Yesterday, while waiting in line to pay here at Target here in downtown Montreal, I heard the lady at the cash telling someone that they do not accept American Express cards. It wasn’t the first time I heard that – and I’m sure that’s the same for many others here in North America. It seems that American Express is not welcome at many locations, offline and online. So why is that?

Well, there a few reasons for this:

  1. American Express’ discount rates are very high: Their fees are significantly higher than those of Visa and MasterCard. In fact, they take about 3% to 4% of the whole transaction, compare that to the other major credit card companies, which take anything between 1.9% an 2.9% (note that the discount rate of any credit card company is inversely proportional to the volume of the sales). Retailers, especially large ones which have very small profit margins, cannot afford to pay that much money to process their transactions. In fact, here in Montreal, the only places that would accept American Express are fancy restaurants and art galleries, because they both have a huge profit margin, and they don’t care about paying that extra 1% to the payment processor to get more sales. By the way, and in case you’re wondering, the reason why Amex’s discount rate is very high compared to its peers in the industry is because of all the rewards and perks that Amex customers enjoy.

  2. They take ages to payout merchants: Well, not really ages, but a transaction processed through Amex can take up to a week to be credited to the merchant’s account – compare that to the 1 business day it takes for a transaction to be credited if processed through Visa or MasterCard.

  3. They’re not the greatest when it comes to chargebacks: If a customer reverses a charge (chargebacks) through Amex, then they will instantly reverse the transaction by debiting the money from the merchant’s account (though they won’t immediately credit back the customer). Reversing a chargeback is a nightmare (even if the customer consents that he chargebacked when he shouldn’t) and can take up to 6 months.

The above are the main reasons why American Express is not accepted in many places. What’s odd is that American Express seem that they couldn’t care less about it, probably because they think of themselves as an exclusive club. In my opinion, they’re not even remotely exclusive; I remember that it took them 4 years to understand that I was not even slightly interested in their services (they kept sending me those “you’re pre-approved” mails).

Now, for all of us doubting American Express’ strategy, let’s take a look at their stock: American Express (NYSE:AXP) dropped 2.87% so far this year. For that same period, Visa (NYSE:V) dropped 3.45%, and MasterCard (NYSE:MA) dropped a disastrous 8.55%. Who’s laughing now?

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on fadi.el-eter.com.

There was an article on LinkedIn that was published last Friday that praised Indro Nooyi’s guidance of PepsiCo and claimed that Indra is considered to be the best hire in the last 100 years.

Now I have searched and searched for a single reference that confirmed the 100 year thing – but I found nothing. Even if such a reference existed, I don’t understand who ranks people as best hires in the last 100 years (100 years? really?) or best CEOs or best whatever. The financial performance of any public company can be easily verified. Mrs. Indra became CEO of Pepsico on October 1st, 2006. From October 1st, 2006 until Friday’s afternoon, Pepsico’s stock (NYSE:PEP) increased by 35.01%. Coca Cola’s stock (NYSE:KO), on the other hand, increased by 75.87%. Conversely, from January 2nd, 1998 to September 29, 2006 (8 years prior to Mrs. Indra becoming Pepsico’s CEO), Pepsico’s stock has increased by a staggering 87.80%, while Coca Cola’s stock has decreased by 30.59% (Source: Google Finance)

Clearly, Pepsico was much better off without Mrs. Indra at the helm.

Please, LinkedIn authors stop with the propaganda and the blatant advertising for your favorite CEO. We can all do our research to verify your (usually false) claims.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on fadi.el-eter.com.

I love Target. I do a lot of shopping there and I’m really happy that they opened, late last year, a decent branch in downtown Montreal. I have to admit that I love Target more than FutureShop. But why?

Well, the first thing that is great about Target is the customer service. FutureShop employees will not even go near you if they think they won’t make a commission out of you, that’s not the same about Target. They’re really, really good, and they don’t pressure you to buy anything. They’re happy that you’re there but they just don’t force you to buy.

