Getting rid of Credit Card Machine

[Philly vintage]

Has anyone ever thought about not accepting credit cards and only cash and checks?

I don't like having to pay the fees and I'm annoyed with problems I'm having with my credit card machine provider. There are restaurants next door to me that get along fine without credit cards but I was wondering if anyone with a gallery and frame shop didn't accept credit cards.

[stshof]

I think you'd be making a mistake. A restaurant purchase is twenty bucks; framing is considerably more and people don't carry a lot of cash. Also, a lot of my customers shop with their cards because they like to pay for their purchases once a month. Business owners do this, too! Oh, and there's also the impulse purchase that's a lot easier to make when you're not dipping into the "real" money! graemlins/kaffeetrinker_2.gif

[stshof]

BTW, I agree with your complaint. I have to keep reminding myself that's it's just a cost of doing business - like freight. I hate paying freight and try to keep my companies that deliver busy but sometimes you got to do it! graemlins/cry.gif graemlins/cry.gif

[Rock]

Would be a BIG mistake in our business if we quit taking them. Roughly 50% of our business is paid with credit cards. I hate the fees also, but unfortunaty it's becoming a credit card society. Plus it seems that people tend to spend more when using them. I'll gladly take their money. :D

Rock

[JPete]

It's part of doing business and we finally just raised all the prices a bit to cover that expense as well. We used to have people ask for a discount when paying cash becuase they knew about the fees. A catch 22.

[JFeig]

credit card fees are part of being in business......

As any business person who is up on their expenses, taking these charges into account in determining what to charge as a retail price is all part of the game.

[Mecianne]

Originally posted by JPete:
It's part of doing business and we finally just raised all the prices a bit to cover that expense as well. We used to have people ask for a discount when paying cash becuase they knew about the fees. A catch 22. Discount? Heck no. Not when I am only paying such a small amount to swipe the card. I hate our CC machine dealer. But luckily we have a local rep whom we fuss at when we get all kinds of add-on charges to our bill. This is a list of this months itemized charges: statement fee, maintenance fee, mid-qualified surcharge, mac sales, network transaction fee, interlink sales. These don't even include the discount fee. I mean--gee whiz.

Get rid of it? Heck no. The big sales are closed when the customer asks if we take plastic? The "yes" response from me seals the deal.

[Tommy P]

We fought not taking them for a couple of years.....told my partner we needed to be serious about being in business. Taking credit cards is being professionally serious about business.

Besides, I never like using the "No" word in business. And when you do not take plastic you have to use that word! graemlins/shrug.gif

It has helped with the bigger sales as others have said.

I could never go back to cash or check only. It is just a CODB!

[John Ranes II, CPF, GCF]

Originally posted by Philly vintage:
...There are restaurants next door to me that get along fine without credit cards...There are?

You wont't find me dining there!

John

[John Ranes II, CPF, GCF]

Originally posted by Mecianne:
...This is a list of this months itemized charges: statement fee, maintenance fee, mid-qualified surcharge, mac sales, network transaction fee, interlink sales. These don't even include the discount fee. I mean--gee whiz....Mecianne,

I see that you've recognized that these are simply part of the cost of doing business....and you know, they'll think of new charges and new names in the future. :D

The key business attack on these charges is to pull a full month or quarters receipts and calculate what your REAL net percentage is on accepting cards. Don't be comparing the intial % rate....examine and compare the bottom line, always.

John

[ERIC]

Many people have stopped writting paper checks - instead they use a checking account debit card (without the PIN).

How would you accomadate the the customer that has money in her checking account, but you can't take that card?

This is not like questioning the cost/need of the water cooler. This is more like the alarm monitoring fee each month, which is always money well spent.

Have you had a cost comparison done lately? Maybe you could change processors and save a few bucks.

