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A Little About Funding LinuxFund.orgA Little About Funding LinuxFund.orgPosted Oct 3, 2003 4:47 UTC (Fri) by torsten (guest, #4137)Parent article: Software suspend work funded
Take a look at your credit card, if you have one. What name is on there? Many people don't realize that a percentage of credit card purchases are given directly to the credit card company. This percentage was instituted by federal law (paid for by the credit card companies), and is determined by the companies. Another law prohibits merchants from disclosing their percentages, or trying to recoup the difference by chargin you more (which means they also can't charge you less for cash payments). The percentage paid varies by volume, from 0.5% to around 7%. I believe the majority of businesses pay around 3-4%. These numbers are held in tight seclusion, so I can only speak from the few businesses that I have personally run. You might be surprised that a percentage of what is paid to the credit card company is also paid to the name on the card. So if you have your bank's name, some affiliate group, or other name on the card, then you are paying, with every purchase, a few percentage points. These are usually kickbacks to your bank by your credit card company. Your only benefit is having some sort of pretty picture on your card. If your credit card company's name is on your card, then they are getting even more of your money (and are adding no additional benefits). Well, that's how LinuxFund.org works - you sign up with MBNA for a credit card, and they get a percentage of your purchases. Since I already had an MBNA account from long ago, I was one of the first to sign up for the LinuxFund credit card - I just called MBNA and requested a change of affiliation (from MBNA to LinuxFund). They were not happy, and I had to be very insistent, but they gave and now I have a penguing, Tux, on my mastercard. I remember a short time after LinuxFund announced the availability of the MBNA cards - shortly afterward MBNA announced they were surprised about the interest in the card - I like to think switching affiliations surprised them some. :) So, if you haven't done so already, and want to manage your purchases with a credit card in the United States or Canada, then sign up for an MBNA LinuxFund credit card (or switch affiliations). LinuxFund receives money, which they then donate to open-source and good works projects.
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A Little About Funding LinuxFund.org Posted Oct 3, 2003 20:37 UTC (Fri) by komarek (guest, #7295) [Link] I too would like to encourage people to get a linuxfund card. Not only does it help linuxfund.org, and hence several GNU/Linux projects, but it is also a good way to meet store clerks and waiters/waitresses. ;-) Most people have no idea what the penguin is for, but everyone thinks Tux is cute. I live in Pittsburgh, and occasionally people think I'm supporting the Pittsburgh Penguins hockey team. I don't make a fuss, explain or correct them because they'll find out about Tux once it's important to them. Of course linuxfund.org gets their percentage regardless.-Paul Komarek
More about how credit cards work Posted Oct 5, 2003 1:04 UTC (Sun) by giraffedata (subscriber, #1954) [Link] A few of corrections about the credit card industry:First, a clarification: a "credit card company" is a bank. Banks issue credit cards to people and banks make arrangements with merchants to accept credit cards. To provide a cohesive system, banks form associations that set up computer networks and uniform rules and such. Visa and Mastercard are examples of those associations. I can't believe most people don't know that it costs a merchant a per centage of the purchase amount to do a credit card transaction. How else would credit card processing and risk be paid for? There isn't a federal law prohibiting the merchant from passing along the cost of the credit card transaction. There are state laws (I don't know how many states) and contracts between the merchants and the banks. And said contracts are usually required by the credit card association. California has such a law, but it doesn't really prevent the merchant from charging the customer the fee. It explicitly says it's OK to offer cash customers a discount, so it's really just a matter of presentation. I don't know of any law that prevents a merchant from disclosing the fee he pays. I assume merchants that get really good deals have contracts that prevent them from disclosing how good, though. I managed a small California store that took credit cards a few years ago. We got just about the highest rate possible for a brick and mortar store, and on MC and Visa it was 3%. Amex, Diner's Club, and Discover were more. Since then, the industry has moved to a more sane pricing structure where the fee is a fixed amount per transaction, plus a per centage of the amount. I heard 30 cents per transaction plus 2% is typical. By the way, California also has a law, and the banks have contract provisions, preventing the merchant from setting a minimum purchase for credit cards. Neither this nor the credit card fee rule are enforced, even when consumers complain. The bank does pay part of its fee to the organization named on the card (the "sponsor"). This is not a kickback. A kickback is like a bribe - a payment for betraying a trust. This is simply a commission for providing a legitimate service -- selling the credit card account.
More about how credit cards work Posted Oct 5, 2003 17:56 UTC (Sun) by torsten (guest, #4137) [Link] "I managed a small California store that took credit cards a few years ago. We got just about the highest rate possible for a brick and mortar store, and on MC and Visa it was 3%. " Hmm, in 1995 I paid 6% for MC/VISA. I was really a "little guy" (one-preson business), so I guess I got screwed. :) "The bank does pay part of its fee to the organization named on the card (the "sponsor"). This is not a kickback. A kickback is like a bribe - a payment for betraying a trust. This is simply a commission for providing a legitimate service -- selling the credit card account." Question is, if you manage to sell a credit card account, which the credit card holder retains for the term of his life, then should the sales organization receive a commission for the life of the customer? It's hard for me to justify that. The people who sell credit cards receive a one-time commission or hourly wage, but the sponsor receives a commission for a very long time. The value of the long-term commission is very high, however the organization does not provide any ongoing service which would justify the ongoing commision - a one-off commission is more appropriate. Therefore, I believe this ongoing payment plan, which the consumer pays for without receiving additional benefits, is not as legitimate as it sounds. Kickback just seemed a nice word to describe it.
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