Accepting credit cards

[tmbrk]

I have had more than a few requests by customers for me to start accepting credit cards for payment on service work. Can anyone give me a good company that a small (3 man) service contractor could use to set up a merchant account? I would not need a POS machine, I'm thinking of just calling them in and at least saving that much. I have looked into a company called Accept-by-Phone and they seem to look good. Any info would be greatly appreciated.:)

[barbeer]

Do you have a Sam's Club membership? - I believe they offer a service.

[tmbrk]

Thanks Barbeer. I'll definitely check it out.

[memyselfandI]

Customers always ask me if I accept plastic and I tell them sure...as long as it's wrapped around a bunch of cash.

[SmithBuilt]

A couple of years ago I had a customer ask me if I took a credit card, I didn't. Still got the job said he would give me a check. I haven't seen it yet. I sure wish I had taken the card now.

[brian john]

My partner fought accepting cards and still complains about the percentage the banks take..But we deal with the government and payment use to take 60-90 days no it is as fast as we can process the paper. We also have commercial customers are moving this way.

[emahler]

My partner fought accepting cards and still complains about the percentage the banks take..But we deal with the government and payment use to take 60-90 days no it is as fast as we can process the paper. We also have commercial customers are moving this way.

and your partner is the business brains of the operation? doesn't he realize the cost of A/R? hell, 1.5% is nothing in order to have the cash flow...put the remainder of the money in a 4% account and only transfer the money needed to a checking account. You'll get back your 1.5% in no time, and have the cash available if needed.

[scott moran]

quicken / quick books has a merchant service that will work for you.

[brian john]

I have been in business 23 years, and have done exceedingly well to date, putting my trust and faith in this man. I have no complaints, but do feel Credit Cards are the wave of the future, he is a bit more conservative and treads lightly when it comes to change.

[satcom]

and your partner is the business brains of the operation? doesn't he realize the cost of A/R? hell, 1.5% is nothing in order to have the cash flow...put the remainder of the money in a 4% account and only transfer the money needed to a checking account. You'll get back your 1.5% in no time, and have the cash available if needed.

Accepting credit cards cuts way down on the A/R costs, and attracts the paying customers, that service fee more then pays for itself, plus we get the card info before making the call, and have the dispatch fee paid before we get there, no more driving to no shows, or no payment, calls, If they don't have a credit card, that is a big red flag waving, customers will have work done on credit, that they would not do, if were checks or cash only.

[SmithBuilt]

So you charge the customer for the call before going. As the job progresses when do you stop and get another payment, if its a large job?

Do you prequalify the cc for the amount the job will be before you do it? I'm worried about the credit card being over the limit or denied. Knowing that the customer don't have cash, that being the reason for the cc.

[satcom]

So you charge the customer for the call before going. As the job progresses when do you stop and get another payment, if its a large job?

Do you prequalify the cc for the amount the job will be before you do it? I'm worried about the credit card being over the limit or denied. Knowing that the customer don't have cash, that being the reason for the cc.

Well, I really don't know of any other service companies, in the area that don't pre qualify before making a call, and charge the account before reaponding.

"As the job progresses when do you stop and get another payment, if its a large job?"

There is no progress past the dispatch fee, until they have agreed to the contract to do the work.

[bradleyelectric]

There is no progress past the dispatch fee, until they have agreed to the contract to do the work.

How much do you charge for a dispatch fee? What do they get for the dispatch fee?

[satcom]

How much do you charge for a dispatch fee? What do they get for the dispatch fee?

It will depend what zone they are in, 5 miles 10 miles 15 miles 20 miles, will determine the fee, it gets me to the door to look at the job.

[bradleyelectric]

It will depend what zone they are in, 5 miles 10 miles 15 miles 20 miles, will determine the fee, it gets me to the door to look at the job.

I understand charging different per zone. How much for zone 1,2,3,4?

[satcom]

I understand charging different per zone. How much for zone 1,2,3,4?

We don't have a hard fast fixed price, for dispatch, how is your volume, what is the general market like, are we busy, are we slow, Is one zone being worked more then another.

[Greg Swartz]

I have been holding off accepting them for as long as I can.

However, I had a customer recently that really wants to use one. Since the job was over $1,000 I let him do it.

I use quickbooks for my invoicing and proposals. If you give an invoice, all you have to do is add the card to the customer's account. Make a few clicks, tell quickbooks what invoice you are billing, and it charges the correct amount to the correct card. I didn't have any problems.
They charge $10 a month + 2.3% per transaction + $0.50 per transaction. So, for an $1100 bill, it cost me roughly $25. I just threw that price into the bill somewhere... Customer never knew he was paying extra to use the card.

I even delayed billing by 6 hours, because I could not get an unscrambled wireless signal from my laptop. I went to my nearest area, computer sent the signal out, and it was processed. Took about 2 days to get the cash.


Someone mentioned that Sams Club does these services. Yes they do, and they also do payroll services too. One of my clients uses the Sams Club service.

[Greg Swartz]

"As the job progresses when do you stop and get another payment, if its a large job?"

