Pro's and Con's of taking credit cards? - Contractor Talk - Professional Construction and Remodeling Forum

Thewoodman · 10-05-2009, 07:54 AM

I have managed to go 7 years without taking credit cards. I have a hard time giving away my hard earned money to a bank that does next to nothing to earn it.

But it seems that this year I am having more request to take credit cards.
I have not lost any jobs because I could not take them. But I wonder if being setup to take them and advertising that fact would land more work?

What have your experiences been with this subject.

Mark

Framer53 · 10-05-2009, 10:01 AM

Quote:

Originally Posted by Thewoodman

I have managed to go 7 years without taking credit cards. I have a hard time giving away my hard earned money to a bank that does next to nothing to earn it.

But it seems that this year I am having more request to take credit cards.
I have not lost any jobs because I could not take them. But I wonder if being setup to take them and advertising that fact would land more work?

What have your experiences been with this subject.

Mark

Are you 100% positive you haven't lost work because you don't take?
At the least, set up a paypall account and take them. You never know, people will pay more if you take a CC. Look at the model of Sears. They have credit, and if you need a H2O heater, it is easy to call and get them right out there to install. Most people then just figure out what size and whether to buy the good, better, or best! Please note, they don't call someone else for a bid.

neolitic · 10-05-2009, 10:35 AM

I don't know about home improvements,
but in retail the customer can protest
the charges and the CC company can
take the money back after the fact.
Certainly worth exploring current laws.

mnjconstruction · 10-05-2009, 01:30 PM

I've been in buisness for 15 years and have never taken credit cards. Guess im just a little old fashion. I take check or cash thats it. And I probley lost a little buisness along the way but not enough for me to consider the cards. But in these changing times I guess its good to change along with it. But not for me!! I like things as simple as I can get them!!!

carolinahandyma · 10-05-2009, 01:45 PM

Have you considered using online services where you can email an invoice that your customer pays online with a credit card as an option?

These online services typically charge you 2-3% of the total as a credit card processing fee, but you don’t have monthly recurring fees or equipment to purchase. The money is typically transferred to your account in a day or two. The processing fee can be absorbed by you or added to the customer’s bill as a credit card convenience fee. Websites like www.paypal.com and www.google.com/checkout are two good examples of these services. You could also add the 2-3% credit card processing fee to all invoices and then offer customers a 2-3% discount if they pay with cash or check.

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SLSTech · 10-05-2009, 03:37 PM

For the CC fees portion I split my Handyman rates up. I have a reduced rate (old regular rate) for those paying at the end of the job & then the "new regular" rate for delayed payments, financing, Credit Cards, etc... No money lost & the bulk of my customers don't have to subsidize those using CC's

I have not had a lot of interest in using them, except for those that live out of state & need work done on a rental, etc...

On the Construction side - no intrest shown yet

I went with Paypal for mine, no monthly fees, minimums, etc...

Ohmy · 10-06-2009, 12:22 PM

It depends on what type of work you do. If your running service calls or doing small jobs, I think taking credit cards is a must. If you 50K and up projects, I don't think credit cards are that necessary. Our business is service and repair and 1/2 our payments are credit cards.

Obviously, we don't like taking credit cards but convenience is a major factor in our industry. I use my credit card everyday, so it would make sense that our customers would do the same.

brm1109 · 10-07-2009, 05:59 PM

I prefer not to take them but in a service business I think that you almost have to. I have had several customers that after the quote, the first question is "do you take credit cards".
The only card I don't take is AMEX (too higher fees).
If you are going to take them, go online and find a processing company with decent fees. I found one that was less than my bank.

curapa · 10-07-2009, 06:11 PM

Accepting cards will most likely earn yourself new business. The new business earned will more than likely cover the cost of accepting cards plus some.

Gatell Plumbing · 10-07-2009, 06:27 PM

123

Gatell Plumbing · 10-07-2009, 06:35 PM

123

rselectric1 · 10-07-2009, 08:29 PM

Great thread and great answers!