[FramerRandy]

Thirty years ago I bought a frame shop from an old-timer (I guess I'm one now smile.gif ). He only accepted cash & checks.
The first thing I did was to accept credit cards. Business went up 25% instantly. I've always accepted (and complained) about them.
Today over 60% of my sales are paid for by plastic, most of the balance is by check, with an occasional cash customer. Had a cash customer today in fact smile.gif . In fact, most of my customers pay in full when ordering. I'm convinced that this is primarily because of the widespread use of plastic currency. graemlins/kaffeetrinker_2.gif

[Baer Charlton]

We have gone weeks without having to adjust the cash box or deposit a check. Well over 85% of our business is CC and we only take Visa & MC.

Amex charges are "usery" and I used to ride motorcycles for over 30 years so with me it's a philosophy/ethics thing...

Discover we rate with Sears revolving. :D

So if they don't accept it in Europe or Australia, neither do we. graemlins/thumbsup.gif

in 28 years we have gotten 1 bad check.

[dougj]

How about a nice shadow box ATM on the wall.(no glass of course)

[Dave]

People that aren't prepared to pay a deposit often save face by pulling out their plastic too.

Few notes on credit cards...

1.) Annually review your charges with your processor and shop around. As custom framers, our average ticket cost is relatively high which helps in bringing down rates. If you are experiencing growth, you may be able to get your rate lowered or at least not raised. Different providers have different criteria. Check with PPFA or any other associations you belong to also because they often will have good rates and you are also supporting the association.

2.) I no longer take Discover, but know from when I did that they will match your VISA/MC rates no questions asked. I could've lied within reason and they would have given me the rate.

3.) Stay on top of how long the processor or your bank sits on your money. There is no reason those funds should not be deposited within 2 business days and scream and holler or change processors or banks if they take longer. One processor/bank I used sometimes took 5 days to show the funds available.

4.) If so inclined, use your cards to full advantage. I would pay my vendors once a month with my credit cards before the due or discount date and rack up the miles. Some allowed a discount, some didn't. Some allowed terms and then payment by credit card. If you time your purchases and payments right you can use "vendor financing" and get up 30-60 days extra dating and miles to boot. A.G. Edwards CMA accounts would let you use a debit card which only came out on the third Tuesday of everymonth and they paid interest on your funds on deposit until that date. In effect, you received interest on money you already paid your suppliers with until the third Tues. of the month and then paid you miles on the purchase too! These type of accounts for a midsize business are very beneficial because they don't charge the high fees banks charge. I figured I saved about five-hundred dollars each month by depositing into our bank and doing a transfer to the CMA accounts then paying by credit card. Sounds complicated, but its not.
I would end up with several hundred thousand miles a year too.

4.) Unfortunately, we as business people foster the use of cards because it's just plain good business and by doing so contribute to the massive personal credit card debt problem.

5.) I am not an attorney, but I believe in most states it is legal to give a cash discount, but illegal to charge an additional fee if a customer uses a credit card. So if credit card sales are having a negative effect on your bottom line and you want to offset it, you must factor that into all sales or offer a cash discount.

Dave Makielski

[gemsmom]

I liked to make it as easy as possible for people to spend their money in my shop. They could use M/C, Visa, Discover, or AMEX.

I can't think of anyplace I shop where credit cards are not accepted.

[JRB]

You could also stop doing fitting. Just sell them the empty frame, glass, & mat, let them do their own fitting. Jobs would get out a whole lot faster. You and your customer would save time and money. No credit cards, no fitting, think about it, your job would be so darn much easier, and the money you would save.

I'll bet if you sit down and really think about it, there are lots of ways you could reduce your overall fees and costs of doing business.

How about electricity, now there is a great area you could save tons of money on. A little creativity, like having a button the customers could push when they come in the door. The button would be a timer that turns the lights on for say, fifteen minutes. This could also be tied into the sound system.

This is fun, anyone else have any great ideas to cut down on fees and operating costs?

John

[Maryann]

One impulse sale will take cover of the fees for that month and then some. Every impulse sale after that is gravy. And plastic does contribute to those type of sales. After all, it's not "real money" as I once had someone say to me. :rolleyes:

Make it as easy as possible for your customers to spend in your shop. If they only have enough in their checking account to cover groceries and gas money this week, how are they going to buy that K*****e on the wall? :eek:

I'm with John. I'd almost sooner have my electric turned off than get rid of the credit card machine.

