GrandLuxe Going Under?

[printman2000]

http://www.leisuregrouptravel.com/tours-an...oses-doors.html

GrandLuxe Rail Journeys is closing down operations on Aug. 29, the company announced internally Tuesday morning. Employees were called into a meeting by Tom Rader, chairman and owner of GrandLuxe, who told them the company would cease operations with the return of the train to Tacoma on Aug. 28. In a letter drafted to send to clients, Rader wrote: “We are financially unable to continue operations.” Later in the letter, Rader said he was aware that consumers with booked trips will want their money refunded, but, he wrote, “At this time we just do not have many answers to your questions. … I am personally deeply sorry that we have failed to provide your trip.” He urged those who paid by credit card to contact the card company for refunds. Evergreen, Colo.-based GrandLuxe, formerly known as American Orient Express, operated train journeys around the U.S. and Mexico.

Did not see anything on Granluxe site.

 

[MrFSS]

And another report HERE.

 

[PRR 60]

I'm not sure how it is possible for them to not declare bankruptcy (Chapter 11 or 7) and still decline to refund paid travel. "Contact your credit card company" is saying that we will not issue credits or refunds, you have to ask your credit card bank to credit back your charge and have them become the creditor for you. And what if you paid by check? Sorry: out of luck Charlie. Remember, these are trips that cost $8000 or more for two. Ouch. Then there is the issue of related air fares for the future customers that, in many of not most cases, are non-refundable. That will add more to the hurt put on the folks who booked GL travel.

Pretty sleazy business practice, if you ask me. If they don't have the cash, then they are bankrupt, whether they officially file or not. The banks will see to that. Plus all you need is one lawyer amongst those future customers who gets a kick out of filing class action lawsuits. I don't think the future is too bright for this outfit. Considering the way they went out, I don't think the GL will be coming back under this ownership. They can only hope there is someone else out there to buy the operation, but I doubt it. Luxury train travel is a marginal business at best. Today's economy makes the numbers even worse.

But there will be some really nice equipment on the market. Any takers?

 

[jackal]

And what if you paid by check? Sorry: out of luck Charlie. Remember, these are trips that cost $8000 or more for two. Ouch.

I always ask myself why anyone would buy a big-ticket item with cash or a check. I can understand people not using credit cards at Taco Bell or Wal-Mart or even for a new shirt from J.C. Penney's, but for anything more--TVs, rental cars, airplane tickets, or especially $8,000 rail fares--I want that middleman who can financially hold a company to what it promised. Plus, most credit cards these days have some sort of free perks thrown in, like extended warranty protection, trip insurance, car rental damage insurance, etc. They may be pretty worthless (I'll tell you from personal experience on both sides of the issue that the car rental CDW one misses more than it hits!), but they're at least something and might prove useful one of those times.

People who drop 8 Gs in a stack of $100s almost deserve to lose them, if you ask me...(well, all right, that's a bit harsh, but still...).

 

[the_traveler]

I can understand people not using credit cards at Taco Bell or Wal-Mart or even for a new shirt from J.C. Penney's

And miss getting AGR points by using the AGR MC? Not me! :lol:

I have bought a stamp at the Post Office or IIRC some fruit at the supermarket for 25¢ with a credit card for the points!

 

[Grandluxe Passenger]

I was a passenger on the final Grandluxe Trip - they told the managers Tuesday night they were closing (one got very drunk that evening in the New York Observation car), and the staff Wednesday morning. They told us that most of the staff will be laid off effective Friday (August 29), but a small staff will take the train to Napa Valley where the train will be parked for the indefinite future. I can't say enough good about the staff - even though they were facing personal crises, they pulled together for the rest of our trip and did a great job.

What a shame to lose this train - it was the trip of a lifetime. I'm so glad I got to experience it.