Additionally, you can always find a Target employee to help you, and if you can’t find one, then there’s some sort of buzzer that you can press and within a maximum of 2 minutes, someone will be there to help you. Compare that to Canadian Tire (a retailer that I really don’t like – by the way, probably the only 2 things that Canadian Tire has that are actually made in Canada are seeds and rubber boots) where you have to wait nearly 15 minutes for someone to help you.

The last thing that I want to mention about their customer support is that they’re very knowledgeable and very friendly. It’s unbelievable, it’s like being in Canada in the 1950′s. Seriously. You get the feeling that they love their jobs, that they have a cause to make Target better, unlike other retailers where you feel that the only reason the employees are working for them is because they can’t find better jobs.

Price matching is also a breeze with Target, you just have to tell them that the item is selling less for another major retailer and they’ll check it themselves. They won’t ask you for a printout, they’ll check it themselves. Some retailers are really mean about price matching but not Target. Target’s price matching is so good that the retailer is constantly abused by many of its customers: these customers bring brochures from a remote province and price-match it with Target. A hypothetical example (that can be true in real life) is a customer living in Cape Spear, claiming that he found the toothbrush of his dreams selling for $2.99 at a small retailer in Vancouver. Of course, the customer is deliberately oblivious that it’ll probably cost another $2.99 to ship that toothbrush from Vancouver to his home on Cape Spear. Target, until very recently, had no problem price-matching that toothbrush, but they have introduced a new policy in past few days that will restrict price matching to local major retailers, which means that the Vancouver to Cape Spear trick will no longer work anymore.

Cheap prices is another reason why I love Target. They have rotating offers on many hot-selling items (some of them are technology items) and they do offer rain checks if you can’t find the item. By the way, what I find very interesting and courteous from Target is that when they run out of a certain item, they place rain checks over the price tag of that item. How cool is that?

Now, if you live in Canada, you probably know by now that it’s really hard to find a retailer with a clean floor, especially during winter. That’s not the case with Target, the floor is so clean that you can literally see yourself in it, and the whole place smells very good, despite the fact that they have a food section.

The last thing I love about Target is the variety – they really have everything, and what they have is usually of better quality than many other retailers.

I hope that Target keeps growing here in Canada, maybe other retailers will notice that and start working on themselves. By the way, Target (NYSE:TGT) is down around 14.5% so far this year. I’m sure though that Target would be an excellent investment over the long term. You can beat good prices, but you can’t beat excellent customer service, and that’s what’s Target is all about.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on fadi.el-eter.com.

Before starting this post I want to stress the point that neither I’m against motherhood nor I’m against reasonable subsidy for mothers and a reasonable time off when becoming a mother. I’m against using and abusing the system.

Maternity leave is becoming more and more of an issue. Here in Canada maternity leave is a year for the mother, and about 6 weeks (or maybe 8 weeks) for the father.

Here’s what’s happening: Would be mothers get hired in a company. 6 months down the road they take their maternity leave (you have to work at least for 6 months to be allowed for the maternity leave), so they leave for a year, then the come back and they stay for another 6 months, and then they take another maternity leave for a full year. Repeat until they no longer want kids (the magic number here is usually 3).

We had several of these cases in one of the companies I worked with, and I know of many other similar cases in other companies. The problem is that companies are forced, by Federal and Provincial law, to reserve a seat for these mothers once they come back to work, same job description, same pay, same everything. They also have to fire anyone who was doing their work during this year because they cannot afford to have 2 people doing the same job once the mother is back. In many of these “firing” scenarios, the people fired produced much better work. It was really tragic.

