Customers Wanting To Pay With A Credit Cards

tzzzz216

Just trying to get some feed back on who takes credit cards as form of payment, I've been ask by customers why i wont take a credit cards and always getting calls from credit card companies to buy or lease one of their machines to be able to accept them.
I dont know if anyone knows this our not its going to cost you the business owner to accept them something like 4% plus other fees in banks charges, yes you may pick up more business but then you'll have to raise your rates to cover it,Thanks in advance.

Try to send these jobs over seas

Pearce Services

I looked into Credit Cards. I will at some point start to take them. I am fortunate to not have lost business by not offering the service.

I was Quoted around 2.1%. Do you have a Costco in your area? They have a decent program for their Small business services.

If you are a plumber for new construction and upgrades, I think I would avoid the credit cards, you'll just be paying for the general contractors next vacation or something. If your business is mostly service based, you will have an easier time getting paid upon completion if you do take the cards.

If you raise your rates to cover the cost, you'll ultimately make more money, and the credibility that you will get for taking the cards may allow you to charge even more.

One negative on the cards- If a customer disputes a bill, the account that you link to the credit card will have a freeze on that dollar amount for up to 3 months awaiting disposition.

(Tzzzz216 Happy New Year to you too!)

AAPaint

Not if it's from my bank....heh. I can dispute a charge and have my money back within minutes.

I still don't accept credit cards, and it hasn't affected my business so far as I can tell. I've only been asked about it a couple times, and when people hear how much it actually costs for me to accept them, they understand why I don't. Maybe in time I'll start to accept them, but it's not on the books for the near future....

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-AAPaint

AA Quality Painting & Pressure Washing LLC
Jacksonville Painters
Jacksonville, FL.

George Z

We accept Visa, Mastercard 1.69% from Moneris.
The increase in business has been noticeable. You don't know
what you are missing until you use them.
People do way more work than usual. You can get paid
over the phone if customer is not there by the end of the job.
Collecting deposits is easier.
What about skipping the trip to the bank? That's worth something.
At the same time you offer a convenience to customers, air miles,
and get the occasional extra job because of that
All that for about $55 for an average $3,000 job
which is a very small overhead add on.

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Brian

I've accepted credit cards for about 10 years. It has definitely made a difference in getting some jobs. Exactly how many is hard to say. About half of our customers now pay by credit card.

As George Z says, it is a convenience for the customer and allows us to get paid much quicker sometimes. We can close a deal via FAX-- they sign the contract and FAX it back with their credit card info. None of that "the check's in the mail" stuff.

As with every other other business expense, it should be build into you price. As George Z also points out, this is about $55 for a $3K job. Consumers will pay more for additional convenience.

Brian Phillips

Flimmer

Have a line on your estimate that states the total is a discount, based on cash or check payments only. If the customer uses a credit card there is a 4% increase per payment, this way you offer it as an option. Some people will have no problem with this, because, as like Goerge said some are crazy about air miles.

Flimmer

tzzzz216

Thanks guys alot of good feed back!

firemike

George Z is correct - many customers like the convienience of using a credit card, along with the air miles or other incentives being offered. It also gives your company a more professional appearance.

When I started accepting cresdit cards last year, I did notice an
increase in the amount customers spend. I do most smaller jobs and service work, usually only a few hundred to a few thousand dollars. But on some when I do the first and job and they find out I take credit cards, they usually want more work done because they can put it on the card.

On some proposals, my accepting credit cards was the determining factor on proceeding with the project. Had I not taken them, they were going to wait to do the work until they had the cash. As Brian said, you can take deposits by FAX or over the phone, or payments by phone, and the money is in the account in a couple days. Some mentioned that the customer can always dispute a charge. While true, I for one make sure the customer is satisfied with the work before asking for final payment, just so there isn't a problem. If there is a concern, I take care of it right then and there.

I have several commercial customers that love using credit cards, it makes their accounting process much simpler, and I get paid quicker. They can pay anytime with a credit card, but for a check they have to submit paperwork to the home office and some only cut checks twice a month.