 

[jackal]

I can understand people not using credit cards at Taco Bell or Wal-Mart or even for a new shirt from J.C. Penney's

And miss getting AGR points by using the AGR MC? Not me! :lol:

I have bought a stamp at the Post Office or IIRC some fruit at the supermarket for 25¢ with a credit card for the points!

I have, too...well, not the fruit, since there is no fruit up here that costs 25¢ (unless you want to buy a single grape or a thin slice of an apple).

But it bothers me slightly that the merchant is paying more to the credit card company than they are getting to keep from my transaction...

 

[the_traveler]

I can understand people not using credit cards at Taco Bell or Wal-Mart or even for a new shirt from J.C. Penney's

And miss getting AGR points by using the AGR MC? Not me! :lol:

I have bought a stamp at the Post Office or IIRC some fruit at the supermarket for 25¢ with a credit card for the points!

I have, too...well, not the fruit, since there is no fruit up here that costs 25¢ (unless you want to buy a single grape or a thin slice of an apple).

But it bothers me slightly that the merchant is paying more to the credit card company than they are getting to keep from my transaction...

I never understood that argument. I don't know exactly what the transaction fee is, but to make it easy, let's use 10%. (I know it's not that high, but it makes the figures easier.)

If someone buys a 50¢ item, the transaction fee is 5¢. If 10 people buy a 50¢ item, the total transaction fee is 50¢ (10 * 5¢).

If the merchant places a "$5 minimum for credit cards" limit, the transaction fee on that $5 minimum would be 50¢!

So how is the merchant losing money? :huh:

 

[MrFSS]

I can understand people not using credit cards at Taco Bell or Wal-Mart or even for a new shirt from J.C. Penney's

And miss getting AGR points by using the AGR MC? Not me! :lol:

I have bought a stamp at the Post Office or IIRC some fruit at the supermarket for 25¢ with a credit card for the points!

I have, too...well, not the fruit, since there is no fruit up here that costs 25¢ (unless you want to buy a single grape or a thin slice of an apple).

But it bothers me slightly that the merchant is paying more to the credit card company than they are getting to keep from my transaction...

I never understood that argument. I don't know exactly what the transaction fee is, but to make it easy, let's use 10%. (I know it's not that high, but it makes the figures easier.)

If someone buys a 50¢ item, the transaction fee is 5¢. If 10 people buy a 50¢ item, the total transaction fee is 50¢ (10 * 5¢).

If the merchant places a "$5 minimum for credit cards" limit, the transaction fee on that $5 minimum would be 50¢!

So how is the merchant losing money? :huh:

I used to have a source (can't find it right now) that showed it is illegal to set a minimum charge for using a credit card purchase. That is, If I want to use my visa card for a 2 cent purchase and the merchant accepts credit cards, they have to do it. It was supposed to be in the agreement between the card issuer bank and the merchant. Is that still true? Or, can limits be set?

 

[Joel N. Weber II]

I used to have a source (can't find it right now) that showed it is illegal to set a minimum charge for using a credit card purchase. That is, If I want to use my visa card for a 2 cent purchase and the merchant accepts credit cards, they have to do it. It was supposed to be in the agreement between the card issuer bank and the merchant. Is that still true? Or, can limits be set?

I'm pretty sure I've seen some merchant in the Boston area clearly posting that there's a minimum for credit card purchases, though wherever it was, it was a small enough business that they might be violating something and getting away with it.

The transaction fees generally are some small (probably less than $0.50) fee per transaction, plus some percentage of the transaction amount (probably a few percent), I thought.

 

[Joel N. Weber II]

I'm not sure how it is possible for them to not declare bankruptcy (Chapter 11 or 7) and still decline to refund paid travel. "Contact your credit card company" is saying that we will not issue credits or refunds, you have to ask your credit card bank to credit back your charge and have them become the creditor for you. And what if you paid by check? Sorry: out of luck Charlie. Remember, these are trips that cost $8000 or more for two. Ouch. Then there is the issue of related air fares for the future customers that, in many of not most cases, are non-refundable. That will add more to the hurt put on the folks who booked GL travel.
Pretty sleazy business practice, if you ask me. If they don't have the cash, then they are bankrupt, whether they officially file or not. The banks will see to that. Plus all you need is one lawyer amongst those future customers who gets a kick out of filing class action lawsuits. I don't think the future is too bright for this outfit. Considering the way they went out, I don't think the GL will be coming back under this ownership. They can only hope there is someone else out there to buy the operation, but I doubt it. Luxury train travel is a marginal business at best. Today's economy makes the numbers even worse.