Another thing to mention is once a woman becomes pregnant, there is no way on Earth you can fire her, she will immediately go to the “Norme du Travail” (or its equivalent outside Quebec) and sue you for at least $100k (claiming she was fired because she was pregnant, while she was really fired because of her bad performance), even though she probably only worked for 3 months for a yearly salary of $40k. Not only that, once she becomes pregnant, her productivity is diminished to about 20% of its original productivity (that’s 80% loss of productivity), and every other day she has a doctor visit, and every other day she’s too tired to come to work, so she’ll work from home, which means that she won’t do any work at all.

This whole thing is ridicilous it’s not even funny anymore and is becoming a deterrent for companies to hire women for fear that they become pregnant and take that one year off. You see, a company is a business, and a business is about productivity, about getting things done, about making money; a business is not about providing a safety net for a full year for someone who may or may not be interested in the job once the year has elapsed, a business is not about jumping through hoops to find a temporary replacement who will be fired when the year has elapsed. A business has the right to hire and fire anyone without getting sued for “discrimination” – if you’re not adding to the end result of the company, then you probably shouldn’t be working for that company anymore.

So what’s the solution?

The only solution I can think of is to reduce the maternity leave to 12 weeks instead of a full year (same as the United States) and require that would-be-mothers be working for the company for a full year before being eligible for the maternity leave. Yes, I know that there are social implications, but if you want to remain in the workforce, then there’s a price to pay, and your employer and the Canadian government shouldn’t be the only ones paying that price.

I end this post with a question to those would-be-mothers out there who may be using and/or abusing the system: “Your company thrives on the commitment of its employees. Do you think leaving them for a year, staying for 6 months, and then coming back for another year demonstrates genuine commitment?”

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on fadi.el-eter.com.

Webspammers are creative people. They really are. They work really hard to circumvent Google’s algorithm changes aiming to block them, sometimes they don’t succeed, sometimes they do. But on the long term Google will take notice of their change in strategies and will change its search algorithms accordingly.

Apparently, webspammers have realized that their attempts to spam the search results are futile (on the long run), and they have decided to spam Google’s shopping results. As of today, this is still an issue and Google has not yet addressed it.

So, what are they doing?

Well, as mentioned above, they are spamming the shopping results. Apparently, they are submitting (through Google Base) a list of products that they don’t have at a very low price, just to lure visitors into visiting their sites and clicking on their ads. This happened to me yesterday. I was looking for a laptop called Vaio PRO 13 (which is a Sony Laptop, now discontinued), I searched on Google Shopping, and I found one that was very cheap, and apparently it was new. I clicked on the link and the moment I did that I realized what was going on. It was a half-baked WordPress website listing many laptops for very cheap. So, and just for fun, I added the product to my shopping cart and I proceeded to checkout, and, surprise surprise, the webspammer they claimed that they were having problems with their checkout process, and that I should try later. Of course, all the pages were filled with ads. So, the point of this whole thing is to get someone to click on an ad, and not to make him buy something.

I hope Google takes notice of this practice soon – because it’s very annoying and it’s affecting the integrity of their shopping results.

Google, by the way, is having an OK year so far. Its stock has increased 6% from January 1st, not much by the industry standards, but better nothing.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on fadi.el-eter.com.

Canadian banks are finding that Twitter is a powerful platform to gain more clients by going casual with their existing/potential clients and pretending that they are the nicest people on earth… Anyhow, I found it interesting to know how many Twitter followers each of the Canadian Big 5 Banks has, and here are the results:

  1. CIBC: 57.7 K followers.
  2. TD Canada Trust: 49.2 K followers.
  3. ScotiaBank: 43.9 K followers.
  4. RBC: 27.8 K followers.
  5. BMO: 19.5 K followers.

There you have it – CIBC has the strongest presence on Twitter (they also offer 24/7 support through Twitter – or at least they claim they do). CIBC, by the way, is the smallest Big 5 bank, with total assets just above $350 billion. RBC, which ranks at #4, is the strongest bank and has $825 billion in assets.

