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Credit card processing fees

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jpsamuel06

New Member
So we just got a new credit card terminal for the shop, and although I'm not the owner so it's not up to me but I don't really agree with the way we handle payment, and want to know how other sign shops handle this

New terminal charges a fee of 3.75%.. So it's kind of an incentive for customers to pay with cash. But here's the thing... No cash drawer. Or any change for that matter. So if the customer don't have the exact amount, they have to use their card or we lower the price a little. Like.. Total is 130 and they have 20's.. We drop the price to 120.

Aside from not having cash, how can he charge the customer that fee? They get their bill and next thing you know they have to pay a different amount? Not cool. And more often than not.. I'm the one scanning their card. What am I missing here?
 
2B

2B

Active Member
a couple of points,

  1. you are overpaying for CC processing
    1. change to the SQUARE reader, it is 2.75% swiped
    2. we use Intuit which is synced with QB and we pay 1.85%
  2. depending on your state laws you can charge more for CC processing
    1. correct most people do NOT like paying more to use a card but will do it for convenience.
    2. if you do not want to charge more than raise your rate and then offer a "cash" discount
  3. tell the customer ahead of time of the amount due and ask them to bring a check as a form of payment.
  4. GET A CASH BOX
    1. we keep 100 in 1s, 5s, and 10s with plenty of coins in. when the till goes over 100 it is pulled out and deposited to the bank
 
ams

ams

New Member
Very high processing fee and bad sense of business. Either you he is cheating the customer or you are losing on money. I would quit and go somewhere else, all of the anger is going to fall back on you if you are taking the payments.
 
Christian @ 2CT Media

Christian @ 2CT Media

Active Member
ams said:
Very high processing fee and bad sense of business. Either you he is cheating the customer or you are losing on money. I would quit and go somewhere else, all of the anger is going to fall back on you if you are taking the payments.
Click to expand...

How is charging a fee "Cheating the customer". Credit cards are a convenience and most conveniences in this world carry a cost, so again how is it cheating?

I would tell your boss that the rate you are paying is way to high, square is a quick solution to reduce it by 1 point if swiping, or you can negotiate with most merchant processors to get it in the low 2s.

As for how to handle it, 2B gave you great methods that we also employ.
 
F

fresh

New Member
we don't have a cash drawer per say, but we do usually have cash on hand. and if we don't have the right change, we can always go to the quikie mart next door and get change.

and yeah, that is an insanely high % for processing.
 
Solventinkjet

Solventinkjet

DIY Printer Fixing Guide
You are getting robbed at 3.75%. If I started a business tomorrow, had no business history or credit, and did only $100 in sales per month I could still get a rate of about 2%.

Having no cash drawer is a big no no as well. Who doesn't take cash!? It's literally the best form of payment with no fees or fuss! Get a cash drawer for like $25 or $100 for a more secure one.

You should already be taking into account the fees associated with credit card pricing in your pricing structure. Most customers don't like seeing it as a line item so just include it in the overall pricing.
 
R

rossmosh

New Member
Every 2-3 years we look over our credit card situation to see if we should change. I can categorically tell you the rates being thrown out here are incomplete. Credit card processing companies LOVE to post "rates as low as 1.75%!" and the reality is, it only is valid for debit/credit cards with no rewards attached. Rewards? Add 1%. Then there are the fees. Every card has fees whether it's the $.29 processing fee or the monthly/yearly fee to have their services.

The reality is, your business should have a cash draw with a few hundred bucks. Also, you should shop to see if any other better options are available to lower your CC rates closer to 3% on average.
 
S

shoresigns

New Member
No customer is going to be happy about paying a 3.75% fee on top of their invoice for using their credit card. Instead, add 3.75% to your quotes and then offer customers who pay cash a 3.75% discount. Who doesn't love a discount? Both approaches are effectively the same, financially speaking, but one pisses off the client and the other makes them happy. That's a good way to explain it to your boss.
 
T

TimToad

Active Member
Aside from just the bad taste and lack of tact in overtly adding the processing fee into the invoice at the point of the payment transaction, I gotta wonder about a shop and its employees who can't be trusted with a petty cash box.

So if I order a sign from your shop via email or the phone and the price is $1,000 and if I come in to pick it up and pay for it with cash or check, its still $1,000. But if i walk in with a credit card, that same exact sign is now suddenly $1,037.50?
 
A

AF

New Member
TimToad said:
Aside from just the bad taste and lack of tact in overtly adding the processing fee into the invoice at the point of the payment transaction, I gotta wonder about a shop and its employees who can't be trusted with a petty cash box.

So if I order a sign from your shop via email or the phone and the price is $1,000 and if I come in to pick it up and pay for it with cash or check, its still $1,000. But if i walk in with a credit card, that same exact sign is now suddenly $1,037.50?
Click to expand...

The above scenario is very common in many industries. The surcharge for a CC should be posted at the POS and included on any purchase contracts so the customer knows before pulling the trigger.
 
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