Is Vermont still trying to buy DMUs from a company that shares some common management?

 

[jackal]

I can understand people not using credit cards at Taco Bell or Wal-Mart or even for a new shirt from J.C. Penney's

And miss getting AGR points by using the AGR MC? Not me! :lol:

I have bought a stamp at the Post Office or IIRC some fruit at the supermarket for 25¢ with a credit card for the points!

I have, too...well, not the fruit, since there is no fruit up here that costs 25¢ (unless you want to buy a single grape or a thin slice of an apple).

But it bothers me slightly that the merchant is paying more to the credit card company than they are getting to keep from my transaction...

I never understood that argument. I don't know exactly what the transaction fee is, but to make it easy, let's use 10%. (I know it's not that high, but it makes the figures easier.)

If someone buys a 50¢ item, the transaction fee is 5¢. If 10 people buy a 50¢ item, the total transaction fee is 50¢ (10 * 5¢).

If the merchant places a "$5 minimum for credit cards" limit, the transaction fee on that $5 minimum would be 50¢!

So how is the merchant losing money? :huh:

The transaction fees generally are some small (probably less than $0.50) fee per transaction, plus some percentage of the transaction amount (probably a few percent), I thought.

Joel is right. Credit card processing companies ("acquirers") charge a base flat fee plus a percentage. They vary with the acquirer and the size of your business (the more you do, the lower your rate, of course).

If you are a Costco member, you can get access to credit card processing through Nova for 20 cents per transaction plus 1.64%. I would assume that's a pretty competitive rate for small business credit card processing, since Costco usually has pretty good deals for members. Obviously, larger businesses probably have lower rates and smaller businesses who don't go through Costco probably have slightly higher rates.

With that plan, if you get anything less than 40 cents, the merchant pays more for the transaction than they get to keep. Even if you only two bucks, they're still looking at 10% in processing fees ($.20 / $2 = 10%). If the profit margin is less than 10%, well, they're actually taking a loss on selling you that product.

I used to have a source (can't find it right now) that showed it is illegal to set a minimum charge for using a credit card purchase. That is, If I want to use my visa card for a 2 cent purchase and the merchant accepts credit cards, they have to do it. It was supposed to be in the agreement between the card issuer bank and the merchant. Is that still true? Or, can limits be set?

You are correct. At least in the U.S., credit card associations' contracts with merchants stipulate that a minimum purchase cannot be set. Additionally, it is against their contract to place a surcharge for credit card transactions. (It is, however, not against the contract to provide a discount for paying with cash, which some merchants do to get around this.) These are contractual stipulations between the merchant and the card association (card association being VISA and MasterCard--an association of the banks who issue these cards, or, in the case of Discover/American Express, the credit card issuer itself), so they are only illegal insofar as any other violation of contract is illegal--there is no actual federal law against this.

However, smaller merchants, like Joel said, probably escape under the radar. The worst a card association can do, really, is cancel their contract with the merchant (I don't think the contract provides for any more than that). So, if a merchant receives enough complaints, they will be probably end up being banned from accepting credit cards altogether. Complaining about a merchant may end up being counterproductive, then!

 

[Anthony]

It is also against these merchant agreements for a merchant to require photo ID in order to complete a credit card transaction. They can ask for it, but if the customer refuses and they will not complete the purchase without seeing ID, they are in breach of contract.

