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B&H announced that they are launching the B&H Payboo card in conjunction with Synchrony Bank. It’s a no annual fee store card that will only work at B&H. There is no signup bonus for the card.
Purchase APR is a whopping 29.99%, so you’ll want to make sure to pay off your card on time.
The card will give you instant savings equal to the amount of the sales tax charged on a purchase from B&H.
If you live in a state where B&H does not charge sales tax, namely Alaska, Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Idaho, Kansas, Louisiana, Massachusetts, Montana, Missouri, New Hampshire, New Mexico, Ohio, Oregon, Pennsylvania, Puerto Rico, Rhode Island, Tennessee, Texas, and Virginia, then the card won’t offer any benefit.
The card will offer a discount equal to sales tax in CA, CT, HI, IL, KY, MD, ME, MI, MN, MS, NC, NJ, NV, NY, OK, SC, SD, UT, WA, and WI.
Alabama, District of Columbia, Indiana, Iowa, Nebraska, North Dakota, Vermont, West Virginia, and Wyoming restrict the advertising of a sales tax discount, so in those cases it’s just called savings, but it should still be equal to the sales tax rate.
I can’t say that I’m a fan of the Payboo name, but this is a very solid rebate on B&H purchases if you live in a location that has hefty sales tax on B&H purchases. Frankly I’m surprised that B&H can afford to effectively rebate the sales tax on items across the board, but they say that they are remitting the full sales tax amount to each state and that there is no limit to the savings.
Non-taxable items like gift cards and tax-exempt customers don’t qualify for a discount.
Of course it’s worth noting that you will lose out on points and benefits like extended warranty and purchase protection that other credit cards offer.
Personally I live in Ohio where B&H doesn’t charge sales tax, so this card doesn’t offer anything for me. It’s too bad there’s no rebate for anyone shipping items to these states. Using another card I can earn points and have credit card benefits. I also use my Chase Ink Cash card to earn 5 Chase points per dollar on purchases from Amazon (which I value between 7.5%-10% back), but there is no such equivalent rebate for B&H purchases.
Big B&H spenders may do very well with this card, but occasional buyers probably won’t be find it worthwhile to signup for another credit card as they won’t see enough incremental savings over other cards.
In other words if you spend $1,000/year at B&H and live in NYC, you’ll save $88.75/year in sales tax at 8.875%. But if you use a card like The Blue Business℠ Plus Credit Card from American Express that earns 2 AMEX points per dollar or Chase Freedom Unlimited Card that earns 1.5-3 Chase points per dollar or the Chase Ink Unlimited Card that earns 1.5 Chase points per dollar, that will be worth between 3%-6% back, plus you’ll also have extended warranty and purchase protection. 3% back would be a rebate of $30, so the B&H card would save you another $58/year, at the cost of the loss of credit card protections and needing to apply for a card that doesn’t offer a signup bonus.
But if you spend $20,000/year at B&H and live in NYC you would save some $1,775/year in sales tax versus a 3% on another card that would be worth $600. That would certainly make it worth applying for this card.
Will you signup for the B&H Payboo card?
Great breakdown/analysis as always Dan
Thanks
you missed that many people don’t pay down their credit cards so bh is relying on the 29 percent apr many people will pay
Anyone know what the deal is with California? It’s not listed in the excluded states but entering a CA zip code shows a message “Sorry, the offer is not valid in this state.”
I just reached out to B&H. I’m told that tax for CA shipments will begin tonight at 12am EDT and that CA will be eligible for the discount at that point.
California is a בריאה בפני עצמה
בריה
B&H photo does not collect sales tax in the state of California just yet, coming soon
Card link isn’t working
“Frankly I’m surprised that B&H can afford to effectively rebate the sales tax on items across the board”
With a 29.99% APR they can afford much more than that if only a small percent of charges are financed.
I doubt enough people will wind up paying 30% interest in order to subsidize the cost across the board.
You underestimate the financial illiteracy of the American consumer
Agreed. “I can buy a $500 for only $12.50 a month??? Great.” “But sir – you will pay $12.50 a month for 5 years and still owe $500.” “That’s a problem for future me — i.e. not my problem. Maybe we should get a bigger tv!”
Seems like “Earn 2% in Rewards” on some items can be stacked with this Payboo offer…Though Earn 2% in Rewards is mainly on Digital Cameras
That’s not a cash rebate. And it can be “stacked” with any credit card.
Is it a straight up rebate and applied to your cc bill or is towards a future purchase? So they are banking that ppl will forget and/or it expires before they purchase again
No, it instantly discounts the price of the item.
can you explain how you value 5 Chase points at 7.5%-10% back on amazon purchases?
Is there any shaila regarding ribbus?
Synchrony isn’t a heimishe bank
As with any other credit card issued by any bank, in this case it’s Synchrony Bank.
Does b@h get the interest, or the bank?
Reb yid, if B&H were to collect the interest then thats something between them and the almighty.
Not true. You are not allowed to pay it if it goes to a you.
Barry, you aren’t allowed to pay what? The credit card interest? Good luck telling that to the CC companies and financial institutions.
no you are not allowed to make a purchase al da’as to pay interest for a yid not even sure you’re allowed to signup for a card that has a option on paying ribis for a yid
I’d assume that the bank gets the interest, not B&H.
