October 25, 2010

Local Restaurants Plan To Abandon City Bucks

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Angered by Cornell’s price hikes to the City Bucks program, at least eight restaurants –– including Collegetown Bagels, Aladdin’s Natural Eatery, Ruloff’s Restaurant and the Hot Truck –– will no longer accept City Bucks beginning Nov.1. Many of the other 19 restaurants that currently offer the program have said they plan to discontinue it at the end of the semester.

While University officials could not provide details about the precise changes Monday night, several restaurant owners approximated that continuing to offer City Bucks would require a new $30 monthly charge for each City Bucks machine, a jump from four to five percent in monthly fees based on total sales and a new 10-to 15-cent surcharge per transaction.

According to the University, the restructuring of the City Bucks program was necessary to comply with new changes to the Payment Card Industry requirements –– a set of national standards developed by Visa and MasterCard that ensure the safety of credit and payment card transactions.

Administrators said that the changes to the PCI Data Security Standard guidelines compelled them to outsource the City Bucks program to CBoard, the third-party private company that came up with the modifications to the program.

“It was not feasible for us to have done [the restructuring] in a timely and cost-effective manner ourselves, so we went to a third-party outsource,” Frank Carollo, Cornell Dining City Bucks liaison, said.

Karen Brown, director of Campus Life Marketing and Communications, added that the administration met with each restaurant to brainstorm potential solutions before they opted to outsource City Bucks to CBoard — which will maintain separate contracts with each restaurant and one with the University — but that ultimately this was the “best offer.”

Despite the University’s claims, many store owners said they felt the changes were unfair and unreasonable.

CTB owner Gregor Brous called the new 10- to 15-cent transaction fee for each purchase “an absolutely prohibitive cost” –– particularly for a store that, like CTB, sells high volumes of goods at cheap prices.

He called City Bucks “an antiquated system” that slows business down with long card processing times.

Like Brous and many other restaurant owners, the owner of Jason’s, Jason Burnham, predicted City Bucks would not exist in a few years, citing declining student use of the program since its inception.

Burnham said Jason’s would “probably finish out” this semester on City Bucks, but said that future involvement in the program was contingent on a number of factors.

Aladdin’s owner, Sam Schuepbach, said the popularity of City Bucks has been in decline. Schuepbach said Aladdin’s discontinuation of City Bucks would not significantly hurt revenue, partially because “every student has a credit card.”

Schuepbach said, “of course [Cornell] thought everybody would continue switching over,” but that City Bucks proved to be “more of a transactional headache than it was worth.”

“They’ve raised the prices to bump us all out,” Rulloff’s bar manager Chris Holmes said. He added Rulloff’s would not be hurt since “students are just as happy to switch over to a credit card.”

Many students, however, said that the discontinuation of City Bucks at their favorite locations might alter their purchasing patterns.

“That’s the worst news I’ve ever heard,” Van Barbeau ’11 said in reference to the discontinued use of City Bucks at CTB.

“I love City Bucks because it’s not real money to me … I bursar it and my mom gets it as tuition,” Barbeau added.

Alexandra Post ’12, who called the discontinuation of City Bucks at several locations “very upsetting,” said she uses her City Bucks at CTB because “the bursar goes to a different account than my parents’ credit card.”

She said she would probably buy her morning coffee at Starbucks now, adding that City Bucks were particularly convenient for her “because I lose things very easily and losing my ID card is not as big a deal as [losing] a credit card.”

Without City Bucks available, “I’ll definitely stop going to Collegetown Bagels as much,” Thomas Gabay ’12 said.

Gabay said he would now “go to CTP instead [over CTB] as long as they still accept City Bucks.”

Still, some were hopeful City Bucks could continue to help bring student business to local stores. Maxie’s Supper Club General Manager Todd Parlato said Maxie’s was continuing to use the program because the added costs “weren’t that dramatic” and because “we were told [by Cornell] there would be an increase in marketing on campus.”

Plum Tree’s owner Hiro Oshima said his restaurant would continue to offer City Bucks, which he said many students still use. He added that he negotiated his contract with Cornell Dining to lower the percent transaction fee to four percent.

Contrary to Brous and Schuepbach or Oshima and Parlato, most expressed uncertainty as to whether or not to continue the City Bucks program.

Collegetown Pizza owner Kelly Attia said that although CTP is slated to continue City Bucks until the end of the semester, the business is “just giving [the new program] a try.”

Mama Teresa Pizza owner Merendino Enzo said City Bucks sales have “gone down year by year,” but was hesitant to immediately cut ties with the program.

Still, he was upset with the price hikes, calling them “wrong” and “unfair.”

Many store owners –– particularly those whose stores are located in Collegetown –– seemed to be waiting to see whether other stores would eliminate City Bucks before doing so themselves.

“If only three businesses have [City Bucks], it’s not worth having,” Enzo said. “I want to have everybody get together to make a decision.”

Original Author: Jeff Stein