BusinessReport.com

The world has turned to plastic, but there are a few businesses that—gasp!—don’t accept credit or debit cards.

Few businesses enjoy dealing with card companies, especially the “interchange fees” they pay on every transaction. Those fees are rising. If the competition is accepting cards, what is a poor businessperson to do but follow suit? Accept the cards, pay the fees and smile. It’s the cost of doing business.

But not everybody sees it that way.

Several businesses still cling to the old ways, though they’re scarce these days. Fleur de Lis Cocktail Lounge, which says “old Baton Rouge” like no other place, is one of the holdouts, where tradition is as thick as its pizza sauce. The 60-year-old establishment has never taken credit cards. They will take a check—under the right circumstances.

Owner Pam Rushing, who as a child lived with her mom in one of the old guest cottages that once stood on the property, likes things the way they are, even if the occasional customer is forced to dash across the street to an ATM. Rushing admits she’s “not a big fan of credit cards” and would prefer never to have to take them.

“I know a lot of people use them wisely,” she says. “I would say the majority don’t.”

Rushing’s old-line customers throw a fit at the sight of any evidence of the passage of time. Thus the beer glasses are still juice glasses, the pizzas are still rectangular, and the Falstaff sign stays on the wall behind the bar even though Falstaff hasn’t been served there for years. When repairs are made, they’re dressed up to look old.

It’s still 1972 at Fleur de Lis, minus the cigarette smoke.

“It’s just been that way so long, and it just doesn’t seem necessary to change it,” Rushing says. “It’s one of those if-it’s-not-broke-don’t-fix-it kind of things.”

Taking credit cards would add more complexity on top of all the other headaches of running a business. And Rushing isn’t attracted to the idea of paying a fee on every sale involving a credit card.

Those fees are getting higher. Plastic is fast eclipsing cash and checks as consumers’ preferred method of payment, and retailers nationwide are complaining that rising fees are forcing them to raise prices and threatening to put them out of business. Fees differ based on the type of card, credit or debit, though most are a flat fee of 10 to 25 cents per transaction, plus a small percentage of the sale.

Credit card companies’ profits from interchange fees surged 33% between 1990 and 2004, according to the U.S. Government Accountability Office. The companies argue that the higher fees are justified because of the growing number of perks credit cards offer.

Nevertheless, Congress appears ready to join the fray. Sen. Christopher Dodd, D-Conn., is taking a close look at the issue and plans to introduce legislation that would regulate credit card companies’ billing practices—including fees. Dodd says the matter bears examining because high fees are making it more expensive—thus more difficult—for consumers and businesses to participate in the country’s economy.

Other members of Congress are promising to make credit card fees an issue as well. Sen. Norm Coleman, R-Minn., told a panel of bank executives recently that interchange fees are forcing merchants and retailers to charge more at a time their profit margins are already “extremely thin.”

To Charles “Pokie” Pocorello, owner of Pocorello’s Italian Grocery & Deli on Coursey Boulevard for the past 23 years, it’s a non-issue because he doesn’t take credit or debit cards. He might, he says, if card issuers would let him tack the fee onto the customer’s bill.

Then again, he might not.

“We’ve gotten around it for years,” Pocorello says. “I’ve probably lost business over it. I’ve had people come in and tell me, ‘If you would take cards, I could give you business.’”

Pocorello realizes corporate customers on company cards are less likely to bring a client in for lunch because of the no-credit-card policy. Nobody has to go across the street for an ATM, though, since Pocorello’s has one in-store. He says he has no problem accepting checks, though customers often write them for “nickel-and-dime stuff.” Pocorello suspects the same thing would happen if he started taking cards.

He admits he’s old-fashioned and would rather not. At the same time, Pocorello doesn’t rule out being forced to one of these days.

“Never say never, but I’m hardheaded,” he says. “We still roll meatballs. We do everything the old way. We still make sauce. I’m out of step with everybody.”

Ronnie McIntire, who owns Overpass Cleaners on Perkins Road, says he’s never taken credit or debit cards, but he does extend credit to customers who’ve done business with him for any length of time. It’s an in-house charge, like a lot of businesses used to do, with customers settling up the end of each month.

Not taking cards hasn’t been a problem, McIntire says. The main reason he doesn’t is the extra work involved.

“The biggest reason is my help—the ladies up front who man the counters for me,” McIntire says. “The amount of time that’s taken up with that, it really does amount to a lot. You almost need to add another lady on the front counter to take care of it.”