[David N Waldmann]

Originally posted by Dave:
5.) I am not an attorney, but I believe in most states it is legal to give a cash discount, but illegal to charge an additional fee if a customer uses a credit card.I'm not an attorney either. It's the agreement you sign with the credit card processsor that prevents you from charging an additional fee. That's because they say you must treat cards the same as cash. Further interpretation of that (in my mind) would include the requirement of giving a "cash discount" for the use of a card if you offer one for cash.

[Ron Eggers]

Maybe 20 years ago I became extremely disillusioned with credit cards. I don't remember all the reasons any more, but discount rates used to be a lot higher, we had to call in (no electronic terminals) for authorizations over $50 and it took a while to get your account credited.

I actually went for about a year without accepting credit cards. It really upset some people and probably cost me more than a couple sales.

When I resigned, I set up for VISA, MasterCard, AMEX and Discover.

It's so easy now and so expected that I think your credibility, as well as your sales, would suffer severely if you didn't take plastic.

Personally, I use cash for purchases under about $10, a debit card for $10-$200 (and to get the cash from the ATM for those smaller purchases)and a credit card for purchases over about $200. I rarely carry a check book.

[wpfay]

Have taken Visa and M/C since Southeast Bank set them up in Florida. Accepted Discover for a short while...took way too long to settle, and way too much paperwork...worked out OK, never had anyone ask if I accepted it since.
Been off and on with Amexco. Went back to them when I had customers that wanted to pay with their Amex, but were reluctantly willing to use Visa. Saw the light when I started using Amex to pay for most of my business expenses. Membership rewards are good. Can't very well play that game without letting others play it here.

[ERIC]

Originally posted by JRB:
I'll bet if you sit down and really think about it, there are lots of ways you could reduce your overall fees and costs of doing business. How about your ISP/DSL connection? Oh, wait. Then I couldn't grumble. :(

[BILL WARD]

cc fees stink!!!!! BUT if I got rid of them I would eliminate almost all my sales(read that close the doors & go home)...I currently run almost 99% cc/checks....& probably 95% cc to 5% checks. When we do a cash sale we do the happy dance and wonder what to do with the green paper things!
w.w.

[Bob Carter]

I am amazed at some people saying they take as much as 50% of their biz non-credit.We don't do much more biz than most of you, but if we take two checks a week, that's a lot.

And, cash deposits? Someone that uses cash makes us want to ask for ID

One easy thing that many framers ignore (at least, when I give classes, most do not use)is a Debit option. I can't remember the transaction fee (does .50 sound right?), but compare a $200.00 sale with an average rate of 2% ($4.00). And we take a greater percentage of Debit all the time.

Greater portions of the public use cards as a vehicle for Rewards programs. I avoid businesses that do not accept AMEX and I am not alone

Anybody ever get much from their Rewards programs

[Sarah Winchester]

When I took over this business there was an old beautiful hand crank cash register here. I'd been here over a month before I had a cash sale, and I didn't know how to open it. Fortunately the previous owner's friend was here at the time and showed me how to open it.

[Emibub]

I was in a small mountain town last year doing some antique shopping. We stopped at a little cafe for a snack and then found out they did not take credit cards. Between two of us we had to dig through every pocket in our purses to come up with a measly $7 to pay the bill. I use my debit card probably 99% of the time. You would be cutting off your nose to spite your face to eliminate charge purchases. You don't want to become inconvenient for your customer.

