the trends of reducing the use of banknotes for transactions in the country, as it imposes unacceptable restrictions on consumers in the markets.

The consumer, Sana Majed, pointed out that when she went to buy gifts from a handicraft and jewelry store, the store official told her that she would receive discounts for workmanship if she paid cash for the purchases, which made her have to withdraw money from the ATM to complete the payment process, instead of cards.

Liquidity and commissions

Abdullah Muhammad Al-Tohami, the sales manager at the Jewelery Al-Sarraf company, said that “some stores that offer discounts to dealers in exchange for buying through the cash system instead of paying with credit cards want to obtain daily cash liquidity in cases of need in trade systems, in addition to competition. By attracting many consumers through these offers, ”pointing out that“ this phenomenon is not considered general practices in the markets, and it differs according to the marketing policies of the stores. ”

Motivational policies

Rikesh Dahnak, director of the Rikesh Jewelery Company, said, “A number of stores resort to various incentive policies for consumers to encourage them to pay in cash instead of using credit cards, in order to avoid paying rates of up to 3% to banks, which is a burden on stores. , Especially since the average profitability reaches 5% of purchases.

The sales official at the Crown Princess Jewelery store, Amir Hadid, added that "paying credit card purchases costs the stores to pay 3% to the banks, which in turn makes the stores prefer cash payment, and is keen to encourage dealers to do so."

Offers discounts

In turn, the sales manager at Al-Nakheel Jewelery Company, Samir Ali, said that “the stores offer discounts to consumers in line with marketing policies that benefit both parties, by benefiting the stores in increasing sales and raising competitiveness, and not paying large percentages of sales to card companies. Credit, which sometimes exceeds 2.5%, ”pointing out that“ the stores collect the amounts of purchases paid through credit cards on the next day from banks, but some prefer to obtain the value of purchases directly, and reduce their commission payments. ”

He added that «the benefits to consumers from these offers is to obtain discounts on the total value of purchases from the price of workmanship, and thus a number of stores began to expand the use of these systems during the recent period».

"The stores benefit from giving dealers discounts on workmanship or others when paying cash for purchases, by obtaining daily cash liquidity, while competing in the markets by increasing sales through these offers," said the sales official in a store that sells gold jewelry and jewelry. Pointing out that "it is better for those stores, instead of paying credit card commissions, to direct a percentage of those fees to consumers through discounts offers."

Wrong practices

In turn, the Chairman of the Gold and Jewelery Group in Dubai, Tawheed Abdullah, said that “the tendency of some stores to offer discounts to dealers in exchange for benefiting from their payment of purchases in cash and not with credit cards, which are wrong practices, because it is assumed that there are no privileges for certain payment systems, and not Linking discounts to dealers in exchange for specifying a specific payment method.

He added that "the stores that work on this benefit from the policies of negotiating workmanship with dealers, in granting discounts in exchange for paying in cash, and at the same time they avoid paying percentages when paying with cards, which are granted to credit card companies and banks, ranging between 1.75% and about 3%."

He pointed out that «gold pricing systems in the local markets are not harmed by merchants when paying with cards, as these ratios are included in the operating cost and calculated in the pricing processes, and are calculated with the determination of profit margins, but some stores prefer to compete by granting these offers and obtaining sales and profits. High, and they are unacceptable practices. ”

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- Some outlets resort to these offers to maintain liquidity and increase the attraction of consumers through discounts.

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