One thing dampening my holiday spirit is inflation. The Wall Street Journal said that the U.S. inflation rate reached an all-time high in October 2021, as consumer prices jumped 6.2 percent, and the core index was up 4.6 percent with demand remaining sky high and supply chain shortages continuing.
Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell testified about this rise in inflation during a House Financial Services Committee meeting just the other day. Yellen defended the Biden administration's actions. She said, "Inflation is a matter of demand and supply, and it’s certainly true that the American Rescue Plan put money into people’s pockets, but if you look at the amount of inflation that we have and its causes, that is at most a small contributor.” It's no surprise that Democrats and Republicans at the meeting disagreed over the causes.
I think another cause is just plain old greed. I came across a study by Digital.com that indicates 56 percent of retail businesses have increased prices beyond inflation to boost profitability. A big number raised prices by 20 percent or more. What's up with that? Researchers wrote that among businesses that have increased prices, 55 percent shrank discounts, and 48 percent increased the price of complementary products. Other tactics they're using include increasing surcharges and various types of bundling of products and services. What do you folks make of all of this?
Mark Appleton, Customer Service Rep
Mark,
Thank you for reaching out to us. We found the report you referenced at https://digital.com/half-of-retail-businesses-using-inflation-to-price-gouge/. And it is illuminating. Since we, at The Green Sheet, are not economists, we cannot offer truly informed advice on this topic. However, the impact of inflation on the payments industry is a compelling topic that we will consider for possible follow up.
Has inflation impacted your merchants or your own business this year? If so, how? And are you taking steps to lessen its effects on your bottom line? Please share your thoughts on this or other relevant topics via email to greensheet@greensheet.com..
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