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Action Alerts

The Philadelphia soda tax will mean the end of Free Refills

Philadelphia is on the verge of passing a sweeping soda tax that could herald the end of restaurants offering free refills for Philadelphians.

It’s a dark day indeed for the City of Brotherly love.

So far, most of the media coverage of the proposal focuses on the two cents per-ounce tax it would impose on bottled and canned sodas and other sweet drinks. This would increase the cost of a typical can or bottle of Coke by about 60 percent.  But little noticed in the legislation is an eighteen-cents-per-ounce tax on the syrup that restaurants use to mix coke. This tax would increase the cost of serving a fountain drink by between 100 and 350 percent.

To see how, let’s take a look at the cost structure of fountain drinks and free refills.

Restaurant industry blog Foodservice Friends estimates that the total cost of serving a 20-oz soda is about 22 cents.

Here is their estimate of how that cost breaks down:

Syrup for a 20-oz cup of soda (8.75 oz with ice): $0.12

20 oz foam cup: $0.07

Lid for cup: $0.01

Straw: $0.015

Total Cost = $0.215 or rounded up $0.22 per soda

The point here is not the specific figures, but to show that syrup is the primary cost in every soda restaurants serve. And this assumes you’re paying $50 for a standard five-gallon case of syrup. That price seems right for off-brand sodas, but is rather low for Coca-Cola or Pepsi, which typically run about twice that price and are likely to cost even more.

So if the restaurant offers free refills—as it should—the syrup used in each glass is pretty much the only cost the restaurant incurs (other than labor) for each refill.

But what happens if the Philadelphia soda tax is imposed? The price of syrup is tippled. The proposal’s eighteen cent per-ounce tax on soda syrup, which seems small, causes a huge spike in the price per cup. On a typical five-gallon case of syrup, there would be $115.20 of taxes—which would double the cost of name-brand syrup and more than triple the cost of off-brand syrup.

What would happen if each refill of soda cost a restaurant 35-50 cents instead of the 10-15 cents it costs now? Well, I can’t image they’d offer free refills for too much longer. Either that or the price of a soda would have to start at $5 to maintain profit margins.

So what can you do to help stop the free refills killing Philadelphia soda tax? Head over to savephillyjobs.com and sign their petition. Then call your representatives and tell them you oppose a soda tax—it’s a good idea even if you don’t live in Philly —because a soda tax may be coming to your town next.

Are soda taxes coming to NYC? [action alert]

Day 32 - GenericLast summer the sushi-and-tofu crowd tried to get Congress to pass soda taxes as part of the healthcare legislation.

Of course, levying extra taxes on American staples like Coca-Cola and orange juice is about as popular as a tax on Christmas cards so the proposal didn’t really go anywhere. But now it appears that the state budget crisis in New York might just bring the soda tax back from the dead.

According to an email alert from Americans Against Food Taxes, Governor Patterson is proposing a whopping 12-cent per can tax on soda and sweetened drinks.  If passed, such a tax would increase the cost of your average 12-pack by nearly 30 percent!

But you can help fight back.

The good folks at Americans Against Food Taxes have put together an email that you can send to your elected representatives. So join Coca-Cola, The American Beverage Association and countless bottlers, distributors and shopkeepers by telling Gov. Patterson not to tax the simple pleasures we all enjoy.

Click here to help!

Fighting back against credit card minimums

Credit Card Minimum[Updated 9/15/09]

They often get a bad rap, but the prevalence of credit cards in America makes life simpler and better for consumers.

  • They free us from the hassle of carrying cash.
  • They protect us from defective products and dishonest merchants.
  • They relieve us from the stealth-tax of lost-change.
  • They help us earn rewards and easily track expenses.
  • They enable us to buy things we cannot really afford, and what is more American than that!

But our right to swipe is under attack.

More and more unscrupulous merchants are imposing European-style transaction fees and minimum purchase amounts on consumers who exercise their right to pay with plastic. Not only are such practices a violation of the merchants’ contract with VISA and MasterCard, but they are also an assault on us, the American consumers.

But you can fight back. Here is what to do when you encounter transaction fees or minimum purchase requirements.

Stand up for your rights: Merchants who impose such fees are in the wrong, and they know it. Simply tell the merchant that you will not be buying that extra candy bar to meet the minimum purchase requirement and that they cannot legally impose it. You might have to argue the point, but in my experience, the merchant always backs down. Non-Toxic Reviews has a handy wallet-ready summery of the VISA and MasterCard contracts that you can cite if needed.

Call your bank or VISA if needed: If a merchant is particularly intransigent, pull out your cell phone and threaten to call VISA or your bank. You can find the 1-800 numbers on the back of your credit card. Usually the threat is enough to make the merchant back down. If you need to file a report, do it. MasterCard and American Express will even let you do it online.

