Dropzone Credit Charges

[ElJosh 0]

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I hate plastic! Unfortunately credit has become a way of life, so I have a machine sitting on the counter. The processing company debits my checking account a few hundred dollars a month, and I'm just a small one Cessna 182 DZ. I maintain a land line phone line because of the machine, and pay something like $40 a month if I process nothing, so around $100 a month just to have the machine sitting there. You're not happy about your 3% up-charge, my policy is 5% rounded off. As the guy who has to pay the processing fees, from my preservative when you hand me a credit card you're saying "fuck you," so I simply return the sentiment, in the form of "full price."

To my knowledge it is not illegal in the state of Kansas to give a cash discount, which by the way you get if you write a check, or even use a debit card (it costs me a flat fee of $.40 to process a debit transaction.)

No Wal-Mart does not charge you to use your credit card, but I'm not Wal-Mart! Small businesses, with a relative low amount of credit transactions pay the highest fees. Wal-Mart is large enough that I'd imagine they're their own bank/credit processor, so it's apples and oranges.

I may be a bit old school, I am in my 40s. I feel almost naked if I don't have a little cash in my pocket. It's simply foreign to me, and I'll say stupid when I see people who don't have as much as pocket change, and will use plastic to buy a candy bar.

Yes, this subject if a pet peeve of mine. Visit the ATM, and carry some good old fashion Cash!!!

http://www.aircapitaldropzone.com/prices.htm

Have a nice day.
Martin

...but Martin I am a drunken bastard and if I have cash in my pocket I will just get drunk and loose it. And remember you are a DZO, so in light of just sayng Fuck You, I pay with plastic. Though I think you have actually told me Fuck You after I've paid.
See You At Freaks, Baby!!!!
~El Josh AKA Ruby

DS #149
Yes I only have 3 jumps...it's the magic number dude.

[chutejump 0]

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Not sure if this is the right place for this so sorry if not. Recently jumped at Davis and found they charge a 3 percent fee for experienced jumpers using credit cards even when they buy blocks of jumps that cost the same as a tandem jump. I havent been around much, but is it normal for dropzones to punish experienced jumpers like this? Shouldnt it be a fee for all credit transactions or a fee for all trans under a certain amount? Confused and a little annoyed.

Lets face the facts! There is no profit in providing jumps to experienced jumpers! None, Nada, Period! All of the DZOs that I know (to include myself) cannot afford the loss incurred when you use the convience (to yourself) of a credit card! It takes a brake even operation, and truns it into a loss (for thr DZ) so you can be less responsible with form of payment! I believe that all would agree that you must at least pay the amount that is needed to cover the service you wish to purchase, if this is also the convience of paying with a CC than you should pay for the service!

[skydived19006 4]

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if this is also the convience of paying with a CC than you should pay for the service!

I had one fellow who I had asked several times to pay with something other than plastic. Cash, don’t carry cash. Check, don’t carry a check book. I even offered to keep his check book at the DZ. To easy to keep track of my transactions with the card. The very day I started passing along the cost of processing a card to the jumpers, primarily due to the one guy, guess what. It all the sudden became convenient for my fun jumper to carry his checkbook. Draw your own conclusions.

Martin

Experience is what you get when you thought you were going to get something else.

AC DZ

[gemini 0]

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Lets face the facts! There is no profit in providing jumps to experienced jumpers! None, Nada, Period!

I call bullshit again! We've discussed this before. The dz gets $200 for a tandem in a year and $1000+ from the fun jumper over the year. Even at a lower profit margin on the fun jumps he makes more money off the fun jumper over a year than any tandem.

If he doesn't, he isn't a very good businessman.

DZ's traditionally get 1/3 of their total revenue from tandems, 1/3 from students, and 1/3 from fun jumpers. Who would give up 2/3's of their revenue to only do fun jumpers.

OK back on topic: Some DZ's charge cash vs credit card jump prices to recover the cc fees.

Blue skies,

Jim

[chutejump 0]

I call bullshit again! We've discussed this before. The dz gets $200 for a tandem in a year and $1000+ from the fun jumper over the year. Even at a lower profit margin on the fun jumps he makes more money off the fun jumper over a year than any tandem.

If he doesn't, he isn't a very good businessman.

DZ's traditionally get 1/3 of their total revenue from tandems, 1/3 from students, and 1/3 from fun jumpers. Who would give up 2/3's of their revenue to only do fun jumpers.

Thank You! Everytime I start to believe that the average experienced jumper starts to understand that they pay only what the cost is to provide them service, someone like you comes along and brings me back to the reality! THAT YOU DON'T HAVE A CLUE!

[Andy9o8 0]

Your writing is a bit unclear. Are you saying that Gemini does not have a clue? If so, please explain (clearly, please) the specific reasons why you think he's wrong.

