Accepting credit cards for payment for services rendered

[Ax-man]

I've toyed with the idea of accepting credit cards for payment for the last couple years. I can get set up for this through our local bank for this and have explored the the up front costs for such a system.

Question I have is there any gain business wise to be able to accept credit cards compared to the more traditional forms of payment?

Any pros or cons on this would be appreciated.

 

[Stumper]

It does bring in a few jobs but ,personally, if I had it to do over again I would not do it. I don't know about your offer but my set up involved a 4 year contract and substancial monthly fees ( I knew it was a bad idea but somehow I signed anyway ). In addition I realize that accepting credit cards may prove "helpful" to some people but mostly I'm just helping people spend money that they don't have.

 

[SilverBlue]

It’s not worth it.
First of all you have to incorporate the cost into your work, which means more overhead, you pay, ultimately the customer pays through the nose.

A better idea is to work together with local business and make your own discount card, they don’t have to be related but get companies involved that would offer attractive merchandise. 10% off on pizza, car wash, eves trough cleaning, furniture repair, rug shampooing etc for example. Not only is this attractive to a customer, it also doubles as advertising within all companies involved. The cost to print a card is shared between those involved.

 

[jimmyq]

Consider getting an online account of sorts. I use Paypal and I am able to accept most cards via online payment. It costs lik3% plus 50 cents per transaction which I think is absorbable. Most of my customers don't use it, when they ask if I take cards I let them know about the online ability and most just say fine then, and cut a check after all. Customer would go to paypal.com, type in your account name (email address usually) and click apply payment and enter an amount, it is in your online account and you can withdraw it to your credit card of choice or to your bank account viia online transfer.

 

[Menchhofer]

I have been taking credit/debit cards for a few years, and yes I would recommend it.

The key to the whole issue is just be careful and shop around for the best deal on the rates/equipment. I currently pay no per monthly/equipment fees and we do not have the electronic option. Not needed, it is just another add on expense. The only charge is 2.5% of the bill which we can absorb with no problem. And tax deductible.

Alot of people pay with credit/debit only and they like the convenience/miles/paybacks. Still others prefer to pay with check. Different strokes for different folks.

I believe it may also add to our credibility as a business.

Another side benefit would be when you are selling personal or business items you can also say you accept charge cards which can make/break the transaction.

The idea w/regards to an online account seems an option also...

 

[Kram]

I've heard charge was pretty good, they charge you a small fee per transcation of about 35 cents and monthly service payment of about $24.

 

[Menchhofer]

Your fees will depend on WHO you receive the service.

Like I said, no monthly fees, no equipment fees, no rental fees, no up front fees. Anything else added is only profit for the salesman. Just the 2.5% per transaction. Does not seem too far out to me. Example...receiving 975.00 instead of 1,000.00. If the customer decided to accept my bid based on whether he/she could charge it or not, I figure I am one step ahead of someone who does not accept the cards.

Now if there is a change in fees or rates naturally I would re-consider...but for now it works...and it may not be for everyone.

 

[NickfromWI]

My dad owns/runs a home restoration business (www.servpro.com). Him and a few of his friends in the business got together and do the credit card all through one account. It was a good way to save money.

Just an idea.

The big question to ask yourself is how many jobs did you lose last year because you didn't take credit card?

Will the decision to accept credit cards make you more money?

love
nick

 

[John Paul Sanborn]

I've known a number of small buisness men who had it and hated it.

In my exepriance, most of the people who paid by card did it for the conviniance only; e.g. running out the door, they could call it in to the girl in the front office...

For 4 years I ran a 2 truck division for a lawn company branch in the milewaukee area, we did over 100k a year in pruning when we were not filling in on the spray and restoration stuff. Very few payments were made by card, even though I would push it because we got am A/R bonus for getting paid right away and I would not have to handel cahs or checks.

 

[NeTree]

I have the setup here, and definitely like it. Most of my customers pay by check or credit/debit card. Mostly credit/debit card as of late.

This holds especially true in the emergency/storm type situations, when people aren't expecting to have to pay for a big tree cleanup, and with the commercial accounts I handle.

