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Ok guys how is the best way to not eat some of our hard work when a credit card or debit card is handed to us and the counter when we're getting paid. I love cash but I don't see it as much as I used to . I don't care for checks any more since I've been burned in the past. And now on my jobs that are hundred and some over a thousand this takes a bite out of my profit. How are you dealing with this and how are you explaining it to your customers so they don't get upset?

 

 

Thanks for the help

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I don't know what your exact fees are, but credit card is usually around 2-4%, while debit is usually less than 1%.

In Canada, these are the average costs for a $40 transaction:

Debit is $0.19 (0.5%), cash is $0.25 (0.6%) and credit card is $0.82 (2.1%). Yes cash has a per transaction cost higher then debit (counting cash multiple times, filing your deposits, money lost, give a penny etc)

 

From what I understand, the standard business solution to this problem is:

Raise your rates by an amount equal to your average credit card fees, for example say your fees average 3%.

Then offer a discount for payment with cash or debit, could be 2.5% or 3%.

Edited by bstewart
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I count on my shop supplies to pay the credit card fees. I changed processors in Nov. 2015 (chip reader) and fees increased. I raised my shop supplies and now my shop supplies charge per month is more than double what my fees are.

 

I don't recommend upcharging for the client's card use, nor recommend giving a discount for cash or check. Cards are the way business is done today. Don't muddy the waters and open yourself to questions and why this and why that.

 

Recently I had a day where my sales were almost $7000 and my cards were exactly what my sales were.

 

*** Remember the KISS method when dealing with your clients and their money (cards). ***

 

Also, when it's time to pay, the client wants to hand you their card, sign their card receipt, and get on with their day.

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As you shop around, be careful. Lots of crooks in this business. We tried Sam's Club vendor, First Data. It was a nightmare and
we went back to Chase Paymentech. Average about 2% discount rate.

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We average 2%. Figure it into your labor rate or parts markup. I only get worked up on it when I do my taxes and see the yearly cost to get paid. I get worked up because of my electric & phone bill too, how much to run some lights and talk on the phone??!!?

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I am a small shop and I treat my customers like family. I rarely have waiters, almost always drop offs, as that is what I encourage. I just explain that I don't accept checks and the payment options are Cash or Card. Then I inform them that the card processing company charges a fee and it will cost them a extra 4% if they choose that route.. I haven't had any problem with this and Most of my customers are repeat or referrals. It probably helps that even with the 4% they cant get a better price or quality job in this area. .. . . . Anyway I hope this helps

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I am a small shop and I treat my customers like family. I rarely have waiters, almost always drop offs, as that is what I encourage. I just explain that I don't accept checks and the payment options are Cash or Card. Then I inform them that the card processing company charges a fee and it will cost them a extra 4% if they choose that route.. I haven't had any problem with this and Most of my customers are repeat or referrals. It probably helps that even with the 4% they cant get a better price or quality job in this area. .. . . . Anyway I hope this helps

In some states it is illegal to charge a customer a fee for using a credit card.

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In every state its against your card processing agreement. If their card issuer gets a complaint from the customer, they can, and will, revoke your agreement. If this happens, itll be near impossible to find another processor. There is a blacklist for businesses in this industry. Ask my friend, Edward.... he's been through this...

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  • 2 months later...

Those fees really add up. I do everything with Wells Fargo. They make a lot of money off of me.... but it's still cheaper than Square, Paypal etc. 2.75% is too high. Get people to use their debit cards- fees are REALLY CHEAP for debit. Avoid over the phone payment if possible.... huge fee for that

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Those fees really add up. I do everything with Wells Fargo. They make a lot of money off of me.... but it's still cheaper than Square, Paypal etc. 2.75% is too high. Get people to use their debit cards- fees are REALLY CHEAP for debit. Avoid over the phone payment if possible.... huge fee for that

 

We started our shop with WF (and still have their machine due to contract) but they raise their fees every year. I also know some people who work in WF and said honestly, they are not good for small businesses. We switched to 360 payment solutions and fees on average are less than 2%...usually 1.5-1.9.

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