Write your credit card company and bank: VISA, MasterCard and the bank that issued your credit card should be enforcing the rules. But the fact that merchants brazenly ignore their contracts means that the credit card industry isn’t doing its job—and that hurts all of us. Write VISA, MasterCard and your bank and tell them it is time to step up enforcement  like I did. You can find the appropriate address on Consumerist.com.

[Updated 9/15/09]

Scream “YOU LIE!”: Politicians may love scenes—they raise money after all—but shopkeepers hate them. In a crowded shop or restaurant, screaming “YOU LIE” when confronted with a minimum purchase amount will not only get the merchant’s attention, but it will also draw the gaze of everyone else in ear-shot. Now is your chance to quickly outline your case. The merchant will either quickly back down or throw you out on the street. Either way, everyone will remember what you said. [end update]

Join the resistance (not recommended): A small resistance outfit called merchantfraud.org is distributing stickers that identify merchants who break the rules as fraudsters. They are encouraging people to sticker these businesses as an act of public awareness vandalism. While I don’t recommend this, I understand the frustration that is breeding it. [update] Merchantfraud seems to have taken its website down. Perhaps they’ve gone underground. You can see what the stickers look like here.

Standing up to merchants who break the rules might seem like a jack-ass thing to do, but when you do it you’re not only saving yourself money, you’re defending America.

The Founding Fathers stood up to a surcharge on tea, now its your turn.

Life, Liberty and the Right to Swipe!

Previous topics mentioned in this post:

#6. Chargebacks and Credit Cards

€5. Different sized banknotes

An open letter to VISA

What is more America, Big Gulps or Credit Cards?

ACTION ALERT: Senators aim to introduce European-style Credit Card fees

ACTION ALERT: Greatest charity ever?

deep-dish pizza

While driving around town today I spotted an ad on the back of a Coors Light beer truck for what might be the greatest charity ever: Pizzas 4 Patriots.

The folks at Pizzas 4 Patriots understand that when you are overseas, nothing quite makes you feel at home as drinking a cold beer and eating a greasy pizza. This phenomenon explains why Americans instinctively flock to Pizza Hut locations when traveling in Europe (plus, Pizza Hut offers free refills).

Apparently our military men and women serving in Iraq face a chronic shortage of pizza. To remedy this, the folks at Pizzas 4 Patriots have chartered a DHL cargo plane and are trying to fill it with pizzas and beers that they hope to deliver to our military men and women in Iraq before the 4th of July.*

If you can’t have a backyard cookout to celebrate the 4th of July, the next best thing is a cold beer and a greasy pizza.

Check out Pizzas4Patriots Providing pizza for our troops overseas! to see how you can help. The website even plays “I’m Proud To Be An American” in the background. Nice.

*The Pizzas 4 Patriots website does not mention shipping beer overseas, however the ad on the back of the beer truck did.

Previous topics mentioned in this post:

#17. Five-dollar large pizzas

An open letter to VISA about unscrupulous merchants

Earlier this week, after a particularly heated exchange with a local merchant about minimum purchase prices, I realized that I was spending on average about 30 minutes a week fighting for the right to use my credit card. So I decided to write VISA and plead with them to take action. Below is a copy of my letter.

Visa U.S.A. Inc.

P.O. Box 194607
San Francisco, California 94119-4607

Dear VISA:

First let me thank you for the great service you provide.

A lot of people like to say horrible things about you and credit card issuing banks these days, but I think you are great. I love my VISA card(s), and I am not afraid to admit it.

VISA is quick, it’s easy, it’s paperless and it’s everywhere I want to be! What’s more, using my VISA card means every purchase is automatically categorized, which makes budgeting with free websites like Mint.com a breeze. Using my VISA card is so convenient that about a year ago I abandoned cash all together—and I wouldn’t think of going back.

I believe the widespread acceptance of credit cards at no charge to consumers is one of the things that make America great. I value the right to pay for a 99 cent can of coke with a VISA card, and I am willing to defend it.

If I encounter a merchant who tries to enforce a “minimum purchase requirement” to use a credit card, I challenge them. I politely inform them that their contract with VISA prohibits them from charging fees to use a credit card or stipulating a minimum purchase price. The merchant always backs down.

I don’t mind doing my part to protect my right to swipe, but I am concerned that more and more merchants are trying to institute minimum purchase requirements. Everywhere I go these days, from party stores to gas stations to cafés to late night pizza places, merchants are trying to circumvent their VISA contracts—and it hurts me, the consumer.

I am doing my part to fight back and stand up for the rights of VISA users everywhere, but I only have so much time in the day. I cannot keep carrying all of the water for you.

So please VISA, step up your enforcement of credit card minimums and surcharges. If not for yourself, then do it for the loyal VISA users everywhere, and for the American way of life.

Previous topics mentioned in this post:

#6. Chargebacks and Credit Cards

€5. Different sized banknotes

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