Oh, and by the way, all the tweets of the Big 5 banks are in English. I couldn’t find a single tweet in French. I wonder how long will it take the Federal government to enact an English/French law for tweeting.

If you’re in Quebec, then you might be interested in knowing that Quebec’s DesJardins Group has 2,530 followers on its English Twitter account and 10.4 K followers on its French account. Quebec’s Desjardins is the 6th largest financial institution in Canada, with total assets of around $190 billion.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on fadi.el-eter.com.

My main job is IT consultancy (I do stock trading for fun) and, for a year now, I haven’t used, on any of my machines, any Microsoft product besides Windows (and its built-in applications). Let me explain…

The last 2 Microsoft products that I used were Outlook Express (which I was, for mysterious reasons, emotionally attached to) and Microsoft Office (which I used to hate, but had to use because of my job). I used Outlook Express on my reporting machine and I used Microsoft Office on both my reporting and my development machine.

When I replaced my reporting and development machines a year ago, I was faced with a big dilemma. Which email client should I use to replace Outlook Express (Outlook Express was defunct years ago)? Mozilla Thunderbird seemed like an excellent solution, but I wanted a client that organizes my emails the same way that Outlook Express did (e.g. all email accounts go to the same folder). After some research, I discovered that Thunderbird can do all what I want with the use of plugins and some modifications to its settings. I installed it, I modified it, and I used it and it made me really happy! Now I’m able to quickly find old emails (I mean really quickly) – it used to take me about 20 minutes to find an email because the search engine in Outlook Express sucked. Email client problem solved!

As for Microsoft Office, since I really hated it and I thought it was a complete ripoff, I actively searched for a free replacement and I found it easily. It was Apache’s OpenOffice, which was a product that I have used many years ago but did not quite impress me. However, OpenOffice nowadays is a polished product, and you really can do whatever you want with it. You can even open Microsoft Office documents or save documents as MS Office documents. Office productivity software problem solved!

Now, what’s the point of this post? Is it to let others know that I use free software on my machines? Well, maybe, but there’s another point to it. It means that Microsoft’s revenue is shrinking as more and more people are aware that they can be (with the exception of Windows) Microsoft free.

Microsoft knows that, and that’s why they have moved to a subscription based model on their products in order to make up for the lost revenue. I’m not sure how this business model is working for them and I’m not sure whether this is a good strategy on the long term, considering that non-Microsoft products are now extremely reliable.

I think Microsoft’s last bastion is Windows – if they lose it then they lose everything. Google is trying to push them off the cliff with their Chrome OS – but that won’t happen anytime soon because Google’s alternative is online only, and the world isn’t ready yet, nevertheless, Google is bound to eat some of Microsoft’s market share. Apple is already doing that. Microsoft, with their current strategy, cannot survive on the long run, because Windows is ridiculously priced at the moment. Microsoft is still acting as if they’re the only ones with a good OS, which is not the case anymore. They just can’t charge $100 for an OS anymore for the end users (they can charge much more to corporations, however, and they can still get away with it), which means that they will need to revise their pricing strategy. I’m sure that at one point, Microsoft will move to a subscription based model on Windows, which is very logical, since Windows undergoes many updates a year, and people should not expect to get those updates for free for the lifetime of the product.

On the bright side, Microsoft (NASDAQ:MSFT) is doing well on the stock market. It’s up 22.75% in the past 12 months, which is quite impressive. It’ll be more impressive if Microsoft can sustain that growth in the next few years, but hey, there are many tech companies trading at a forward P/E of over 100, which means that at a P/E of 15, Microsoft is modestly valued.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on fadi.el-eter.com.

Most of us Canadians deal with the United States and get paid with US Dollars. Many Canadians receive payments to their PayPal account in USD, and are forced, when transferring the money from PayPal to their bank account, to exchange the money first to Canadian Dollars through PayPal (PayPal does not officially support USD accounts in Canada, but some people claim that they were able to accept US funds into their RBC USD accounts). The problem with this is that us Canadians who have many expenses in USD, are forced to exchange the money back to USD. But that’s another issue…

Now, the question is, does PayPal exchange the money for the same exchange rate that you see on Google finance? Unfortunately, no, they add 150 to 200 points (1.5 to 2 cents) to the current exchange rate you see on Google.

