Question on paying for repairs

Dad and I have been in the equipment repair business as independents for many years and have always done the billing and recievables "old school" meaning paperwork and getting paid by cash or check. There in lies my question what do you think about accepting credit cards. I know that there is often alot of anticredit card thinking and that is understandable when it"s someone getting in over their head, but what I"m talking about responsible, business card usage for a legitament need.
My thinking is that in these tough times if you can do a job for someone and get paid with a card your more likely to get work. I say this because I know there are times that an individual or company don"t have the capitol to pay for repairs in cash or in the bank but still need the work done on their machine to keep the business going. This would allow them to utilize a revenue source to pay you that wasn"t available to them before you accepted cards. Too we"ve been asked many times in years past, by large companies, if we took cards. Usually it was for jobs with a bill for $2000-$5000. Their reasoning was that it streamlined their billing process by putting all "small" purchases in one place.
Like I said I"m toying with the idea right now but haven"t made any decisions yet. Actually I "poked" a link the other night looking into it and have gotten numerous servicing companies but haven"t had alot of time to check out all that responded. The a few of them I have looked at so far have what look like pretty decent programs with what seem to be small initial/startup costs, as well as small percentages, in the 1 to 3% range, plus 10 to 15 cents, per charge. This doesn"t sound bad to me considering the ease and speed of getting paid, as well as the added flexibility for the customer.
So, the ultimate question, how likely would you be to get a badly needed repair done on a card, if that option was available???? Thanks for any responses or advice and tips, etc from those that already deal with accepting cards. Wayne

It might help you get more business. 3% of $5000 is $150. Your choice to eat it or up your prices a little bit.

We live on cards... By that I mean most of our parts come from away. A long way away, over the phone, etc. Cards are the only way many will even do business anymore.
Likewise, I'm on the board of a local coop. They switched all inhouse accounts to AGLine about 18 months ago... for the simple reason that they are paid that day instead of carrying them for 30+ days. Money now.... and AGLine can do the banking.
I don't entirely like that way of doing business, but I understand it.. and that's the way it is today.

I don't think you're going to pick up a lot of business because of a card. If they need you, they'll find a way to pay you anyway (if they intend to pay you). They can also draw cheques off their own Visa's... write them to themselves on deposit, then give you a cheque... so they don't NEED for you to accept the card. It's just easier if you do... and mabey in today's climate, better for you if you grab it today. Even if it is 3% less.

Rod

From the '90's thru about 2005, I would've advised to start accepting plastic. These days, it seems like it's too easy for a deadbeat to complain to the credit card company and get a charge reversed, any for the businessman to get a "chargeback." Then not only are you out the parts and labor, but you no longer have the piece of equipment on hand to enforce a mechanic's lien...because you "thought" you'd been paid.

Just another angle to consider.

In my lawn mower equipment dealership I don't think we could survive if we DIDN'T take credit cards. For the last few years I'd say 75% to 80% of our transactions are paid by credit card. While I'm sure SOME of our customers could find a different way to pay, I'm certain not ALL would, and I can't afford to lose the difference.
Our credit processing fees run about 1.75% plus 15 cents per transaction. In our business it averages out to just under 2% per transaction. With your expected average transaction amount you should be able to get as good a rate as ours, if not better. We take Mastercard, Visa and Discover but not American Express, as Am Ex still wants like 4% processing on their cards. I don't think I've ever lost a sale because we don't take American Express, the customers just use one of the other three.

Wayne,, many of the credit card companies give their cardholders a booklet of checkblanks that can be used in place of the plastic... For your part, these checks are treated as a common bank check,, with no extra cost to you... You could simply put up a small sign that states that you will gladly accept these checks.. Even one percent adds up! three percent is too much to give away..

About 98% of my business is conducted over the phone and paid by credit card. I've done this since 1994. I still take checks and MOs and of course cash, but the cards are how business is done these days. A friend of mine has a gun shop and he flat out refused to take cards, he nearly went bankrupt before his co-owner wife forced the issue. Now he never can keep guns or ammo in stock. People just don't carry cash anymore. Don't get too concerned about charge backs. The complainer must prove their case AND prove you did not act in good faith. If you do business fairly and honestly you have little to worry about.

I take cards and would probably be broke if I didn't. about 70% of my customers use credit cards. Usually Visa. I get paid every second day. So about 3 times a week. The small amount they take out is more than paid for by sales. Our credit card machine was broken down for about a week and our sales went down to about 40% of usual. Needless to say that won't happen again. Then we have lots of phone orders and they are all credit card so we have the money when we hang up phone. A for sure sale. I wouldn't consider doing business without taking them. We take at least 30,000 per month in credit cards so very important in our business.

My wife has a small service business. When she 1st started, she didn't do credit cards. After a few years, customers were actually getting angry that we didn't. We switched over to cards, and it has really helped the biz. I would say about 60% - 70% cards, 20% checks, the rest cash. When she 1st started, it was 50 / 50 cash and checks. As far as the corporate stuff, I know when I worked at GM, a PO was estimated to cost $250 to generate. They switched to corporate cards, and getting a PO written for under 5K became difficult. I think you will get customers that you wouldn't otherwise, a lot of folks ( including me ) pay almost everything with a card or electronically.

I would accept credit cards if I was you.