[chutejump 0]

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Your writing is a bit unclear. Are you saying that Gemini does not have a clue? If so, please explain (clearly, please) the specific reasons why you think he's wrong.

There is only one reason why I believe Gemini to be incorrect!
30 years experience as a DZO! I have owned and operated many forms of aircraft during that time, single and twin piston, single and twin turbine, to provide lifts to any and all types of jumpers. I will say that if a DZ were forced to operate on only the profit produced from lifts of the experienced jumpers that most would be forced to close in an very short time!
I'am assured the response would be "well that is only 1/3 of the total brought in as Gemini pointed out"
"Question!" Than how can a DZ continue to operate and produce profit without the experienced jumpers? even if only using the profit from Student training or from Tandem individually but not necessarly both?
"Answer" the profit (if any) is so small from the experienced jumpers that the service cannot and will not support itself without Students or Tandems to cover the costs.
"Bullshit you say?"
Than find me a Club that does not provide Student training or Tandems! "Reason" they find out very quickly that what they pay will not support the DZ and activity alone! Profit must be made! Basic Business 101!
It is the 3 legged stool theory, each leg must support its own weight, for the activity to stay stable, unfortunately in skydiving the stool has one very short leg!

[Mustang69 0]

Businesses take credit cards because they believe they'll get enough additional business to make up for the extra cost. DZO's realize they can lose tandems or students if they don't take credit cards. They may not mind paying the merchant fees when it's a student or tandem charge. But if the amount they charge for a regular lift ticket doesn't have enough profit built in to cover the cost of the merchant fee, they don't want to lose money just to offer convenience.

Walmart and larger stores pay a smaller percentage for charges than what a small business pays. Cash or credit, the prices are the same and the cost of allowing credit cards is factored in. If dropzones factor in that cost to keep prices the same, the price of a lift ticket would go up for everybody.

Even if dropzones have a merchant agreement not to charge more for credit card purchases, I'd like to be able to use a credit card in an emergency even if it cost a little more. The last time I used a credit card to jump was at the WFFC when there was one price for all and they were charging $2 more per jump than I expected.

The way I look at it is if you know it costs less to use cash, take cash. If the DZO would rather you use cash, take cash. If I plan to make a lot of jumps, I like to pre-pay with cash so I don't have to worry about losing/drinking/spending it all away. That is unless the DZ is reluctant to give refunds even if you don't get all the jumps in that you paid for.

[marks2065 0]

if this is true that the experienced jumpers don't have profit, then how does an airplane owner that rents his planes to a dz cover his costs? he doesn't get the profits from the dz only dollars per slot regardless of the type of jump that slot is used for. this alone shows that the experienced jumper does make a profit for the dz. the tandems and other students do give the dz a greater profit per jump but this profit has to be split with the costs of jumping the students like gear costs, instructors, class rooms and other things needed for students. without students the dz would not need alot of stuff and that would greatly reduce the costs of doing business. what does 10 tandem rigs, 10 solo rigs, 500 square foot of building for classrooms, and instructors cost?

now back to the topic, students average cc charge is higher and that reduces the charges from the cc company. the higher dollar sales and total dollars rang up reduces the percentage that the dz is charge to complete a transaction. at $500,000.00 anual sales at $300.00 per transaction visa mastercard, and discover charge about 1.7 percent plus the trans action fee for standard cards and about 2.5 percent for rewards cards. Amex sucks at over 3 percent plus transaction fee. so in most cases the dz is making a profit when charging 3 percent for cc use.
just a little info to piss off the cc paying jumpers

edited to ad : you don't need a phone line to accept credit cards they can be handled on line and almost every dz has internet.

[DanG 1]

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if this is true that the experienced jumpers don't have profit, then how does an airplane owner that rents his planes to a dz cover his costs?

Airplane owners usually rent planes "dry". They don't really care who's using the seatbelt, it's all the same to them. The engine(s) don't care who's using the seatbelt either, so it takes just as much fuel to get a tandem student to altitude as an experienced jumper. Really, no one cares who's using the belt, but if the DZO just averged everything out and charged the same price to everyone, fun jumpers would find themselves paying a lot more per jump, just as tandem students would see their price go down. DZO's charge more to tandem students because they can. It's supply and demand, that simple. It also helps keep prices low for experienced jumpers. It is possible for small club dropzones to exist without tandem and/or student ops, but I think you'll find that it is very hard to motivate people to keep a dropzone running if no one is getting paid for their time, effort, and expertise.

My DZ applies the same cash discount to students and experienced jumpers.