So, when do they add 150 points and when do they add 200 points?

Well, they add 150 points between 10:00 AM EST and 4:00 PM EST on business days. If you try to transfer money in the after hours or during weekends or holidays (US or Canadian holidays), then you are hit with 200 points (2 cents) above the base exchange rate. For example, if you have a $1,000 US in your account, and you want to transfer it to your Canadian account, and if the USD/CAD rate is at 1.07, then expect to see CAD $1,055 in your account if you do it during working hours, and CAD $1,050 in your account if you do the transfer during off hours, weekends, or holidays. So, if you’re frugal, make sure that you push money from PayPal to your bank account during business hours (in the US and Canada).

I hope my little post has saved someone, somewhere some money!

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on fadi.el-eter.com.

Mobile carriers hate Whatsapp, they also hate Viber, Skype, and Tango. They hate them because the former stripped them out of their SMS revenue (SMS revenue has fallen for the first time for 4% in 2013), and they hate them because the latter stripped them from mostly international minutes revenue. One of the main reasons, for example, why Canada ranks almost in the bottom 10 countries right now when it comes to the generosity of its mobile data plans is that hate.

Now, mobile carriers can challenge the current status quo, where any score for App Developers is a loss to them. They can make this whole hate-hate relationship into a win-win relationship. Here’s how: they can get as payment gateways.

In many developing countries, mobile carriers act as a payment gateway and it’s working very well for them. Unfortunately, mobile carriers in developed countries took a passive aggressive attitude towards apps in general and thus lost that payment gateway status to Google/Apple. That is a wrong strategy and it’s causing lost revenue. Mobile carriers still have leverage and they can negotiate great deals with App Developers and they can both make a lot of money. Not all the app money has to go to Google or Apple, mobile carriers can make money out of mobile apps too.

If mobile carriers drop that negative perception that app developers are eating out of their revenue, and start working with them, then there’ll be more money for everyone. Will it ever happen? I’m sure it will.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on fadi.el-eter.com.

July 4, 2014 | In: Opinion

On Giving Discounts

I do some serious online shopping every month. One thing that I have learned is not to buy anything that is not on discount, unless I really need it, and unless I really need it now.

So, I see something, and I wait for it to go on discount, and once it does, I wait for it to go on discount the second time (maybe the second time it’ll be cheaper), and, if it’s cheaper on the second time, then maybe I wait for a third round of discounts, or I would just buy it. If it’s not cheaper on the second discount, then I will wait for a discount similar to the first discount, then I will buy it.

I’m sure that there are many people who are like me, the thing is, when you see an item on discount, you automatically think that its real price is the discounted price, and not the original ticker price. The more discounts an item receives, the less value that item will have from the customer’s perspective.

Of course, there are discounts and discounts. For example, car manufacturers make some discounts around September on the current year’s models to get rid of their old inventory and make place for the new inventory. I’m not talking about that. I’m talking about selling some furniture with a ticker price of $2,000 at $1,000, because of a discount. I’m talking about selling hotel stays at 70% off.

I’m not personally annoyed by discounts, in fact, I love them and I use them to my advantage. But I think marketing has to come up with a better alternative to discounts, since most people no longer buy anything at full price, and those who do, are one of the following: 1) They are suckers, 2) They’re not paying for the items they’re purchasing (most likely their company is paying), 3) They need the items they are buying at full price immediately.

If we know that everything will be on discount at some point of time, then there is no point of having a discount at all.

This article (as well as all other articles on this website) is an intellectual property and copyright of Fadi El-Eter and can only appear on fadi.el-eter.com.

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