 

[AlanB]

I'm not sure how it is possible for them to not declare bankruptcy (Chapter 11 or 7) and still decline to refund paid travel. "Contact your credit card company" is saying that we will not issue credits or refunds, you have to ask your credit card bank to credit back your charge and have them become the creditor for you. And what if you paid by check? Sorry: out of luck Charlie. Remember, these are trips that cost $8000 or more for two. Ouch. Then there is the issue of related air fares for the future customers that, in many of not most cases, are non-refundable. That will add more to the hurt put on the folks who booked GL travel.
Pretty sleazy business practice, if you ask me. If they don't have the cash, then they are bankrupt, whether they officially file or not. The banks will see to that. Plus all you need is one lawyer amongst those future customers who gets a kick out of filing class action lawsuits. I don't think the future is too bright for this outfit. Considering the way they went out, I don't think the GL will be coming back under this ownership. They can only hope there is someone else out there to buy the operation, but I doubt it. Luxury train travel is a marginal business at best. Today's economy makes the numbers even worse.

Is Vermont still trying to buy DMUs from a company that shares some common management?

I'm not sure just where Vermont is at right now, they've been on and off, however CRC kicked Tom Radar out maybe 6 to 8 months ago as President or whatever his official title had been. Tom was left with only GrandLuxe afer that to run.

 

[AlanB]

It is also against these merchant agreements for a merchant to require photo ID in order to complete a credit card transaction. They can ask for it, but if the customer refuses and they will not complete the purchase without seeing ID, they are in breach of contract.

Actually I thought that it was only illegal to write down any info from the license.

 

[Green Maned Lion]

Pretty sleazy business practice, if you ask me.

What would you expect from Rader?

But there will be some really nice equipment on the market. Any takers?

Me, if the prices are low enough.

I used to have a source (can't find it right now) that showed it is illegal to set a minimum charge for using a credit card purchase. That is, If I want to use my visa card for a 2 cent purchase and the merchant accepts credit cards, they have to do it. It was supposed to be in the agreement between the card issuer bank and the merchant. Is that still true? Or, can limits be set?

Breach of credit card contract, maybe. But not illegal. Unless you are demonstrating discrimination in some form, you can refuse to do business with someone, and not except whatever you want to not accept from them. You can turn a validated $100 bill from someone, or a validated quarter, or penny. You can also accept anything you want as payment from someone. I refuse to do business with people for the simple reason I don't like them and don't want their business. Or they are more of a pain in the keister to deal with than the money is worth.

I'll never be rich working with this attitude, but I have no desire to be.

 

[GG-1]

It is also against these merchant agreements for a merchant to require photo ID in order to complete a credit card transaction. They can ask for it, but if the customer refuses and they will not complete the purchase without seeing ID, they are in breach of contract.

Actually I thought that it was only illegal to write down any info from the license.

Aloha

While I was Secretary/Treasurer and had card charging account services, our contract required that we knew and verified the presenter of the card's Identity

 

[jackal]

It is also against these merchant agreements for a merchant to require photo ID in order to complete a credit card transaction. They can ask for it, but if the customer refuses and they will not complete the purchase without seeing ID, they are in breach of contract.

Actually I thought that it was only illegal to write down any info from the license.

From what I've read in the credit card merchant handbooks and all manner of sources online, Anthony is right. A merchant may only ask a credit card customer for identification if that is the standard policy for all manner of transactions, such as in the rental car, hotel, or airline industries, where all customers must show ID, even if they are paying cash. The credit card associations would rather take the chance of fraud than create an extra hassle for the customer, which might cause them to pay with cash or a check instead of using their card. Therefore, they forbid merchants from asking for extra identification.

Merchants are supposed to, instead, compare the signature on the back of the card with the signature on the receipt. This is the primary form of verification that the credit card companies want merchants to use. Also, technically, a card with no signature, or a card with the words "SEE ID" in the signature area, is not valid. A merchant taking a card that does not have a signature on the back is supposed to have the customer sign the card before they accept it. If the customer refuses to sign, the merchant is not supposed to accept the card.