If a job is large, I ususally try to get a percentage down before starting.
I like 25%, but sometimes that does not work out very well.
Large jobs usually take more than a month, so I bill monthly based on a percentage of work I have completed. Some jobs I have billed 3 or 4 times before getting everything.
For example: I bill for May somewhere around the 25th of the month, and expect to get a check by somehwere around the 1st - 2nd week of June. That's just the way it works for many contractors. I tell them that I completed xx% this month in these areas and bill accordingly.

Greg :cool:

[khixxx]

Has anyone tried to open a paypal account? Just a thought. no remote machines for your guys to break. you just tell the customer to pay $X to the paypal account. I have heard of people doing this I just never investigated it. I'm sure the process fees are higher.

You can send me a PM my buddy can set up machines for you. He tells me all the time about the great deals he is given companies. He usually does not work with small companies. He tells me there is no money for him.

[Greg Swartz]

I too have heard about people accepting PayPal as a form of payment.

I have heard rumors that the fees run somewhere around 5%.

Greg :cool:

[Kessler4130]

I use the cc processing from quick books as well because with the handheld machine I get 100% coverage. Sams club offered no signal at all in alot of areas I do work in so make sure you look into what kind of signal coverage they will have before making a commitment.

[bradleyelectric]

we have 1 machine at the office. We manually enter the cc information we get from the customer into it.

[kbsparky]

I too have heard about people accepting PayPal as a form of payment.

I have heard rumors that the fees run somewhere around 5%.

Greg :cool:Rumors like that are false. PayPal charges 2.9% plus a transaction fee of $.30.

No monthly charges on a regular paypal account, either.

They do charge about $20 a month if you set up a virtual terminal merchant account, however.

[dbuckley]

So, for an $1100 bill, it cost me roughly $25. I just threw that price into the bill somewhere... Customer never knew he was paying extra to use the card.

Is that legal?

[emahler]

Is that legal?

why wouldn't it be?

[SmithBuilt]

Is that legal?

One way or the other the customer has to pay for it. We all do.

[satcom]

why wouldn't it be?

Well the way I see it, is when loan sharks charged 10% they were locked up. Today they operate as ligit companies, dress without the dark glasses, and get twice the rate at 18 to 24% and the only person that gets locked up, is someone that may fall behind in their credit card payments.

[brian john]

is someone that may fall behind in their credit card payments.

Quite off the thread line, but responsible use of credit cards can avoid this problem. And yes I know there are extreme conditions where people get in debt for VALID reasons. But IMO they are most likely few and far between.

[satcom]

Quite off the thread line, but responsible use of credit cards can avoid this problem. And yes I know there are extreme conditions where people get in debt for VALID reasons. But IMO they are most likely few and far between.

"Quite off the thread line"

It's right on the topic, when you plan to accept credit cards, you need to understand the cost of processing, and the risks involved, one of them being bad credit.

"I know there are extreme conditions where people get in debt for VALID reasons. But IMO they are most likely few and far between"

As of March 07, over 25% of current card holders are either late with payments, or falling behind on payments, this tends to slow down purchasing power, and in turn results in the general economy slowing, this is where you have to be ready to adjust your business for a down market, when you see these signs.

We have been accepting credit cards since 86 and found they do help increase the anount of work someone will have done, The reason I noted the cost of credit card intrest is, there are other options, for you and the customer, you can offer pre arranged bank loans at better rates, provided your customer qualifies.

[dbuckley]

why wouldn't it be?

Well, if you accept Visa or Mastercard (MC to save my typing) it is in your agreement that you wont add surcharges to customers who pay using the card. Amex doesn't prohibit surcharging, but requires that your card policy is non-discriminatory, the effect of which is that if you only accept Amex you can surcharge, but if you accept Visa or MC as well then you cant surcharge Amex, as you cant surcharge Visa or MC.

Thats what you signed up to, look in your agreement, you'll find wording like this example:

(c) Merchant shall not require any Cardholder to pay any part of any fee imposed upon Merchant by this Agreement, whether through any increase in price or otherwise require a customer presenting a Card to pay any charge as a condition of sale that is not also required from a customer paying cash. However, Merchant may offer discounts to customers for cash purchases. Merchant may also charge a service fee on Transactions if Merchant charges a service fee: (i) for all payment methods (check, credit card, etc.) or (ii) for a specific payment mode (telephone) and not for other payment modes (face-to-face);

Additionally, I believe that if you are conducting business in the states of California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas then state law prohibits credit card surcharges.

The goal is simple; the merchant (thats you) pays for the convenience of the customer being able to pay you, not the customer. You get paid the discounted amount. As noted in another posting, thats what you buy into when you accept plastic. Plus a per monthly charge for your terminal, plus the possibility that you may get "charged back" for transactions that the cardowner disputes. This is very likely if you put charges through without having the plastic in your hand and the customer sign the chit, the "customer not present" nightmare.

Offset from this is that accepting plastic when the other guy doesn't can get you the job. If the client doesn't have the funds available to do the work now, he may put the job on credit. Sure, one day the piper will require to be paid, but you've got your money by then, its the customers problem.

