Unexpected letter from Tesco... closing my DD account

puk999

joe134 wrote: »

I think setting a £1 dd with a charity is the cheek, not very ethical, it costs more to administer it..

Why would the charity be dumb enough to allow a £1 direct debit if it costs them money? Never mind ethics of the donor, what about the stupidity of the charity? Isn't the charity acting unethically allowing such small DDs? How can the donor be acting unethically if they are unaware of the cost of administration of their DD?

Can you provide evidence of the claim that it costs the charity more than £1 to administer the DD?

Jsscmm

puk999 wrote: »

Can you provide evidence of the claim that it costs the charity more than £1 to administer the DD?

Whilst not formal evidence, the numbers here aren't exactly zero.

https://gocardless.com/direct-debit/access/

Obviously they are trying to sell a service and show themselves to be "low cost" but there is definitely a reasonable cost to a dd.

Dizzee_Rebel

EarthBoy wrote: »

Where did you get your list from?

Post # 2 & post # 11

zerog

Jsscmm wrote: »

Whilst not formal evidence, the numbers here aren't exactly zero.

https://gocardless.com/direct-debit/access/

Obviously they are trying to sell a service and show themselves to be "low cost" but there is definitely a reasonable cost to a dd.

Looks like it's 1%, and we only need to consider the marginal costs of "abusers", 1p per month per DD isn't much, and would be preferable to £1 per month per DD for someone transferring £100 in and out just to keep off the radar.. of course no DD at all would be even cheaper

joe134

I've had an TIS for a while now, to use as a DD for another A/c.£1,
Doing a switch, (first one ever) from Nationwide Flexi to Halifax reward, £200 switch offer.I set up another IAS a/c yesterday for 2nd DD.and I increased both IS and IAS from, £1 to £10, OH has 2 also, increased hers a few weeks ago.and deposited more money.I've always kept a balance in them, at 1.5%(TIS) they are among the best instant savings a/cs, but, they've dropped lately. 1.35%? I will have to set up new TIS's,soon,as ,the bonus's are due to expire.

joe134

puk999 wrote: »

Why would the charity be dumb enough to allow a £1 direct debit if it costs them money? Never mind ethics of the donor, what about the stupidity of the charity? Isn't the charity acting unethically allowing such small DDs? How can the donor be acting unethically if they are unaware of the cost of administration of their DD?

Can you provide evidence of the claim that it costs the charity more than £1 to administer the DD?

I have a couple of DD's to charity, and they are for more than £1, but, after being hounded for more lately, have had a rethink, and no more.I still would not set up a DD for £1 to any charity, for a DD.Just my principles.

masonic

zerog wrote: »

Looks like it's 1%, and we only need to consider the marginal costs of "abusers", 1p per month per DD isn't much, and would be preferable to £1 per month per DD for someone transferring £100 in and out just to keep off the radar.. of course no DD at all would be even cheaper

It is probably a fixed cost rather than a percentage - why would a larger value DD cost more?

It probably isn't a significant amount, though. Many businesses prefer you have a DD rather than a CPA from a debit card and it is estimated that debit card transactions cost about 8p to process.

puk999

joe134 wrote: »

I have a couple of DD's to charity, and they are for more than £1, but, after being hounded for more lately, have had a rethink, and no more.I still would not set up a DD for £1 to any charity, for a DD.Just my principles.

That's what I'm querying. You're questioning the ethics of others, and claiming to be principled yourself. Are these judgements based upon your own guess of how much it costs to process a DD? If so, realise others may be guessing a much lower figure than you and therefore believe they are ethical. If the judgements you're making are based upon evidence that it costs more than £1 to process a DD, then I'd like to see it so I can learn from it.

Isn't is safe for the donor to assume that if a charity will set up a DD for £1 that the charity will get some of that money after administration costs?

atypical

puk999 wrote: »

Can you provide evidence of the claim that it costs the charity more than £1 to administer the DD?

I'm not sure what 'administration' is required. A donor registers via a charity website and is automatically added to the charity's direct debit collection payment file. A large charity won't be paying more than around 5p transaction costs per collection. The direct debit should be set up electronically using AUDDIS. The charity may then choose to send paper confirmation to the home address but that won't cost more than £1 to print and deliver. They will also likely receive GiftAid so the £1 is £1.25. Where's the administration cost?

Here's what CAF Bank (a bank owned and run by a charity) charges smaller charities who otherwise wouldn't use direct debit:
https://www.cafonline.org/pdf/1319T_CAFDonate_Fees_Feb2014_FINAL.pdf

savings_my_hobby

joe134 wrote: »

I think setting a £1 dd with a charity is the cheek, not very ethical, it costs more to administer it..

the charities can make the money back by selling your details to other charities so I would not have any ethical worries there