The other hardware store in town accepted credit cards in lieu of offering store credit. They paid an 11% service charge on all credit sales, but credit card receipts were credited to the company’s bank account on the day of sale. Because the store did not offer other credit, they had no bad debt. When Mark discussed this alternative to Ellen, she mentioned that she felt that a switch to credit cards would reduce sales by 10% as some of Mitchell’s current customers would periodically shop at the other store. Based on industry averages, she believed that 60% of all sales would be charged to credit cards. She also recognized that accepting credit cards would reduce costs associated with billing and collection and save the company $8,000 per year. Conversations with the credit card provider indicated that charges are determined by a grid based on total number of transactions and sales per transactions. Based on their initial estimates, the company indicated a 11% service charge would be applied.