My wife ONLY uses CC, she carries no cash ever, she sometimes has a check with her.

I have a friend that never carries cash either, he only uses CC.

A credit card company should charge you 3% or so for the use of the transaction, but it is better then dealing with a bad check writer.

I used to accept CC for my remodeling business. I had done some work for one of the BIG anchor stores, and was told by my friend-the merchandise manager there-that if I did not accept CC I would wait over 6 months to be paid. I figured there would be other people who would use the service, no big deal. First, I had to buy all the equipment. Yes, you are charged a percentage, but you are NOT allowed to charge more to that customer, so you HAVE to eat it, or risk losing the privelege. Also, there is a minimum charge, and for me, it ended up costing WAY more than I could justify. So, it all depends on how much you will use it if it will pay off. I was very glad the day my contract ran out! Greg

Pay pal has a merchant account that can be used with web transactions but it also has a virtual terminal that is available over the internet.
The fees that are charged are also based on the type of verification that is used to process the transaction. ie card swiped, billing zip code, ccv code, etc.

Greg, We found out just like you did. We too were glad when it ran out. Not worth it unless you have lots of CC customers.

There is a machine shop in town that takes cash only. I will not deal with him just for this reason.
His thinking is checks can bounce and CC cost him extra money; and I can understand that. But the compitition takes CC so I do not really see his reasoning.

While my credit (Visa) card I use is really a Debit card; I use it all the time. I never have a check with me and very little cash.

I wonder if Debit cards have the same fees to the bussiness????????

IF your in the repair business, you darn near gotta accept CC. I would take Visa, MC, and Discover. Leave am express alone. You get charged a higher rate for debit cards, or any time you dont swipe the card (when you manually enter the numbers).

I don't take them at my shop ,,havn't for 20 yrs now . I used to , couple charge backs cured that . Now it 's cash or check only if they are fleet account or reg customer. I let them know payment policy upfront , No complaints .

NC Wayne: taking credit cards is nearly mandatory in today's society. You'd be hard pressed to find a car repair shop that doesn't take them, and your business isn't so much different than car repair that the same thing shouldn't hold for you as well. Studies have put the cost of writing a purchase order at around $1500 in large companies, by the time writing, approving, sending, paying, filing, etc. are figured in, which pushes many companies toward credit cards as a more economical alternative. Also note that while many cards have agreements prohibiting an extra charge for using the card, most do not have a similar prohibition on a "cash discount", which many merchants use as a workaround to the upcharge prohibition. Finally, note that there are many, many companies that do credit card servicing, and some are much better than others. Do some research first, and it's quite possible that whomever you do your regular banking with offers this service as well, which may be a good way to go.

It pushes off bill collecting to other people, you get your money.

The cost of that is about 3% or so to you.

As a person who always pays off my card every month, I tend to use my card where I can. It is not unusual for me to have 2-3 thousand doue each month. I write them a check for that.

I figure most places that take credit cards have raised their prices 3% to make up for the costs; so I will use the card there & get an intrest free loan for 20 days or so - my way of trying to get back a bit of that 3% more you will be charging me.

I don't know too much about it from your end of the transactions, but - it would seem to cost you a bit to get paid for things more timely....

--->Paul

I wouldnt consider not taking credit cards, for anything. For at least the past decade I've used paypal and paypal merchant accts as my method since I dont like to sign contracts with companies. I'll probably only sell 3-4 loads of hay a year on cc but those are 3-4 sales I wouldnt have otherwise.

You are right about raising the bill 3% but you can also give your customers a "Cash Discount" and not have to worry about collections.

On the other side of the counter, How in this day and age can you carry enough cash? Here in Missouri checks are bouncing like rubber balls every where. I hate that look they give you when you pull out your check book, not to mention all the I.D. and phone numbers you have to produce. I like Paul use my card for the farm and pay it responsibly. Also it gives me a double set of receipts for which I find necessary, as I never have all of them when I match my books to my card statement.

I would set up an account with your bank and use them - we do it with our moving business - Two Men And A Truck. Our customers must give us a CC number to schedule a move and if we think there might be a problem with gettng paid we pre-run the card - the amount can be corrected after the move is finished. Doing this had eliminated most of our bad check and other scam problems.

I use my cc card as a debit card. I buy everything during the month on the card. If a business does not take my card they dont get my business.

I am a manager for a credit card company, ( no this is not a commercial) and we see more and more cusotmers taking credit cards as part of thier business, but we get to learn the cusotmers business first, before we make a recommendation on what type of service to take, and if it makes economic sense to take cards. feel free to contact me, and I"ll be glad to help. we offer phone, Internet or terminal processing and can work with any local bank. I have solutions for chargebacks and others are correct you cannot charge to take a card, but CAN give a cash discount. good luck Joe B

around here we can no longer get any work orders from city or county gov repairs as well as VA without taking a credit card. Dad drug his feet for a couple of years but for the last few years we usually end up with more on CC than check or casah. Plus we haven't had a returned check since beginning to take em either. you pay a little percentage to the man, but so far so good for us. But I would stay away from Discover they are the highest % card there is.

Wayne probably a nessecity today. 1.read the aggrement, there are some bad ones. See your bank etc and get it tailered to your needs. There are some mobile devices that you can take to shows in the field etc. I agree on only M/C Visa. Talk to some of your customers and see what they say.