- Dan G

[marks2065 0]

students have added expense that they have to pay for that is why they pay more.


as to your discount for cash , my credit card prossesing company has in the agreement that i will charge the same for cash or credit and i cannot discriminate against credit card customers, and that means credit and cash customers pay the same and it needs to be the advertised price. it doesn't say anything about giving discounts to cash but after discussing it with them they can take away your credit prossesing ability if you don't follow the guidelines set up in the agreement. if someone disputes a charge with you and you get investigated you could be black listed by the cc companies and then how will you get business?

[gemini 0]

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THAT YOU DON'T HAVE A CLUE!

And you my friend are buying a load from a DZO!

I have current first hand experience with the DZ financials and everything I've told you for a turbine DZ is the truth. I will give you the Cessna DZ's though because they don't have the volume they need.

Since you say you have 30 years experience and could not make a profit with fun jumpers then I have to assume that you either were being overcharged for aircraft, weren't including all your cash receipts, or had a crappy accountant/accounting system.

Let me restate so you can understand: In today's business climate, a DZO cannot afford to give up 2/3's of his business to only do tandems.

Why? Because the tandems who would become students have no incentive to stay at that DZ. They see no other activity, but tandems; there is nothing else going on, and in the long-term that DZ will go belly up if a local competitor offers "full-service" to everyone.

Remember without fun jumpers there are no parties, no load organizing, no mentors, no SCR's, etc.

Blue skies,

Jim

[DanG 1]

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students have added expense that they have to pay for that is why they pay more.

I suppose you could look at it that way, if one of the "added expenses" is profit for the DZ. I'm sorry, but the profit margin on a tandem (in % of price) is much higher that that for an experienced jumper. As someone else pointed out, though, the experienced jumper will make many more jumps over the year than a tandem, so the total profit may be higher for that individual. Either way, the "added expense" of students does not account for their higher price. This is clear to anyone who has ever been behind the scenes at a DZ.

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as to your discount for cash , my credit card prossesing company has in the agreement that i will charge the same for cash or credit and i cannot discriminate against credit card customers, and that means credit and cash customers pay the same and it needs to be the advertised price. it doesn't say anything about giving discounts to cash but after discussing it with them they can take away your credit prossesing ability if you don't follow the guidelines set up in the agreement. if someone disputes a charge with you and you get investigated you could be black listed by the cc companies and then how will you get business?

Granted, but still industry standard.

- Dan G

[Fast 0]

Jump prices for experienced skydivers at my dropzone don't turn a profit. They cover the cost of putting the plane in the air. That's it. Even if we were doing 100 times as many experienced skydiver slots as we do now, there would be no money left over afterwords to pay for all the extra shit that skydivers like to have. Buildings, bathrooms, etc, etc. I could do 100,000 experienced skydiver slots and not make any money. I could raise the prices on the experienced slots, but then people jump ship and go to other DZs. Lets face it, there is only so much money to go around for a skydiver. If prices go up they just jump less. Unless we are churning out the tandems, all the fancy shit the skydivers want doesn't happen.

On the topic of credit card fees, yeah they suck. To the original poster, deal with it. Even if the dz doesn't appear to be charging a fee, they are. They just are screwing the person who pays cash too. I should restate that, the credit card companies are the ones screwing everyone else. If it wasn't for the fees, things would be so much cheaper. In some situations, the CC fee goes into things 3-4 times. Get hit at the "pay-at-the-pump" FBO, the FBO gets hit if they don't pay cash/check, the dz gets hit at the retail counter, the students get hit, every time we buy something more CC fees. Its all a big scam in the name of convenience. None the less at my DZ the CC fee cost is built into every slot, no matter how it is payed for. I really appreciate the people who pay with cash, I really do. I just can't take the gamble that I am not going to be busted for charging a Cash discount. So everyone has to pay it. The dropzone sure can't afford to eat the fees.

Also, whoever said that the cost of CC fees is built into the assesment of tandem student prices is right. It is.

~D
Where troubles melt like lemon drops Away above the chimney tops That's where you'll find me.
Swooping is taking one last poke at the bear before escaping it's cave - davelepka

[gemini 0]

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Jump prices for experienced skydivers at my dropzone don't turn a profit. They cover the cost of putting the plane in the air.

At my dropzone the jumper pays $23 per jump. A full plane of 23 jumpers costs $11 per slot, fuel at $5 per gallon is around $5.43 per jumper per load, pilot get $0.65 per jumper per load.

This returns a gross margin to the DZ of $5.92 per jumper per jump or 25.7% from which the DZ pays overhead expenses. The breakeven load is $18 jumpers at $5 per gallon fuel.

A DZO has to have the discipline to not fly fewer than the breakeven humber of jumpers on any fun jump load, or to mix tandems, students and fun jumpers on each load.

If a DZO makes a decision to fly at a loss, that doesn't have anything to do with the profitability of his service segment. It is a bad business decision that he made. Do it enough and he is out of business.

Again guys you gross $200 for one tandem one time. And at 100 jumps per year you net $592 per the fun jumper.