In working high end or any high ticket work, you need to be careful if you accept credit cards.
A company I was working with advertised credit card acceptance, and had several large transactions put through as progress payments. The reason the clients did this was to earn rewards bonuses.

Guess who pays for these bonuses! The merchant does.

There are different rates charged for every type of card, and every type of transaction. You can not tell by looking at the card what category it falls under. You get to find that out when you get your statement, and at that point the damage is already done. (up to 5% if it is a corporate card, that is not swiped, etc.) On a $12,000 progress payment, that can add up!

The company had an idea to add a pro-rata processing fee, but were told that this was illegal.

Any other experiences by you guys would interest me greatly. I am now considering adding credit card acceptance for a myriad of reasons, but am a little leary.

bonz · 10-07-2009, 10:06 PM

We are just starting to take credit cards.

We have already had 1 customer that didn't have the cash for a necessary leaking porch repair. But, since we offered a credit card payment option, they elected to, not only repair the leak, but repair the wall damage and replace the flooring

We also have a customer that is 90 days behind on their final payment for work already completed. We suggested they use a credit card to avoid any lawsuits/leins. Problem solved...

In this economy, I see alot more customers preferring to pay by credit card. They also receive added protection and piece-of-mind by using a credit card.

Greg

neolitic · 10-07-2009, 10:52 PM

Quote:

Originally Posted by bonz

......
In this economy, I see alot more customers preferring to pay by credit card. They also receive added protection and piece-of-mind by using a credit card.
Greg

They get protection from you.
Seriously, on most purchases they
can protest/deny the transacton
after the fact.

rselectric1 · 10-07-2009, 11:06 PM

Neo-That's true and a little scary too.
I do quality work, but lets just say that a client wanted to save a couple bucks and decided to put in a dispute. Who might decide if the complaint is valid...the credit card suits?

Wow

SalesMGR1011 · 10-16-2009, 02:00 PM

I'l chime in here as well. I think its a must do. Our compnay has for quite some time and process quite a bit. It can be scary when reading into the details and small print and fees and such. I started a compnay a while ago that does merchant services as you speak of. I know all the ways to make sure your paying the cheapest rates out there and there all kinds of inexpensive ways to take credit cards including directly on your phone. every single merchant service provider all buy from visa and mastercard at the same rate it's just how much they choose to mark it up. If anyone wants any help in regards to if their paying a fair rate or any other questions just ask away and i would be glad to help.

jcalvin · 10-16-2009, 02:09 PM

Can they still argue the fees if they sign a bill/agreement to pay with cc?

SalesMGR1011 · 10-16-2009, 03:17 PM

That would depend what they argue

codaman · 10-24-2009, 07:19 AM

Woodman, I thought the same as you two years ago so I set up a merchant account and advertised that I accepted credit cards. It did not attract any potential customers for me, and the customers I offered the service to who used it did so only for the points they could earn on their Amex. This was great for them, but it cost me 4% of each transaction (think deposit for work, first phase complete etc.). Despite what these merchant accounts offer, by the time all the nonsense fees were applied, my cost was 4%. I thought about adding the additional cost on top of the job, but it isn't fair to the customer and it is against the law to charge a customer more for using a credit card. So after two years of this, and paying the monthly charge, I called to cancel the account. When I joined I was assured there was no charge to cancel, but they debited my account for a $400 "processing fee". Luckily, I saw this immediately and had my bank stop any payment to them, I have not heard anything from them since. For me, the reward was definitely not worth the cost. I hope this helps.

Codaman

abacab · 10-24-2009, 08:18 AM

American Express is a bunch of thieving scumbags. I'm so happy that more and more places are not accepting American Express, and if you do, you should join the bandwagon and put these people out of business (of course then they'll get a bailout from our equally inept government) That is so typical for these companies to try and charge you fees that you never signed up for. They try and charge you for anything hoping you don't complain. When they get caught red handed they reverse the charges without comment. They all should be thrown in jail.