for delivery - 10 dollars minimum for cash, 15 for credit. problem?

Discussion in 'The Think Tank' started by boston09, Jun 19, 2018.

  1. boston09

    boston09 Member

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    hey, I just wanted to see your perspective on setting up different delivery minimum requirement which will depend on whether they pay in cash or credit. is it legal? are you doing it? are customers ok with it? do you think your customers would be understanding ? I was thinking lower minimum for cash paid orders and higher for credit...
     
  2. Registered Guest

    Registered Guest Well-Known Member

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    Do you charge a delivery charge?

    If so, why would you have a minimum?
     
  3. durbancic

    durbancic Active Member

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    We have a $10 min order for all deliveries
     
  4. bodegahwy

    bodegahwy Well-Known Member

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    Assuming 3% credit card costs overall the difference between the credit card fee on $15 and the fee on $10 is 15 cents. If the order is worth taking for cash it is worth taking for credit.

    I can see why one would want a delivery minimum. (We have one too) but I do not see the point in aggravating the 8 out of 10 customers that pay by credit card over 15 cents.
     
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  5. pizzapiratespp

    pizzapiratespp Well-Known Member

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    We have a $10 to $20 minimum depending on the zone. The managers can over ride it if needed. Its mostly a suggestion.
     
  6. Mondo

    Mondo Active Member

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    You're just opening yourself up to the complainer that wants to get $10 delivered and pay credit card. Not worth the headache to me. Also, you're kind of encouraging the customer to order a smaller ticket. Our minimum is set at $12, and most of the time when a customer is short, they just add on a soda or a side with no complaints.
     
  7. boston09

    boston09 Member

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    I was actually thinking it should be 15 minimum for cash and 20 for credit...to be honest. how is it even possible to make profit on any delivery that's less then 15?? if we account delivery drivers pay, each delivery run costs me easily 4 dollars in extra labor (driver that is, increased workers comp, increased business insurance premium, auto insurance, other small hussles), nevermind your regular labor that's cooking that order. so, if you delivering 10 dollar order - 30% food cost is 3 dollars, labor 30% 3 dollars, fixed cost say low 15%... you are left with 25% which is on 10 order - 2.50. lets add this delivery fee that I keep of 1 dollar, for grand total of 3.50 profit on 10$ delivery. but if we account that each delivery costs me (and probably you too) 4 dollars (driver pay) then we lost .50cents on this order! whats wrong with my math? oh yeah since it costs us 15c on top as fees on 10 dollar credit card transaction, we are at 65c loss... at least with cash order, order taking process is much faster and easier and at least my driver will be happier to get a cash tip... as for me...I don't think my biz will suffer in any major way if starting tomorrow I loose all my customers who place average orders of 12 or under...and if half of them get themselves into 17 dollars average zone...well loosing those half customers would be pretty great business decision! do I misunderstand something?
     
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  8. pizzapiratespp

    pizzapiratespp Well-Known Member

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    We easily lose money on $10 deliveries. Our cost per delivery is around $9. I’ll take some losses to keep some customers. We do a higher delivery charge for longer deliveries to try to balance out the cost.

    I probably should be looking at a much higher minimum


    Sent from my iPhone using Tapatalk
     
  9. bodegahwy

    bodegahwy Well-Known Member

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    Wow.
     
  10. bodegahwy

    bodegahwy Well-Known Member

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    Having a delivery minimum makes total sense. On the other hand, for us, it just does not come up that much so I wonder if we risk alienating a good customer who just wants a calzone some night. One thing I am sure of is that I can not rely on employees to govern the decision as to when exceptions make sense.

    The OP was about having a different minimum based on payment method which I think is just a recipe for frustrated customers, a pain to implement... and makes such a small difference it is just pointless.
     
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  11. URNUTS

    URNUTS Active Member

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    I think is just a recipe for frustrated customers, a pain to implement... and makes such a small difference it is just pointless.
    Agreed.
    I used to argue w/ other franchisees who would say "I'll deliver a 2-Liter" (WTF?) or "I'll deliver breadsticks for $3.99"
    My minimum was $10 which was, essentially, a medium cheese, and I had a DC which was not in that minimum.
    Domino's tried to show me how having a $4 order of breadsticks delivered was profitable. Maybe if your delivery radius was 10 blocks (and I still would not do it) but mine was 16 miles RT and could take up to 35 minutes RT so..... I'm just not into being a whore. I don't need the $2 profit that badly.
     
  12. pizzapirate

    pizzapirate Active Member

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    Keep it simple stupid. The less decisions people have to consider before making a decision to buy from you the better.
     
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  13. Jeremy

    Jeremy Member

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    We have a $10 minimum and deliver to 4 different cities all the same $10 minimum. If we get a lower $ order we will just bundle it with a larger $ order and give a little longer delivery time on those orders. We do state on our menu the $10 delivery fee is before tax and delivery as well. No way could I charge a different minimum for cash or credit or even check for that matter. What about if someone forgets that they wanted to pay credit card and calls right when the driver shows up? What about gift certificates? Like everyone else said the simple route is the best route. Give and take. Try to keep those customers happy you never know who they are talking to.