Maybe they have a heter iska
B&H saves money by not having to pay service fees as with other credit cards, plus they get a fixed amount % from Synchrony regardless if the consumer paid it off in full or carries it over and paying interest. So no, B&H does not get the interest.
For them they are saving 2-3 percent on cc processing plus some people will end up paying the 30% interest
And for people most of us like instant savings so that’s a pull
Synchrony is probably paying them another 2-3% (either in a fixed payment or per purchase) for the right to own the CC that charges 30%.
Also, B&H may end up “losing” on a purchase, but if you buy a lot of things and choose B&H because you get this “discount”, they will generate more business
Is it a soft pull or a hard pull on credit line ?
Regular pull just like any other credit card
hard, as any cc application0
Interesting.
They are effectively discounting their price by 7%, but doing it in a way that the discount is only offered to those in states with tax.
The others will still pay regular price for the items.
Depends on the state and city. In NYC the effective discount is 8.15% (try it: take any number, deduct 8.15%, then take the result and add 8.875%. You’ll be back at the original number)
The tax is calculated on the purchase price before this discount. They cannot do this is a pre tax discount so they end up discounting the full tax rate after tax is calculated. In NYC they would end up giving an 8.875% discount.
Unless the savings is being passed to the customer as a rebate (which might be the case), they can not first apply the sales tax and then discount the purchase by that amount, because then they’re effectively reducing the selling price and they will have to recalculate the sales tax on that new lower price.
The correct way to calculate this “sales tax savings” is how I described above. I’ve been doing it this way in my NYC retail business for over 25 years and I happen to have a degree in accounting.
I’m well aware of this, calculation is 1-(1/(1+taxrate)). However, this is NOT hey they are doing it since it’s not being done as a discount but rather as a reward applied after tax.
On my invoice on a $315.80 purchase with B&H using this card, it has tax of $28.03 and a “Payboo Card Savings” of the same amount. If it would have been done as a pre-tax discount then it would have had tax of $25.74 and a discount of the same amount (315.80 – 25.74 = 290.06 x .08875 = 25.74). Instead they collected 28.03 in tax and gave me a reward in the same amount.
My guess is a lot of taxing authorities would be unhappy if being done as a discount because it would have reduced their tax receipts. If done as a discount, NYC with an 8.875% tax rate would have collected $8.15 on a $100 purchase instead of $8.88. Maybe there are legal issues as well.
See also https://www.tax.ny.gov/pubs_and_bulls/tg_bulletins/st/taxable_receipt.htm
Not every type of discount can be deducted from the taxable sales amount. Manufacturer’s rebates is one example, perhaps this is similar. Either way, my invoice shows that they are calculating the full tax amount and applying the savings after tax.
So, in essence, B&H is handling this discount as a rebate, and they are giving back to the Payboo cardholder the full tax that was paid on the full selling price. I think that is silly on B&H’s part, because now on every $1000 they are keeping only $911.25, when they actually could set it up to keep $918.50. It might seem like a small difference, but in business, especially the type of business that B&H is in, that difference is HUGE! After deducting cost of goods, labor, and other expenses, $7.25 out of every $1000 can amount to 10%-35% of net profit.
As far as your point that the tax authorities “won’t be happy” with reducing the item’s price to offset the sales tax: that is totally irrelevant (then they won’t be “happy” with ANY discount or sale!).
Businesses don’t need to make the tax authorities “happy”, and the tax authorities are not looking to be “happy”. Both sides are only concerned with one thing: “compliance”. If it’s done in a legal fashion, then it’s in compliance.
A side point: ever wonder about the sales tax effect of coupons? No? Well, here it is anyway:
Manufacturers Coupons reduce the PAYMENT, so they have no effect on reducing the sales tax.
Store Coupons reduce the PRICE OF THE ITEM, so they SHOULD reduce the sales tax as well. Not every store does this correctly (whether intentionally or not, I can’t tell you).
Rebates (whether Manufacturer or Store rebates) usually are considered to be relating to the PAYMENT, so they don’t reduce the sales tax. INSTANT REBATES should be considered as a reduction in the item’s price and reduce the sales tax as well.
You’re right. If they provided a discount of 8.15% it would end up giving the consumer the same savings over a rebate of 8.875%. My guess is they had to set it up as a rebate for legal reasons, perhaps synchrony is sponsoring it?
Either way, to me the consumer it’s the same savings and it’s a good deal as I shop there often. I don’t carry balances, else the 30% APR would have been a killer.
My business is tax exempt so I won’t be gaining anything from this, but I think they will lose a lot since I don’t see why a new tax exempt customer should apply for a tax exempt account when he can get it back even without the paperwork.
Because you could use a different credit card that gives you other benefits (cash back/points/purchase protection etc) and still not pay sales tax.
The payboo was introduced as a way to save taxes. But I can imagine that they will want tax exempt customers to sign up as well, I’m pretty sure some additional savings will follow. Like a sign-up bonus, or they can make a deal with lets say Canon to save x% on all Canon products when paying with PayBoo…
Seems odd to offer a card that offers nothing to the states with no tax.
Dan, you forgot to mention the upside of using the ink card with the Visa Savings Edge rebate.
Long since dead.
🙁 Didn’t shop there in a while.