Getting Merchants to KEEP Their Bitcoin

[Bitcoi2n2n]

There is no plausible reason for big merchants to keep Bitcoins yet...
They won't be able to buy the products they need for the company by Bitcoin. They literally can't do anything with it but exchange them to fiat.

[Johnny Bitcoinseed]

Don't forget, what you pay a merchant is not anywhere near pure profit for them:  They have to pay for new inventory to replace that which you purchased and a ton of overhead including taxes, rent, utilities, bookeepers and accountants, employees, and a slew of other expenses.  At the end of it all they often only get 2 or 3% profit - and may even be losing money in this economy.

What this means is that they usually cannot hold onto bitcoins since they simply have got to pay the bills here and now.

Of course, some small mom and pop merchants may be able to hold some bitcoins they get as payment, but only because they have enough money coming in or alternative sources of income to get them through the every day expenses.

[casascius]

They'll keep bitcoin when they have a business reason to do so.

If things keep growing, that business case will present itself.

+1000

Trying to "get" merchants to keep their bitcoin is a waste of our efforts and a self-destructive cause with respect to the perceived objectives of our community.  Merchants will do this if and when it makes sense to, if they haven't already, and meanwhile they will not feel obligated to update the public on their choice to keep BTC.

For merchants, not keeping BTC is one way they limit their exposure to whatever uncertainty is in Bitcoin's future.  It also keeps their accounting from developing soft spots where parts of the books are maintained based on best guess as to proper accounting principles for Bitcoin, rather than generally accepted accounting principles established for fiat currency.  In a nutshell, it's their prerogative to not keep BTC and their privilege to not be harassed by us in the form of petitions from us to change.  Believe me, they see the potential, that's why they made the choice to get involved in accepting bitcoin today.  Thank them, do business with them, but as for their choices as to what do do with their bitcoin, respect their freedom and let 'em be please!

[johnyj]

For example, I'm running a business and I accept bitcoin payment, but I never cash out the earned coins on exchanges

First I try to look at the places that I can purchase things with those coins, and since the places are limited right now, I sell some of the coins through localbitcoins.com. By doing this I will not put any coins for sell on public exchanges, and the demand on localbitcoins.com are mostly driven by curious new buyers and long term investors, no speculators due to illiquid coin supply there

[Cryptopher]

So now we have more merchants, like Overstock, accepting Bitcoin.

However, most of them use either Coinbase or Bitpay to immediately convert their Bitcoin stash to fiat.

For Bitcoin to grow, I would think that instead of just being a convenient means of transfer, it needs to become accepted as a legitimate store of value. How can we achieve that if merchants immediately trade it for fiat? Is there a way we can incentivize merchants to keep some of their reserves in Bitcoin? Right now I am sure Patrick Byrne, the ceo of Overstock, owns some bitcoin. However, Overstock doesn't. How do we develop more bitcoin--->bitcoin trade, instead of fiat--->bitcoin-->fiat?

If their suppliers would accept Bitcoin, or other areas of the business i.e. logistics, then I imagine that retailers will hold onto Bitcoins, and use them to pay for products and services.

[cdog]

Companies are just starting to experiment with Bitcoin. Once they see it works, and Bitcoins have longterm value, they may decide to keep some of their profits in Bitcoin.

Thats their decision to make, and nothing we can say will influence this and I certainly dont think this topic needs much discussion.

Want Bitcoin to get more popular? Start spending it, and give some to family and friends.

[Duane Vick]

I proposed a solution to this problem whereby a company offers a guaranteed redemption price for any bitcoin held by the merchant in exchange for a policy premium upfront that protected a specified number of bitcoins. It was promptly shot down by people who think bitpay is all that is needed for the retail market.

https://bitcointalk.org/index.php?topic=388620.msg4182294#msg4182294

This proposal would allow merchants to hold bitcoin without risk of loss.

[Enkel]

Since this thread is about merchants... I have a semi-related question.