I like Flimmers idea about the price differential for using credit cards, sounds like something that should be looked into.

In my opinion, and at least for me in my business and market, it is well worth the added costs. Mine I think it is $25/month plus 2.6% plus a small transaction fee of 45 cents or something like that. Plus I can take my machine with me and scan the credit card right at the job. Most homeowners will usually allow me to plug into their phone jack to complete the transaction. If they won't, or a phone line is not available, the machine will capture the information for later download. The only drawback with this is you won't get an approval or denial until you get to a phone line. But it is the same risk you are taking when you accept a check from them.

Good luck in whichever way you decide to go!

Mike Finley

Wow, lots of good points and information posted on this subject.

Glad to see some guys are tracking their stuff well enough to be able to make calculated responses in response to this subject.

tzzzz216

Thanks again all who replied to all of my posting, what a great web site !!


Try to send thses jobs over seas!

AAPaint

Believe me, I'm not knockin' it! I will eventually accept them, but the first rates I was hearing were double what you're getting. Shoot....$55 is less than I spend running around dealing with a check anyway.

__________________
-AAPaint

AA Quality Painting & Pressure Washing LLC
Jacksonville Painters
Jacksonville, FL.

paroofer

We accept cc's and about half the people use them. One cc company told us it is illegal to offer a "cash discount" because it is essentially the same as charging the consumer for credit card use-a big no-no they say. So, I don't know if this is true or not, but we don't have anything in writing about cash discounts. We will give them if someone asks for it......it's called a "neighborhood or scheduling discount" !

MinConst

Charging a fee for credit card use is against the Visa MC rules. I have never heard of a rule for a cash discount. It would be a gray area that might not be worth using if you do allot of business. Visa/MC can make your life miserable. Why take the chance for a few bucks.

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Grumpy

Though I see many people do it, I have heard this is illegal to charge a fee to use a credit card. Sure when you say you give a discount for paying by check/cash that's a loop hole but it's really a fine line I don't want to dance on, plus IMO it makes the contractor look less professional.

Mark it up to the bottom line and the customer pays the same regardless of their method of payment.

I accept credit cards because that's how people like to pay. I accept credit cards because I have lost business because at one point I didn't accept credit cards. If I win one job per year because I do accept credit cards, it's worth every penny.

On the flip side if your customer base isn't interested in credit cards, such as in the case of most new construction, then why bother? It's a business decision that will vary from each contractor's situation.

gutrman

Has or does anyone use paypal for taking credit cards? I found that you can use quickbooks with paypal to email invoices to customers and they pay using credit card, debit card, bank account... just by clicking a button on the email. You only pay the max 2.9% or min 1.9% + $.30.... no monthly or hidden fees. What do you guys think?

Cole

I havent used it but am curious how it goes if you decide to head in that direction.

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gutrman

I think we will begin later this month with it... I will keep you posted.

Flimmer

I guess some would call it a fee, but I don't see it that way. I have control over how I make a deal with my customers.(My Employers customers actually) I make deals with my customers all the time, for example: My customers will say to me is there any way to get your price down? Which in turn I may say I will take 500.00 off if you are willing to put a larger down payment, like lets say 50% and another 40% at completion of the foundation.
The same goes with my contract stating that I price my projects based on cash/check transactions. I have to wait for payment of a credit card and I charge more for that. You may be right about this being a loop hole but then again I don't make those decisions, yet. If this were my company(I will soon be faced with this decision) I would probably do a little more research of this.

Flimmer

sprinklerguy

If you get caught charging to use a visa...you will at the least lose your account w/ your merchant bank....could be worse I am told.

No matter how you word it..if it costs more to use their CC....that is charging for it....

That being said....I bought a 4 wheeler once and they charged me 2% because I was using my card......

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Tony Neumann
Lawn Sprinkler Repair and Irrigation Installation
Colorado Springs, Colorado
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MinConst

Where exactly is this button? I am running a test invoice and emailing it to myself and I see no PayPal button.

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Paul
Minichillo's Construction
Website
I will never leave you hanging!