[Rock]

I think location is a factor also on how much credit cards get used. In our small location of the world, we get about 50% credit cards but it's growing every year. We dropped discover a few years ago mainly because we hardly ever had anyone use one and the company was complaining because we didn't have enough people using it. So we said goodby to them. We may have had one or two people a year wanting to use AMEX but they paid with visa with no problem. The bottom line is a business has to take credit cards if they want to be in competition with the other guy. We own two business's and I can't imagine not taking plastic at either of them. Beleive it or not I have competitors within 20 miles of me who don't take them, which is fine with me. I love all kinds of payment as long as it's prompt ;)

[JRB]

David, I think what everyone is trying to tell you is that, although your idea sounds good, it is not such a hot one. Much like thinking after a particular nasty customer leaves, all those wonderful "I should have" thoughts we all have, yet knowing we never would.

John

[Dave]

My dad had a wonderful sense of humor...I remember shortly before he died a regular customer and friend came in and was paying cash for a purchase. My dad looked up at him with a startled expression and said:

"Cash? Hold on, I'll have to get out the instruction book." :D

Dave Makielski

[Philly vintage]

I appreciate the great responses and after reading all of them and weighing my options, I'm taking your advice and keeping my credit card machine.

But I'm still not accepting American Express.

[JRB]

Ya gotta take a stand somewhere. I didn't accept American Express for years, mainly because I think they are a sleazy low life company. I had a change of heart a few years ago and started accepting their cards. I had customers almost thank me for accepting their American Express card.

The only stand I am taking now is I refuse to carry that card myself. I take particular delight in shredding the countless application forms I receive in the mail.

John

[John Ranes II, CPF, GCF]

Originally posted by wpfay:
....I had customers that wanted to pay with their Amex, but were reluctantly willing to use Visa. Saw the light when I started using Amex to pay for most of my business expenses. Membership rewards are good. Can't very well play that game without letting others play it here. Perspective is valuable attribute!

John

[Frame Lady]

Hi All - I just got home from our Evergreen Picture Framers Guild meeting and we had a guest speaker from the bank talk to us about credit card processing and show us the new credit card machines. I thought I knew pretty much all there was to know about the system but she made me open my eyes! One new thing to look for is the mileage award card. If a customer is using a mileage award card either MC or Visa, we the merchant is being charged a slightly higher fee. I was shocked and said no way, I check my statement very carefully every month. Lucky for me I had brought a copy for her to look at and there buried in the middle was the fee.

Secondly she said Am Ex. charges the merchant about 3.5% and while we all know this is higher than Visa or MC, are you people who have Am Express really paying that kind of fee?

We also talked about fraud, chargebacks, key pads, interchange rates, the old knuckle buster slide the card over the paper machine (and why we all still need one of these)different types of cards, business versus personal, internet and mail order charges, batching everyday.

It was a real good meeting with lots of questions. It is amazing to listen to different theories. In our group we had one shop who still only deals in cash and checks to another shop just setting up with WiFI.

Anyhow, this is always part of business that should be reviewed at least quarterly so that no hidden charges appear.

Lynn

[David N Waldmann]

I don't know if we pay more for mileage type cards or not. I don't see that it makes any difference; I'm not going to do anything about it.

We pay about 2.98% (actual rate) for non-swiped AmEx. It usually takes them an extra day to deposit, and sometimes they combine two days' batches into one deposit which makes it harder to reconcile. But it makes my customers happy. And that makes me happy.

[Bob Carter]

Lynn makes a great point about differeing rates and if you look at your monthly statements, you will see about 6 or 7 different rates. Most of us get sucked in by the low, low rates offered from salespeople or ads.

Bottom line: compare your actual dollars deducted from your account to the actual dollars of credit card activity and that percentage is your real rate

We average just a little over 2% and it varies slightly (never under 2%, though).

I wonder if there is any other part of our business that if we spent as much time and effort, would generate a greater return?

If I was able to improve my credit card expense by 10%, would it alter my bottom line closer than the second decimal place to the right?

This is another prime example of not listening to our customers.

If I had customers wanting to use Carte Blanche, I would have it in 30 minutes programmed on my terminal (I may even have it)

[Grumbler F.K.A. Harry]

If you want to be in business today you have to take credit cards. It's that simple. You don't have to like the process or the fees, but the reality is it is how business gets done today. You wnat customers to shop with you, make it easy for them to do so.