Say, that I buy a product and pay 1BTC for it on Monday and on Monday, 1 BTC = $800 exchange rate.

Two weeks go by and my product is finally delivered and it is just not what I thought it was. So, I get a Return Authorization from the retailer and ship the product back w/registration so they sign for it when they get it. On the day they sign for it, the value of 1 BTC is now up to $1000.

What SHOULD the retailer return to me?  Do I get my 1 BTC back or do I get the equiv of $800 in BTC (so, .8 BTC ) back?


This is Overstock.com's policy (basically other than cancelled orders, no refund except store credit):

Cancelled Orders: Cancelled orders may qualify for a refund in Bitcoin. The refund will be issued for the full USD value of the order and processed at the Bitcoin exchange rate at the time the refund is completed. If you choose to have a refund sent to an email address that is not set up on a Coinbase account, Coinbase will create an account under that email address once the refund is sent. An email confirmation will be sent by Coinbase to set up your account and retrieve the funds. If you fail to retrieve your funds within 90 days, the funds will be returned to Overstock.com. When the refund is sent to an email address set up on an existing Coinbase account, the funds will be available to you and there is no risk of retrieval. Refunds sent directly to a Bitcoin address are also not at risk of retrieval.

Returns: Returns on orders paid by Bitcoin will be accepted for a refund as In-Store Credit to your Overstock.com account. Damaged or defective merchandise may also be returned for a replacement of the exact item. Replacement orders will ship once the return of the original item is received and processed at the Overstock.com warehouse.

I personally, this the store credit only thing is a total BS move. And, they don't say how they will value the store credit. Will it be a 1 BTC value or will it be a USD value and at what conversion rate? There is no reason that the Return Authorization process can't collect an address to be used to return the BTC.

[Duane Vick]

Since this thread is about merchants... I have a semi-related question.

Say, that I buy a product and pay 1BTC for it on Monday and on Monday, 1 BTC = $800 exchange rate.

Two weeks go by and my product is finally delivered and it is just not what I thought it was. So, I get a Return Authorization from the retailer and ship the product back w/registration so they sign for it when they get it. On the day they sign for it, the value of 1 BTC is now up to $1000.

What SHOULD the retailer return to me?  Do I get my 1 BTC back or do I get the equiv of $800 in BTC (so, .8 BTC ) back?


This is Overstock.com's policy (basically other than cancelled orders, no refund except store credit):

Cancelled Orders: Cancelled orders may qualify for a refund in Bitcoin. The refund will be issued for the full USD value of the order and processed at the Bitcoin exchange rate at the time the refund is completed. If you choose to have a refund sent to an email address that is not set up on a Coinbase account, Coinbase will create an account under that email address once the refund is sent. An email confirmation will be sent by Coinbase to set up your account and retrieve the funds. If you fail to retrieve your funds within 90 days, the funds will be returned to Overstock.com. When the refund is sent to an email address set up on an existing Coinbase account, the funds will be available to you and there is no risk of retrieval. Refunds sent directly to a Bitcoin address are also not at risk of retrieval.

Returns: Returns on orders paid by Bitcoin will be accepted for a refund as In-Store Credit to your Overstock.com account. Damaged or defective merchandise may also be returned for a replacement of the exact item. Replacement orders will ship once the return of the original item is received and processed at the Overstock.com warehouse.

I personally, this the store credit only thing is a total BS move. And, they don't say how they will value the store credit. Will it be a 1 BTC value or will it be a USD value and at what conversion rate? There is no reason that the Return Authorization process can't collect an address to be used to return the BTC.

Overstock doesn't take possession of the bitcoins at the time of sale, they are immediately converted to usd. You have to accept that overstock transacts in usd currency so that usd or the equivalent amount of usd in in-store credit will be issued.

[cryptoanarchist]

This will happen organically as firms that keep a higher percentage of bitcoin become more profitable, those that convert 100% to fiat will lose ground.

Bitcoin is like the internet -  you adapt or die.