 

[Koa Man]

I prefer payments made with those 1 5/8 X 6 1/8" sheets of paper with pictures of dead presidents the best.

 

[Ax-man]

Originally posted by Koa Man
I prefer payments made with those 1 5/8 X 6 1/8" sheets of paper with pictures of dead presidents the best.

I agree with your statement Koa Man, but I also have to disagree to a point of running a " cash business ". Cash is a double edge sword.

I found this out a long time ago when we made our first attempt at purchasing a home. The requirements for a home loan weren't as lax then as they are now. Being a self - employed arborist didn't help matters any either.

Lending institutions can only loan money based on tax returns when your self employed. This is true for both personal and business needs. Saying you make so much in cash, but the figures aren't on the tax returns is not going to get you any where when you need help for a really big purchase like a home or a new truck, chipper.

I also made the mistake of paying a guy cash. When I laid him off, guess where he goes, state unemployment office. I get audited of course, not a pleasant experience by no means. Not only do they stick a knife in your ribs they like to twist it to get every nickel they can. I'd hate to think what an IRS audit would be like.

Koa, Like I said I agree with you on cash payments, much easier business wise. Unfortunately, the real business world is making cash almost obsolete and a thing of the past, like a chain saw without a chain brake.

 

[Koa Man]

What I meant is that it is a very pleasant surprise when a customer pays you in cash. I would say 95% of my payments are made by check. I have no credit card acceptance at this time. In 20 years of business, I have only had one person ever ask me if I take credit cards. I am well aware of the importance of showing a good income. I purchased my 2nd home 11 years ago with 100% financing (realtor did not think I would get it) and got the loan approval for my Woodsman 18X in 15 minutes over the phone.

 

[Ax-man]

It is a pleasant surprise when customers do pay in cash, a refreshing change from the other side of the spectrum of stall tatics and check bouncing. There is always a few in the crowd that give you hard time when it comes to payment.

Funny how that home loan game works. We had a hard time the first time getting money, now that we almost got it paid off everyone wants us to take a second morgage because we owe so little on it, almost unheard of these days.

There are many in our area that do run on a cash only basis. Playing by the the rules is a much better way to do business in the long run, than would be trying to dodge the tax man. This is more the point I was trying to get across.

 

[Dan F]

I work for a landscaping company, and we started accepting a credit cards at work this year. So far, we have only used it for two jobs, but for one of them, it has allowed us to work with the client on when the payment would be made, etc... We wouldn't do that for just anybody, though, we know him well.

I think what we are charged is about 2.45% per transaction, I don't believe we pay anything for the equipment or a monthly fee.

If you think the credit card machines are expensive, you ought to check into John Deere Financing! That was our first option we checked into, and it was WAY more expensive on our end (and possibly on the clients end) than the credit card machine....

We haven't pushed the credit card acceptance much yet, but then again, we don't advertise much either.....


Dan

 

[Pgtree]

credit card acceptance is a tool that makes it more convienent to the consumer. Especially with the incentives offered by different cc companies, ie, air mileage.

It only cost me 2.5% of each transaction to offer it to my customers, and I bought the equipment used for 150. I have had a lot of people call to accept the bid i have given, contingent upon credit card acceptance.

I advertise it in my yellow pages ads, and my estimate sheets, not unlike offering a senior discount or veterans discount.

 

[Toddppm]

I've been accepting them for 3 or 4 years now and wouldn't be without it. Pay 3% and a per fee/ monthly $5 invoice. Don't do a ton with it but when they charge it's in the bank in 2 days without fail. I've gotten several jobs from people because we do accept them. I bought a refurbished terminal for $125.00 and don't need a printer, also no end of day reconcilliation, it's done automatically. Just punch in the number and wait for the money.

 

[rborist1]

:Eye:

 

[NeTree]

Originally posted by rborist1
IMHO it shows a professional business image too.

Given the credit requirements that must be met to get the merchant number and equipment, it certainly adds that and a legitimacy to one's business, as well.

 

[Ax-man]

Thanks for the replies, one more thing

What is the average amount charged by those who use credit cards and the type of tree work performed??

Also what age group or type of client would be inclined to use a credit card ??