ITHACA, N.Y. — The cashier’s refrain, “Cash or plastic?” will need to be rewritten at the GreenStar Food Cooperative.
GreenStar is introducing EasyPay, a new payment system for its member owners. The big idea behind it: reduce the chunk of change that credit card transaction fees take out of their revenues, but without sacrificing convenience.
Holly Baker, the Co-op’s Director of Marketing and Owner Services, wrote in an email to The Ithaca Voice that, “In 2020, GreenStar paid nearly $400,000 in swipe and transaction fees.”
Grocery stores notoriously work under thin profit margins, and GreenStar is no different, Baker confirmed. Circumventing credit card fees is one way to tip the scales in a competitive line of business.
“Ninety percent of the transactions at the register involve debit and credit cards,” Baker wrote. “Depending on the kind of card, the Co-op pays 2 to 4 percent of the transaction total to the bank for each swipe.”
The savings that GreenStar might see from EasyPay come at a crucial time for the grocery store.
The company has steadily grown since its early iterations in the late 1960s and 1970s, with its roots in the Ithaca Real Food Co-op and the Grainstore. In May of 2020, during the frenzied early months of the COVID-19 pandemic, GreenStar moved from a store it had occupied since 1992. But it was big step going to a 16,500 sq. ft. store from a 6,500 sq ft. location while lockdowns paralyzed economic and social activity — and it has left its scars.
In their 2020 annual report, issued in October of 2021, Greenstar reported $2,039,465 in net losses. Consistent cash loss has spurred rounds of layoffs and staff restructuring over the past couple years. Most recently, the co-op laid off 16 staff members at the start of December. GreenStar has been repeatedly requesting its member owners to shop more with them to buoy the business.
Baker wrote that the work to set up EasyPay had begun “well before the onset of the pandemic.”
“Those financial impacts were not the motivation for implementing this system and offering EasyPay. GreenStar has long been considering,” she wrote.
Easypay is supposed to come at a “nominal” cost to GreenStar and utilizes “already existing systems,” wrote Baker. The service was customized for GreenStar from a system that was previously developed at another cooperative store.
GreenStar member owners can add funds to their EasyPay account through the co-op’s online member center. It is described as working like a “gift card.” Easypay requires no wallet or ID, just a membership at the co-op.
As far as Baker or anyone else at GreenStar is aware, no other grocery store in Tompkins County has a comparable system.
“Any business that allows its customers to use credit or debit cards must assume those fees as a standard cost of doing business in the modern world,” wrote Baker. “While we won’t be able to fully eliminate those fees, we hope to significantly reduce that economic leakage from the Co-op and instead reinvest those savings into the Co-op and more support for our local community.”