TOUGH DECISION “We’ve probably lost customers because of our credit card policy,” admits Fesler, and he’s most likely right. Todtz, of Hawkeye Construction, says that for a year or two, the 84 Lumber he uses cut its rewards for credit card purchases to about one-tenth of what they are for cash or check. Since the change, Todtz says, “we use them less as a supplier. If I have three yards where the costs are the same, I’m looking for who will compensate me the most in other ways.” Adds Cunningham, “The Home Depot hasn’t turned down a credit card,” suggesting that a lumberyard’s decision to stop accepting plastic will cost them business.
CHANGES COMING If policies like these catch on — and with credit card use growing rapidly, chances of this are great — it will ultimately be up to contractors to adjust.
Todtz’s plumbing supply company recently changed its policy to one similar to that of Lamperts, requiring payment three weeks earlier if the contractor wants to use plastic. The policy is only a couple of months old, so it’s too early to say how it will affect Todtz’s business, but he concedes that he may have to adjust his draw schedules to reflect the change. “If I can’t float it with my supplier for three weeks, I have to cover the cost somewhere,” he says.
What could be even more problematic are those situations when a contractor working at the edge of his territory doesn’t have an account with a supplier nearby. Bruce works in the San Francisco area, and some of his jobs are in neighborhoods far from his usual lumberyards. Currently, Bruce and three of his employees use credit cards to buy items from local suppliers as the need arises. As Cunningham suggests, stores such as The Home Depot and Lowe’s won’t soon stop accepting credit cards for such purchases. However, if other yards did, “I’d have to arrange for a cash payment,” Bruce says. “That would be a huge hassle.”