Ron, I recently attended an auction in another state while on vacation. There were some nice pieces of furniture that were being auctioned. The auctioneer stated before the auction that they would accept credit cards for payment but they would charge a 3% processing fee along with the buyer’s premium.
The buyer’s premium was 10%. When you add the credit card fee of 3% plus state sales tax of 7%, it doesn’t seems to be that great of a deal.
There’s not a whole lot you can do about the sales tax but pay it, whether at an auction or at the local grocery store. At an auction, the best way to pay is cash, but I realized that is not always an option for everyone.
The credit card company charges the auctioneer or any merchant, a processing fee. This varies from vendor to vendor. If there was a 10% buyer’s premium, and if someone used a credit card with a 3% processing fee charge to the vendor, the gross to the auctioneer is 7% and then his expenses (labor, utilities, liability insurance, facility charge if he is renting, etc., has to come out of the 7%, thus reducing his margin of profit.
My suggestion is that if you are going to use a credit card at an auction for your purchase, bid accordingly, viz., "does the price I pay for the merchandize, plus the processing fee, make me feel I made a good decision with regards to price versus value?"
Keep, in mind, if you don’t pay that card off within the next billing cycle, you paid more for that item than what you bid, particularly if you have one of those 18 to 24% credit cards.
For more information on auctions, go to my website at www.canSellnow.com. |