However, this is another one of those little-enforced regulations, and it would probably be counterproductive to complain about it, since there would then be no chance of earning AGR points at your favorite store! :lol:

 

[Joel N. Weber II]

But there will be some really nice equipment on the market. Any takers?

Me, if the prices are low enough.

Unfortunately, I suspect that the scrap metal dealers who see an opportunity to recycle the Grandluxe equipment into automobiles will be willing to bid higher than you're likely to be able to afford. The Turboliner scrap prices I saw someone mention suggest the scrap value might be $15,000-$20,000 per car (wasn't it something like $100,000 per Turboliner trainset)?

There's a good chance that some other railfans will buy them if they're any good, though, I would think.

 

[Green Maned Lion]

A merchant taking a card that does not have a signature on the back is supposed to have the customer sign the card before they accept it. If the customer refuses to sign, the merchant is not supposed to accept the card.

I've never understood this. Really. I mean, lets say Joe Shmoe gets John Doe's card, right? The merchant doesn't know John Doe, or his signature. John Doe, stupidly, forgot to sign his card. The Merchant tells Joe Shmoe to sign the card. He signs it "John Doe". The merchant asks him to sign the receipt. He signs that "John Doe", too. By amazing coincidence... they match! WOW HE MUST BE JOHN DOE NOW!

 

[Joel N. Weber II]

A merchant taking a card that does not have a signature on the back is supposed to have the customer sign the card before they accept it. If the customer refuses to sign, the merchant is not supposed to accept the card.

I've never understood this. Really. I mean, lets say Joe Shmoe gets John Doe's card, right? The merchant doesn't know John Doe, or his signature. John Doe, stupidly, forgot to sign his card. The Merchant tells Joe Shmoe to sign the card. He signs it "John Doe". The merchant asks him to sign the receipt. He signs that "John Doe", too. By amazing coincidence... they match! WOW HE MUST BE JOHN DOE NOW!

Imagine a hypothetical card that is eventually going to be attempted to be used fraudulently in a transaction where the signature will be checked, and the rightful owner of the card happens to be someone who won't sign it unless some merchant tells them to.

The merchant asking the consumer to sign the card will have the effect of reducing the number of unsigned cards out there, which may reduce the amount of fraud that occurs (unless it turns out that the bad guys will just collect more cards so that they can find the same number of unsigned cards to abuse).

 

[jackal]

A merchant taking a card that does not have a signature on the back is supposed to have the customer sign the card before they accept it. If the customer refuses to sign, the merchant is not supposed to accept the card.

I've never understood this. Really. I mean, lets say Joe Shmoe gets John Doe's card, right? The merchant doesn't know John Doe, or his signature. John Doe, stupidly, forgot to sign his card. The Merchant tells Joe Shmoe to sign the card. He signs it "John Doe". The merchant asks him to sign the receipt. He signs that "John Doe", too. By amazing coincidence... they match! WOW HE MUST BE JOHN DOE NOW!

I've wondered about that, too. With any large business like the credit card industry, it's all about statistics. Joel's response is probably pretty accurate. The card companies probably believe it's an acceptable risk and would rather not tick off their customers.

 

[PRR 60]

I believe the requirement for a merchant presented an unsigned card (or a card with an illegible signature) is to require presentation of a photo ID. Only after the ID has been presented can a merchant accept the card and request the card be signed.

 

[jackal]

I believe the requirement for a merchant presented an unsigned card (or a card with an illegible signature) is to require presentation of a photo ID. Only after the ID has been presented can a merchant accept the card and request the card be signed.

You may be right. Unfortunately, I cleaned my desk out and took the Visa handbook home, and I'm at work right now. Will check tonight if I remember.

 

[VentureForth]

What if Amtrak (like they could afford it) bought the trainset and ran a 2nd Empire Builder with it? Better yet, ran a loop - CHI - SEA - EMY - CHI