A quick google gives me this from the Texas Attorney General:
In Texas, a business cannot penalize consumers who pay for a good or service by using a credit card. Businesses that add a surcharge to thosewho pay by credit card might be violating provisions of the Texas Finance Code. Usually those fees can only be charged by government entities, such as for the payment of property or other taxes or other fees required by a government agency. However, businesses in Texas can discount the regular retail price of an item for consumers who pay cash instead of using a credit card. Consumers who are charged extra for using a credit card should report it to my office by calling us at 1-800-252-8011 or filing a complaint online at www.oag.state.tx.us

[Brian J.]

Why not just have standard pricing, taking into account all costs of doing business, and issue discounts to cash paying customers. :cool:

[satcom]

Why not just have standard pricing, taking into account all costs of doing business, and issue discounts to cash paying customers. :cool:

That's how we have been doing it for years, and it works well, because we can discount however we please.

[Greg Swartz]

Why not just have standard pricing, taking into account all costs of doing business, and issue discounts to cash paying customers. :cool:

Brian, I've been looking at doing this very thing...
question is: do I treat check customers as cash customers?

[Greg Swartz]

Well, if you accept Visa or Mastercard (MC to save my typing) it is in your agreement that you wont add surcharges to customers who pay using the card. Amex doesn't prohibit surcharging, but requires that your card policy is non-discriminatory, the effect of which is that if you only accept Amex you can surcharge, but if you accept Visa or MC as well then you cant surcharge Amex, as you cant surcharge Visa or MC.

Thats what you signed up to, look in your agreement, you'll find wording like this example:



Additionally, I believe that if you are conducting business in the states of California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas then state law prohibits credit card surcharges.

The goal is simple; the merchant (thats you) pays for the convenience of the customer being able to pay you, not the customer. You get paid the discounted amount. As noted in another posting, thats what you buy into when you accept plastic. Plus a per monthly charge for your terminal, plus the possibility that you may get "charged back" for transactions that the cardowner disputes. This is very likely if you put charges through without having the plastic in your hand and the customer sign the chit, the "customer not present" nightmare.

Offset from this is that accepting plastic when the other guy doesn't can get you the job. If the client doesn't have the funds available to do the work now, he may put the job on credit. Sure, one day the piper will require to be paid, but you've got your money by then, its the customers problem.

A quick google gives me this from the Texas Attorney General:

You've nailed me. I never read that far into the small print. I am wrong and I admit it! However, the HO is NOT getting his money back! :rolleyes:
I'll put it under material... yeah... that's the ticket... material!!!

[emahler]

point being...there is no line item "Credit Card Fee"

it's simply a cost of doing business and is figured into the OH.

If you are doing a flat rate price, it's in there.

If you are doing T&M, well...good luck.

[SmithBuilt]

I wonder what the difference is for a cash discount and surcharge as far as the law is concerned?

The end results are the same. The customer pays for the cc fee.

[emahler]

I wonder what the difference is for a cash discount and surcharge as far as the law is concerned?

The end results are the same. The customer pays for the cc fee.

winner...winner...

[Greg Swartz]

I wonder what the difference is for a cash discount and surcharge as far as the law is concerned?

The end results are the same. The customer pays for the cc fee.

Thats the way I look at it.

I am not going to lose money just to accept a stinkin' credic card. True that you get your money now, but, I see no reason why I should have to pay for that convience. The customer got what they wanted "now" and there were no reprocussions.

[LarryFine]

I am not going to lose money just to accept a stinkin' credic card. True that you get your money now, but, I see no reason why I should have to pay for that convience. The customer got what they wanted "now" and there were no reprocussions.

Thats the way I look at it.The way the world looks at it is that you were the more desireable contractor because you made it more convenient for the customer to pay for the job.

(I'm not disagreeing with you, by the way. I have lost exactly one job over the years because I do not accept cards.)

[dbuckley]

You've nailed me. I never read that far into the small print. I am wrong and I admit it! However, the HO is NOT getting his money back!

Best put this one down to history, as I seem to recall that in some states that if he complains he can have three times the fee refunded, and you know whose pocket that comes out of!!!

But I think everyone's worked it out - surcharges aren't possible, but discounts are, and the feelgood factor for the customer of seeing a discount on the bill for cash is a winner every time...

Oddly, my country of residence allows credit card surcharges, so you often see the term "convenience fee". For example, if you pay your phone bil by credit card, Telecom (http://www.telecom.co.nz) say

From 1 November 2006 using this option for one-off payments of Telecom accounts will incur a fee referred to as a convenience fee which is charged by each credit or charge card processing service provider and will appear as a separate transaction on your credit or charge card statement.

This Convenience Fee will be a percentage of the total amount paid and differ depending on the card you use:

Fee Structure:
Visa and MasterCard - 3%
American Express - 2%
Diners Club - 2%

Telecom will not receive any part of this additional fee, but will advise you the fee will apply at the time of each one-off payment.

But in face-to-face retail, no-one has the cajones to try it with the customer - yet.

[Greg Swartz]

Hmmm.... It's not a surcharge... It's a convenience fee!!!

I like it! I think I'll try that one... unless that's prohibited too.

Otherwise, I'll just mark my material up more! One way or another, I'm not paying for it.