If you have enough tandems to fly every load, all day full and would have to bump a tandem to fly a fun jumper that is a different story.

But if I have a plane with an empty seat, I'm putting a fun jumper in it and keeping his $5.92. If I have a plane sitting with no tandems, I'm putting at least 18 jumpers in it, breaking even on the load, and keeping the DZ alive and active.

And all the fancy shit, everyone pays for that including the tandems because it is overhead! Ask yourself who it is really for - Fun jumpers who jumped for years without fancy shit, or the tandems, their families and guests who are at the DZ all day waiting?

And don't forget some of the fancy shit is there not because the customers demanded it, it is there because the DZO wanted it because some other DZ had it and his DZ is just as good as theirs. Again, maybe a bad business decision by the DZO to invest so heavily in infrastructure that is not needed.

It's just another part of the marketing plan to get the tandems in and keep them on the DZ to spend money. If a fun jumper spends a little while he is there, so be it, but most are out of there at the end of the jump day. Don't get me wrong, I love a DZ with a good bar like the Bombshelter in Perris, but my DZ doesn't have one and I still go there!

Blue skies,

Jim

[Greene 0]

Spoken like a true CPA

Might work at the end of the year for tax purposes..

You are talking about aircraft, fuel, maintenance on aircraft and pilot expenses only.

Give us the total operating expenses just to keep the doors open.


You seem to be "out of the loop", as far as the day to day and monthly operations of a DZ.


Skies blue
SGC

[JohnDeere 0]

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Again, maybe a bad business decision by the DZO to invest so heavily in infrastructure that is not needed.

You mean like Spaceland. JK You guys have a great DZ down there! I have only been there a couple of times, but it is my home away from home

Edit to add Hey Greene

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Spoken like a true CPA

I dowt it You might want to do your home work before you claim things you dont know I promise he is more than a Cpa there.

Nothing opens like a Deere!

You ignorant fool! Checks are for workers!

[gemini 0]

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Might work at the end of the year for tax purposes..

Boy are you off base! If I was doing it for tax purposes it would be a loss due to non-cash depreciation expenese.

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Give us the total operating expenses just to keep the doors open.

That varies based on volume of operations. For example, larger facility generates more repair and maintainance expense, more electric, more advertising expense generates more telephone expense, more traffic means more parking, road issues, etc. None of which directly put one jumper in the air. Again we are talking about the money lost on fun jumpers. I am telling you you can make money on fun jumpers and you can make a lot if you have the volume.

If your overhead expenses are out of line with your sales (jump revenue) that is an entirely different matter as I have discussed.

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You seem to be "out of the loop", as far as the day to day and monthly operations of a DZ.

I wish! And that would make you right somehow?

Blue skies,

Jim

[TROGDOR 0]

getting a little off topic, but it seems to be where the thread is going,

DZ Finances are an interesting animal...

Most DZ's swear they are barely getting by charging ~$24 for a lift ticket and ~$190 for a tandem.

I guess if you were going to charge say, $13 for an up jumper, you would survive by passing that on to tandems. Oh, wait....

I'm sure I'm missing something, but it makes you wonder....

[gemini 0]

You hit the nail on the head! A lot is like smoke and mirrors, but the rest is just bad management and that includes bad decisions all across the board...from employee management, facilities, location, business planning, banking, insurance, aircraft management, cash planning, etc.

Blue skies,

Jim

[bodypilot1 0]

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I guess if you were going to charge say, $13 for an up jumper, you would survive by passing that on to tandems.

$13 jump tickets and $100 tandems? No way, you'd have to be crazy......

www.WestCoastWingsuits.com
www.PrecisionSkydiving.com

[marks2065 0]

Again guys you gross $200 for one tandem one time. And at 100 jumps per year you net $592 per the fun jumper.
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the net for one tandem is less than $100 . you charge $190 for a tandem less $40 for instructor, $10 for packing , $46 for 2 slots and $5 for cc charge that leaves $89 profit and then you subtract gear cost and maint leaves you with about $40 profit per tandem so yes they are more profitable than a fun jumper but not by much. and they won't come back and spend more but a fun jumper will

[gemini 0]

I intentionally omitted the tandem direct costs because there were to many numbers in the discussion already, but you are absolutely correct. What I really wanted to show that there can be a profit in a fun jump if managed correctly.

Blue skies,

Jim

[marks2065 0]

if dzo's cry broke they think they might get a little less crap from the jumpers when they raise prices. it takes a plane running all day to support a turbine.


A dz that runs $500,000.00 in credit cards has about $10,000 - 15,000 in credit card processing fees. these processing guys have the ultimate scam. money from both ends of the transaction.

[gemini 0]

That's about right. I've seen $45k - $50k in cc fees.

Blue skies,

Jim