Credit Cards – Are They Right for You?

Credit cards are a fact of life.  It used to be that only big chain stores offered credit.  Now it is available to businesses of all sizes.  Have you thought of offering credit card sales?  It actually is quite easy and straight forward.  Let’s take a look at credit cards and the small business.

Credit cards and the small vendor

When I first started my small farm business I resisted taking credit cards.  It thought it would be a hassle and difficult to process.  I was also concerned how it would affect my customers.  After attending a few shows where others were taking credit, and a little research, I signed up through Costco Canada.  They required some personal, business, and financial information.  This enabled the company to deposit credit card transactions to my bank.  It was easy to set up and had a very low percentage charge on the transactions.  I used this system for over ten years.

A simple credit card system

My system was simple and connected over the phone line.  It could take credit and debit cards.  I had a terminal in my shop and could swipe or enter the card as needed.  While there were a lot of options, and a manual, the sales were straight forward.  I had to use the manual if I was issuing a refund.  At the end of the day the machine would automatically batch and send in all of the transactions for the day.  It is very easy to use.

When away from the phone at shows I could use an old fashioned imprint machine and therefore only take credit cards.  When I got home from the show it only took a few minutes to enter the numbers and amounts through my merchant terminal. I was surprised by the impact offering credit card sales had on my business.

Impact of taking a credit card

Taking credit cards increased my sales by about 50%.  People did not have to use their cash to make the purchase.  It allowed people to make larger purchases.  This gave them more options on how to purchase my products.  It also made it easier for me to upsell to my customers.

In rural locations the fact that I took credit cards, and most other vendors did not, had a positive impact for both me and the other vendors.  Often people would come to the show with a limited amount of cash.  They would then try to buy items that would be within their budget.  On many occasions they were delighted to use a credit card with me and take their cash to another booth.  It expanded their budget.  I made a sale and the cash went to another vendor so they made a sale as well.

Credit card ethics

Only once did I have doubts about taking a person’s credit card.  As they were searching through their wallet they commented about whether there was room on this or that card’s balance.  As I thought about it, how someone arranges their finances is not my responsibility.  Just because the first two cards they produced were maxed out did not mean they shouldn’t find the third card and make a purchase.

For various reasons people may have several low limit credit cards as they are seeking to re-establish their credit ratings.  Or they may have made major budgeted purchases on the other cards but have not yet paid off the balances.  As a vendor it is not your moral or otherwise responsibility to evaluate a customer’s purchase, nor their method of offering you payment.

New payment options

With cell phones and Wi-Fi connections you have more options.

You can register for a PayPal account.  If your customer has a phone and the internet they can send you the money through PayPal.  If you have a phone as well you can send them an invoice and they can approve payment all in real time.  This option does require internet access by the customer.

Again with phones and internet you can also do an e-transfer from the customer to you.  You arrange for the customer to send you money via email or text.  Determine the key word before you do the transaction.  It may take some time for the banking system to send, receive, and confirm the transfer.  But it is an option.

You can purchase a card reader that attaches to your cell phone.  Make sure it is for your country and currency.  Square reader is one card reading option.  They will send you a free reader in the mail (at the time of this post) and charge you 2.65% per transaction.  If you can swipe the card, even when out of cell service, when the transaction is processed later you are charged the same rate.  If you did phone or mail in orders, they do have a higher rate when you enter the credit card number manually.  You will have to provide some banking information and personal identification in order to receive your deposits.

Credit cards and the fine print

You have to read your agreement with your provider.  They agree to process your transactions but they also have requirements for you.  Check the credit card.  Does the name match the person?  If in doubt, ask for identification.  If you are entering the data later, ask for a phone number just in case you can’t read your own writing.  Make sure you have your own sales receipt to match the charge on the credit card.  It supports your story about what you sold and to whom.

Like I said above, I’ve taken credit and debit for over a decade and not had a problem.  I know that others have had challenges.  So read your agreement to understand what you are responsible for especially in terms of records and protection of identity information.  As an example the Square Reader has 31 different industries that you cannot use their reader for.

Credit and debit cards are a great way to facilitate economic transactions.  They are available to the small business and even the part-time craft vendor.  They will help you grow your business and increase your reputation with your customers.  You have to make your own decision but credit cards are definitely an option worth considering.

Turning For Profit

Thank you for reading this article.  It was suggested in a post comment by Leigh Stevens from England.  Thanks Leigh for the suggestion.  If you have any questions about turning, or the business of turning, please leave me a comment at the bottom of the page.

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