INC NEWS - Duke Card has merchants singing blues (Sunday Herald-Sun)

[John Schelp]

Duke Card blues: Merchants want rules eased for using
student card to buy off campus
by Anne Krishnan, Herald-Sun, 13 November 2005   

The way John Schelp sees it, Duke University is an
island of 11,000 credit-card holders who eat, drink
and shop with currency that most off-campus businesses
can't accept. 

"It's a captive audience you have on campus," he said.


That's why Schelp and some merchants are calling on
the university to make it easier for local businesses
to accept Duke Cards, the debit and meal card that's
generally regarded as the standard currency on Duke's
campus. 

"That's almost the only thing you take out of your
wallet all week," said Ian Long, a sophomore English
major from California. 

But Duke requires off-campus merchants to spend $1,200
in initial set-up costs and pay an 18 percent
commission to be able to accept the Duke Card. What's
more, only restaurants can participate and they have
to deliver food to campus to take advantage of the
program. 

While 15 restaurants, 11 of them locally based, have
signed on to the plan since 1990, Schelp, president of
the Old [West] Durham Neighborhood Association, has
heard others complain that the costs are prohibitive. 

"It's just too much," he said. 

He's pressing Duke President Richard Brodhead and
Executive Vice President Tallman Trask to make the
system easier and cheaper. Trask agreed to review the
program, and Schelp expects to hear from him on
Friday, a month from their last conversation. 

But Schelp isn't just looking for financial
concessions; he also wants to see Duke allow all sorts
of merchants to accept the Duke Card for both on- and
off-campus sales. 

"This is good for Duke, it's good for town-gown
relations and it's good for students," he said. "It's
a win-win-win." 

Duke is conducting a financial and legal analysis of
its existing program, spokesman John Burness said. He
wouldn't specify what aspects of the program might be
tweaked. 

"We have a variety of different options and no
conclusions yet," he said last week. "Our goals in
making whatever changes might come about are to
provide greater convenience to our students while
helping to encourage existing businesses closest to
the campus to thrive." 

Students spend about $3 million a year on food
purchases from the 15 restaurants that deliver to
campus as part of the Duke Card program, Burness said.


"The feedback [from those businesses] is
overwhelmingly positive," he said. Many vendors have
told Burness' colleagues that "if they didn't have
this relationship with the Duke Card program, they
wouldn't be in business," he said. 

Jimmy John's Sandwich Shops, which just started
accepting the Duke Card and delivering to campus this
year, is reaping the benefits, said manager Tone
Gould. Half of the Ninth Street restaurant's sales
come from Duke Card purchases, he said. 

Likewise, Pop's Trattoria has been accepting the Duke
Card since August. Even though the cost of the program
is high, the extra business is still a benefit, said
Matthew Bason, who owns the Peabody Place restaurant
with chefs Chris Stinnett and John Vandergrift. 

The order volume is currently low enough that it
doesn't require any extra staff, and students using
the Duke Card aren't taking up seats that would
otherwise be occupied by diners paying all their money
to Pop's, he said. 

"We're not losing business based on it, and the
business gained is business we didn't have before,"
Bason said. "For us, what the Duke Card offers is a
little bit of an extra bonus to any night's business."


Pop's currently is filling four or five orders each
night through Gourmet Dining and Bakery, an Internet
service developed by Duke students that takes the
orders and delivers the food to campus. Five of GDB's
11 participating restaurants accept the Duke Card; the
others accept payment by credit card only. 

Meanwhile, Blue Corn Café supports Duke, but its
business is strong enough that it doesn't need to
accept the Duke Card and pay the corresponding high
commission, said owners Danielle and Antonio Rios. The
restaurant's margins are tight enough without having
to give a cut to the university, they said. 

The financial requirements aren't the only reason
restaurants don't participate. Fowler's Food and Wine
co-owner William Simpson would be happy to pay the
commission if dealing with Duke weren't so difficult,
he said. 

"We love Duke students and we'd love to be able to
offer the card," he said. "But finding the right
person who can make the right decision -- we've run
into logistical problems." 

The Regulator Book Shop also doesn't take Duke Cards,
but that doesn't stop students from trying to use them
there, said co-owner John Valentine. 

"Students always ask if we take Flex cards," he said.
"They assume we do, but the tariff Duke charges is too
steep." 

The Regulator sells textbooks for 150 courses and also
has a good relationship with Duke's athletic
department, Valentine said. Still, he'd be happier if
it were easier for students to spend money at his
store. 

"With or without Duke, we will survive, but the more
Duke we can have, the better," he said. 

The perception has always been that the university
replicates the community's good ideas on campus so
that students have no reason to leave, Valentine said.
But Ninth Street also must make itself an attractive
alternative to Duke so students will venture out to
nearby stores and restaurants, he said. 

Long, who visits Ninth Street about once a week to eat
or shop at The Regulator, said he leaves campus more
often than many of his classmates. Local businesses
shouldn't have to accept the Duke Card to draw
students to the surrounding areas, he said, but he
acknowledged it would be an effective marketing
strategy. 

"People feel really comfortable in the Duke bubble and
aren't as willing to get off onto Ninth Street as they
should be," he said.