Local businesses balance pros and cons of Campus Cash

Whether buying books, pizza, or even a toothbrush in a pinch, Campus Cash is often the most convenient option students have when opening up their wallets.

The program, offered by Campus Dining through the Faculty Student Association and the UB Card Office, is popular because of its easy use in likeness to debit cards, and because parents and students can charge any added card balance to tuition bills.

For off-campus college hotspots like Domino's and Greeks & Sneaks, deciding whether to join the program or renew membership means asking if the benefit outweighs the cost. Many students express an interest in expanding Campus Cash, but some businesses, including Liberty Cab, which recently left the program, say UB's asking price is too steep.

Campus Cash doesn't have any surcharge for users, but non-UB businesses do have to pay a service fee upwards of ten percent on every sale.

"To us, it's necessary," said Tom Jacobs, manager of The College Store on Maple Road. "If we didn't have it, that's a huge chunk of business."

The College Store, part of a national chain of bookstores owned by the Nebraska Book Company, makes more sales with Campus Cash than almost any other form of payment, second only to credit card transactions.

With every Campus Cash transaction, there is a fee that goes back to the university.

"You've got to be willing to give back that six percent," said Jacobs.

In addition to the per-transaction fee, off-campus businesses opt to pay or not pay an annual maintenance fee for the machine that reads the UB cards, which is rented or bought from the school. Not paying the maintenance fee means taking a gamble that it won't break, and if it does, merchants must then pay for the repairs out-of-pocket.

"It's very similar to a credit card fee," said Charles Orcutt, controller of UB's Campus Dining and Shops.

According to Orcutt, businesses pay a percentage fee for all credit card transactions. Campus Cash, like credit cards, work on a scale system -- volume of sales and business type change the percent a company has to pay.

While some business owners and managers think accepting Campus Cash is well worth the fees, others like Jonathon Welch, who owns and operates Talking Leaves on Main Street, disagree.

In past discussions with UB, Welch said he has not found a way for accepting Campus Cash to be a cost-effective idea.

"We just can't afford to do that," said Welch. "It simply does not work financially for us."

A service charge up six percent is almost three times what he pays for credit card transactions, Welch said.

In the textbook business, according to Welch, the markup is already only half of what the profit is on other books. After he pays to ship books in and keep his store open, he said he would be hard-pressed to make any money at all if he had to pay Campus Cash service charges too.

Welch said he already keeps the cost of textbooks as low as he can. The expense of the books is from the publishers, not the bookstore.

"It's not that I want to make life difficult," Welch said. "I'm not willing to raise prices of our textbooks just to cover Campus Cash service fees."

In an era when "everything is plastic," according to Jacobs, The College Store takes Campus Cash enthusiastically.

"Campus Cash is the only way (some students) have to order their books."

A high cab fare

Service and maintenance fees aside, some companies face other obstacles with the Campus Cash program.

As reported last week in The Spectrum, Liberty Cab, a large local taxi service that accepted Campus Cash last year, is no longer a part of the Campus Cash program. Its insurance, which meets New York State and City of Buffalo standards for taxi and livery services, does not entirely meet guidelines set forth by the program.

"They are unrealistic requirements," said Bill Yuhnke, president of Liberty Cab, also known as Yellow Cab. "There's no way a taxi company in Western New York could comply to these standards."

The service fees Yhunke paid for Campus Cash least year were set at ten percent.

"Campus Cash was in the cab business, they were my partner," Yhunke said. "They received ten percent, but we didn't charge students more."

FSA has sent out over 15 letters to cab companies to see if they were interested in joining the program, and Yuhnke said he was not surprised to hear that they got no response.

"I knew no other companies would come up to the plate," Yuhnke said. "We're regulated by the City of Buffalo, and so all taxi companies are the same."

The Campus Cash contract requires participating companies operating vehicles on campus to have $2 million in insurance coverage. Some of Liberty Cab's vehicles meet the requirement, but most do not.

For FSA, the contract is necessary to prevent legal problems if anything were to happen while a student was in a taxi and paid with Campus Cash. According to Orcutt, the decision was made after deliberations with legal council.

"You wouldn't think of suing MasterCard or Visa," Orcutt said. "It doesn't sound logical, but anybody can sue anybody, and (if Liberty Cab didn't have enough coverage) FSA could be dragged into the suit."

Orcutt said it wasn't a choice made lightly, nor is it one FSA enjoyed making. The final guidelines had to take into account concern over FSA's legal exposure.

Yuhnke said there was not a single accident with a student paying with Campus Cash in the entire time Liberty Cab was in the program.

Yuhnke said he prides himself on providing a basic service to the college community, being able to get a safe ride home.

"Leave that extra hundred dollars in a debit account," Yuhkne said. "So that it's always available for a ride home."

Liberty Cab has seen an increase in credit and debit card use this year with students, and very little decrease in overall use of his service, Yuhkne said.

Campus Cash with Liberty Cab was "a successful program and we did not want to see it end," according to Orcutt.

"We'll continue to pursue this," he said.

"Everybody lost on this, but the biggest losers were the students, and they were innocent bystanders," Yuhnke said, referring to the many students who take cabs back to campus after drinking on Main Street or downtown. "I'm the last person who would want to leave a student stranded without a ride, but that's what this is doing. I just hope that it doesn't lead to students getting into their own cars."