There are some reports on Reddit that people who have applied for the Payboo card have been denied based on an alleged frozen credit report when Comenity Bank makes a credit check. According to one post (take with a grain of salt as it's a few years old), LexisNexis reports credit history to Comenity Bank. So your credit may be frozen with LexisNexis but not with any other credit reporting agencies. But you stated that you unfroze it, so I don't know what's going on there.
This is definitely not a B&H issue but I can see why you would be frustrated.
First, it would be aggravating to have unlocked your credit report and then be told that credit could not be extended because your report was locked, and doubly so if you could see that Payboo (and Comenity) had actually checked the report. I hope that Henryp gets that sorted out for you.
I cannot see any way in which this would be to Comenity’s advantage. After all, if your credit is good, they WANT/NEED people like you to use their card. (The only thing I can imagine — with no evidence at all — is that they actually don’t want people with good credit who pay off their balances every month. That doesn’t quite seem right either, since I got the Payboo card with no problem and we always pay off our balances.)
Some of the rest of the discussion seems to have gone pretty far afield here!
For one, it is my understanding that when you use Payboo tax is still collected on the sale, though the pre-tax sale total is lowered so that when tax is added the total bill is equal to the items cost without tax. I believe that companies doing as much business as B&H are mandated to collect sales/use taxes now.
As to the ethics of credit cards, either that of people using them or of companies supplying and promoting them, that’s a real can of worms. There’s a very good argument that Americans (and people in other countries?) have too much credit card debt, and letting yourself end up paying the usurious rates on credit cards is almost always a very dangerous thing — a trap that is really hard to get out of. There’s also an argument that becoming an economy in which almost all transactions have a slice peeled off the top to pay these companies is not a great thing.
(And those “free miles” for using your card — something I benefit from, too — aren’t really free at all. We are all paying for them since the costs of using the credit cards raise the costs of the goods we buy. If, like me, you even do something as basic as use a Square account to process charges for products you sell, you know what percentage you “lose” from every sale — and you have no choice but to factor that into your pricing.
My purchases at B&H with the Payboo card show the full product price, with sales tax on the full product price, and then a discount equal to the sales tax amount.
California and San Diego County get paid the full sales tax amount.
I get a discount.
B&H has managed to discount their products without violating their agreement with the product supplier..
The credit terms are predatory, so you need to be careful the pay the balance every month.
dclark wrote:
My purchases at B&H with the Payboo card show the full product price, with sales tax on the full product price, and then a discount equal to the sales tax amount.
California and San Diego County get paid the full sales tax amount.
I get a discount.
B&H has managed to discount their products without violating their agreement with the product supplier..
The credit terms are predatory, so you need to be careful the pay the balance every month.
That’s how I understand it, too. It isn’t that there is “no sales tax.” It is that the actual sale price ends up discounted to the point that the total with tax added is equal to the listed price of the item. The price of a $100 item is reduced to the point that the discounted price plus tax equals $100, for example.
And you are certainly right about the “predatory” credit terms. If one is foolish enough to not pay off the full balance every month, the interest rate is well over 20%!
Payboo is a fine way to reduce costs a bit without bargaining, but a horrible way to finance purchases that you can’t pay for right away.
gdanmitchell wrote:
That’s how I understand it, too. It isn’t that there is “no sales tax.” It is that the actual sale price ends up discounted to the point that the total with tax added is equal to the listed price of the item. The price of a $100 item is reduced to the point that the discounted price plus tax equals $100, for example.
And you are certainly right about the “predatory” credit terms. If one is foolish enough to not pay off the full balance every month, the interest rate is well over 20%!
Payboo is a fine way to reduce costs a bit without bargaining, but a horrible way to finance purchases that you can’t pay for right away....Show more →
I believe you are a bit off. If I buy a $1000 item, the sales tax is 7.75% which is $77.50, the total is $1077.50. I get a $77.50 discount from Payboo, and California and San Diego get $77.50. I pay Payboo $1000.00 to clear a sale of $1077.50.
It is not that the price of the item is discounted to $928.07, plus tax of $71.93, so the total sale is $1000.00. That would violate the agreement B&H has with the product owner to not discount the price, and it would lower the revenue to the state and county. B&H would be discounting the price, rather than Payboo giving me a discount on how much I have to pay.
dclark wrote:
I believe you are a bit off. If I buy a $1000 item, the sales tax is 7.75% which is $77.50, the total is $1077.50. I get a $77.50 discount from Payboo, and California and San Diego get $77.50. I pay Payboo $1000.00 to clear a sale of $1077.50.
It is not that the price of the item is discounted to $928.07, plus tax of $71.93, so the total sale is $1000.00. That would violate the agreement B&H has with the product owner to not discount the price, and it would lower the revenue to the state and county. B&H would be discounting the price, rather than Payboo giving me a discount on how much I have to pay. ...Show more →
I just checked a recent B&H transaction of mine, and it looks like you are correct, though I still can’t quite make sense out of the accounting going on. At some point, B&H/Payboo are discounting the price of the item, at least for accounting purposes, since the state/jurisdiction of the buyer still gets the tax on the full purchase amount, at least according to the receipt.
Using your example, what we see is:
$1000 item
$77.50 tax
$1077.50 total
-$77.50 “Payboo card savings”
$1000 “you paid”
Clearly there is a discount going on, and it is equal to the tax on the full, original purchase price of the item(s). My hunch is that somehow B&H is able to circumvent the rules about discounts from list price by saying that Payboo somehow does the discount, not B&H. How that discount gets funded is a fascinating question…
gdanmitchell wrote:
I just checked a recent B&H transaction of mine, and it looks like you are correct, though I still can’t quite make sense out of the accounting going on. At some point, B&H/Payboo are discounting the price of the item, at least for accounting purposes, since the state/jurisdiction of the buyer still gets the tax on the full purchase amount, at least according to the receipt.
Using your example, what we see is:
$1000 item
$77.50 tax
$1077.50 total
-$77.50 “Payboo card savings”
$1000 “you paid”
Clearly there is a discount going on, and it is equal to the tax on the full, original purchase price of the item(s). My hunch is that somehow B&H is able to circumvent the rules about discounts from list price by saying that Payboo someone does the discount, not B&H. How that discount gets funded is a fascinating question…
There are lots of CC that will give you "X% off" on all purchases, regardless of where the purchase is made. In that case the Bank is sharing their fees with the purchaser.
I assume this agreement between a specific vendor, B&H, and Comenity Bank is a special agreement involving fees to B&H which lower B&H's profits in the same way that lowering their prices would lower their profits.
dclark wrote:
There are lots of CC that will give you "X% off" on all purchases, regardless of where the purchase is made. In that case the Bank is sharing their fees with the purchaser.
I assume this agreement between a specific vendor, B&H, and Comenity Bank is a special agreement involving fees to B&H which lower B&H's profits in the same way that lowering their prices would lower their profits.
I’m not sure it could work quite that way. The bank fees (or credit card transaction fees) are not that great. Even individuals using something like Square are only paying 2-3% generally, and I’m pretty sure that larger businesses like B&H are paying even lower fees on credit card transactions. In other words, not nearly enough to cover the sales tax, which is going to be several times the transaction fee.
