The type of clients I work for now seem to prefer checks.  Almost all of them have staff including bookkeepers that wire checks or property/project managers that submit invoices to check paying services.  Most have multiple homes & keep separate accounts for managing and maintaining each property.

It means I rarely walk out of a job with a check in hand, but one shows up in a week or two and so far in 8 years I've never been stiffed and only had slow pays a couple times for relatively small amounts.

In my case, I often don't see the client regularly and they're seldom around when I'm doing work.  It would be difficult (and probably annoying to the client) if I pulled out my iPhone and Square reader and asked for a credit card and signature.

I know you can manually enter a card number in Square (this is what I used to do in Quickbooks when I accepted cards) but then you're paying an even higher rate.

I don't think there is a right or wrong answer about accepting credit cards.  If you're target customer wants or needs to use a credit card for payment, then you need to accept them.

Note that what you are doing, is illegal in your state, and you are setting yourself up for a lawsuit.

If your original contract specifies a discount for cash, that is fine. But adding a percentage fee for paying with a credit card, is in violation of your state laws. Your profile specifies Boston, and Massachusetts is one of ten states with such a law. I'd suggest you change your contract, before you get caught.

Here's a link with a brief explanation of the law.

[Link: creditcards.com]

Note also that even if you operate in another state, or charge a percentage based convenience fee, you may be liable to a lawsuit if you charge more for a credit card transaction. Most credit card processors have you sign a contract, or you accepted one when you signed up for a service like square. A normal part of that, is that you may not charge a percentage based convenience fee for credit card transactions. Before charging such a fee, I suggest knowing your states laws, and understanding any credit card processing contracts you have agreed to.

Thanks for the info, but it's still not needed, at least for us. We don't have a card reader or use square, but we call our business bank with the CC info and they will run the CC purchase. So in reality, we are free and clear because the "bank" is issuing the surcharge, not us.

Even if we didn't use our bank for this and used square or the like, it would still be looked at as a convenience fee because it is an alternative method to payment.

Question for you though, why is it that gas stations can advertise a low price per gallon on their big neon signs and after purchasing gas with a CC, you find it's a higher price? Food for thought (and yes, this is in Mass.)

I understand wanting to take CC for small service calls as it eliminates the need to invoice the customer so the fee is worth it. On large dollar amounts the math doesn’t work. If a business earns 10% profit (according to CEDIA benchmarking most earn less then that) and takes a CC that charges them a 3% fee, they have lost 30% of their profit. Add to that the fact that the CC company may hold the money so you are unable to pay the manufacture and have to pay the late fee of 1.5 %, you are now down 40+% of your profit. Then you have the risk of some DB hitting you with a chargeback for thousands (or tens of thousands) that comes strait out of profit or having to hire a lawyer to fight it. No thanks, check please.

bcf1963,

I'm sure glad we have you here, we sure as hell wouldn't know how to run a Custom Install business without your constant advice.

Keep up your great criticisms, we all can learn everything we need to know just from you!

:)

It's clear you never went to my link. Otherwise you would understand why you aren't necessarily off the hook, and how the gas stations do it.

Glad to see you realize that if someone is not a CI, they can still understand what you do!

It's a matter of picking the battles. If the sale only makes 10% profit, it's within the business' right to decline plastic and request some other method of payment. It makes no sense to pay 3% on those sales, but compared to some card services, it's not that far out of line and if someone has a B&M operation, they usually have a product mix that makes more than 10%. If the merchant negotiates, they can have a sliding scale, too. I know of a guitar shop that used the old Zon card reader and switched to the Square Stand (it's a stand for an iPad with a card swipe that connects to their network, cash drawer and printer)- they make all kinds of small sales, but they also sell guitars that go for several thousand dollars.

If the business owner will do a lot of business with cards, they just need to charge a little more for the items that they sell the most of.

You’re right, I don’t think anyone could run a B&M operation or hybrid retail/custom shop without taking CC. They may get some large payments but I would guess that they also get a large number of small sales. It all depends on business model. I prefer to just offer a lower price up front and not take cards. Never lost a job once it is explained to clients.

You mean, they haven't walked when you said "I charge less because I don't take plastic? Who would walk away from a discount?

There's not a single one of us who should have to offer a discount to make a sale. We're The Few, The Proud, WE'RE CI, dammit! We didn't give up when the Germans bombed Pearl Harbor, did we? NO! C'MON! Who's with me?

That's exactly what I do. First I qualify like crazy, I talk to the significant other, and I bring the kids in. Find the "Hot Buttons". I sell differently to different people. This is over generalisation but to the dude I sell the toys, to the wife I sell the "Experience" and how it will feel to use the system, to the kids I sell the trends. Once you have the wife on board you are laughing. Kids? Even better. Guys want to spend the money, but in a lot of cases there is resistance from other stakeholders. No one wants to disappoint their kids so get them excited and everything comes together. Plus by getting everyone's input you look like you really do WANT to give them system that best suits their needs.

Then I make three systems. Each of them suits the customers needs and mine. The bottom system is meant to just to hit the lower end of the price point and is usually missing a few of the less important hot buttons. The system in the middle hits every need. The top option adds flare and improvements in quality and design.

Everyone gets what they need and I get referrals.

Confidence (not to be confused with cockiness) sells. Knowing your product sells. Create a need by painting a mental picture. And never be afraid to sell from the top. As someone else pointed pointed out it's easier to go down and no one ever asks for the most high end thing you can get. Well not of me any way.

All that being said, some customers are A holes and you can't change that. To that I say just keep swimming...

Craig

I'm so glad I'm out of the game now. In my current state of mind I wouldn't last 5 minutes. Granted I still consult and cherry pick when the itch hits. Start up manufacturing is so much less stressful. (Robotics kinds sorta)

The hardest thing I had to do is choose a software to run the operations. SAP was an easy choice. It's refreshing to set sound rules and just say take it or leave it.