# GrandLuxe Going Under?



## printman2000 (Aug 28, 2008)

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 (Aug 28, 2008)

And another report *HERE*.


----------



## PRR 60 (Aug 28, 2008)

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 (Aug 28, 2008)

PRR 60 said:


> 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 (Aug 28, 2008)

jackal said:


> 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 (Aug 28, 2008)

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 (Aug 29, 2008)

the_traveler said:


> jackal said:
> 
> 
> > 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
> ...


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 (Aug 29, 2008)

jackal said:


> the_traveler said:
> 
> 
> > jackal said:
> ...


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 (Aug 29, 2008)

the_traveler said:


> jackal said:
> 
> 
> > the_traveler said:
> ...


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 (Aug 29, 2008)

MrFSS said:


> 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 (Aug 29, 2008)

PRR 60 said:


> 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 (Aug 30, 2008)

the_traveler said:


> jackal said:
> 
> 
> > the_traveler said:
> ...





Joel N. Weber II said:


> 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.



MrFSS said:


> 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 (Aug 30, 2008)

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 (Aug 30, 2008)

Joel N. Weber II said:


> PRR 60 said:
> 
> 
> > 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.
> ...


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 (Aug 30, 2008)

Anthony said:


> 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 (Aug 30, 2008)

PRR 60 said:


> Pretty sleazy business practice, if you ask me.


What would you expect from Rader?



PRR 60 said:


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


Me, if the prices are low enough.



MrFSS said:


> 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 (Aug 30, 2008)

AlanB said:


> Anthony said:
> 
> 
> > 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.
> ...


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 (Aug 31, 2008)

AlanB said:


> Anthony said:
> 
> 
> > 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.
> ...


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 (Aug 31, 2008)

Green Maned Lion said:


> PRR 60 said:
> 
> 
> > But there will be some really nice equipment on the market. Any takers?
> ...


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 (Aug 31, 2008)

jackal said:


> 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 (Aug 31, 2008)

Green Maned Lion said:


> jackal said:
> 
> 
> > 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.
> ...


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 (Aug 31, 2008)

Green Maned Lion said:


> jackal said:
> 
> 
> > 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 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 (Aug 31, 2008)

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 (Aug 31, 2008)

PRR 60 said:


> 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 (Sep 3, 2008)

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


----------



## VentureForth (Sep 3, 2008)

Note... Rader has a lot of great ambition and if it weren't for his vision, a lot of people would not have had the opportunity to enjoy the premium rail service of Grand Luxe nor the whimsical experience of the Florida Fun Train.

That being said, just about every venture he has taken on has resulted in failure - with perhaps the lone exception being the manufacturing of double decker luxury dome coaches. Even his DMUs are struggling and arguably successful.

Does anyone know what the status of the American Orient Express was when he bought it? Was it profitable at the time? Were they courting a buy out, or did Rader see a successful venture, buy it out, and run it into the ground? In other words, would AOE have lasted any longer without Rader?


----------



## AlanB (Sep 3, 2008)

VentureForth said:


> That being said, just about every venture he has taken on has resulted in failure - with perhaps the lone exception being the manufacturing of double decker luxury dome coaches. Even his DMUs are struggling and arguably successful.


They aren't his DMU's anymore. As I noted back on page 1 of this topic, Radar was given the boot by CRC several months ago.


----------



## Joel N. Weber II (Sep 3, 2008)

VentureForth said:


> 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


You'd have something like 1000 more tractor trailers on the highways each day to replace the 1000 single passenger automobiles you'd take off the highways each day that way?

(Or something. 1000 is a pretty rough guess. But without a lot more track investment, you'd probably be increasing the country's overall energy consumption, not decreasing it.)


----------



## MontanaJim74 (Sep 4, 2008)

This is perfectally understandable from what i heard of how they ran their operations. I just came back from a visit to my hometown of Livingston, MT. My mother works at the depot there. This depot is one of the best designed depots in the country, designed by the same architects as Grand Central Station. But it wasnt on the Grandluxe tour itinerary--instead they were bussed straight to and from yellowstone and grand teton parks. I also heard that guests were hurried everywhere and didnt even have time to buy souvenirs. Go read some of the trip reports about this company--apparently bedding was rarely changed and clean towels only given out once during a week-long trip. And the company had a grade of F from the Better Business Bureau. So no, I am not the least surprised this company went under.


----------



## Joel N. Weber II (Sep 4, 2008)

VentureForth said:


> 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


The other issue is that I think Grandluxe has something like one 15 car trainset. The Empire Builder probably has 4-6 trainsets. Even if there were track capacity and even if it made sense for Amtrak to buy that equipment, the second daily Empire Builder run would then have something like three cars per trainset.

You probably could add two or three cars to each existing Empire Builder trainset and have no trouble filling them for most of the route.


----------



## the_traveler (Sep 4, 2008)

I agree. Since there are so few cars, and they are all single level, that also restricts where and how they could be used. There would not be enough for a new route or a second run on an existing route. But _maybe_ something could be done, such as adding sleeping cars on the Silver trains, the LSL or the Crescent. Or even  returning sleepers to #66/67!


----------



## travelerpaul (Sep 6, 2008)

Grandluxe Passenger said:


> 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.


I'm going to Napa Valley next month. Do you know specifically where I can find this train?


----------



## MrFSS (Sep 6, 2008)

travelerpaul said:


> Grandluxe Passenger said:
> 
> 
> > 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.
> ...


The *Napa Valley Dinner Train* storage yards are *HERE*. Click on MAP selection from the Google Map View to see the streets, etc. It has been a few years since I was there, but it might be a logical place to store a passenger train.


----------

