Thinking about taking credit/debit cards?

Discussion in 'Business Operations' started by Damian, Dec 22, 2006.

  1. Damian

    Damian LawnSite Member
    Posts: 242

    My elderly parents have been running their business for years, billing at the end of the month for services. They've never taken credit or debit cards. My mother does the accounting/billing by hand, refusing to use computers. They currently have @ 180 accounts. I've read a number of posts here and have talked to them about the possiblity of taking credit cards to make life easier for my mom.

    I know that there are a number of reasons to take them, with getting payment within a couple of days of billing one of the strongest ones, but are there negative reasons? Is there a mininum number of accounts needed to make it worthwhile? What are the best ways of using them?

    You can probably tell by my questions that I'm not even sure which questions I should be asking.
  2. Josh.S

    Josh.S LawnSite Bronze Member
    Posts: 1,085

    Well a lot of times you have to rent the machines if you want one in your truck... which cost money...

    Another thing is that my dealer told me when you charge a credit card, it cost 2%...

    So lets say you net 25% of gross.... then you accept credit cards you now net 23% of gross if all of the customers use them.

    I think that money biggest draw back, because a lot of larger LCO's are doing such low gross/net they would hate to knock 2% off the top unless they absolutely had to.

    My $.02

    - Josh
  3. LFalcon426

    LFalcon426 LawnSite Member
    Posts: 7

    We take credit cards, but I can honestly tell you that not too many people have wanted to use them unless it's a big job (new sod, landscaping, etc). Most of our customers like to cut a check each month or for each cut and be done with it. Paypal would be best because you don't have to rent a machine, you e-mail the invoice to the customer and they enter their payment.
  4. Team-Green L&L

    Team-Green L&L LawnSite Bronze Member
    Posts: 1,776

    Paypal is great and we use it, but they do take at least 2%. We pay 2.9%, but it is seldom used right now. The best thing is that we can demand payment because of our payment options (web, phone, all major cards, and echeck) all with Paypal.

    Watch your account though because they can and WILL freeze it when there's a lot of money in it (for up to 6 mos.). We transfer everything out at least once a week and leave $50 for there $19.99 monthly fee.
  5. Damian

    Damian LawnSite Member
    Posts: 242

    Losing that 2+% is my mother's greatest concern as well, I think. The lure of getting a number of customers to use it and greatly diminishing the almost daily worry that enough checks will come in is great as well. I had seen mentioned setting up a merchant account and then/or charging customers after every mow each week. I just know that there is a lot of stress and worry every year in the billing department...
  6. LawnTamer

    LawnTamer LawnSite Gold Member
    Posts: 3,988

    We accept credit cards, just started last year. For us it was a great move. We process them all online. We set it all up through Costco. Yes we lose 1.76% on each transaction, but here's where it comes back to us- We have tons of clients who were poor payers before, you know always late. We just tell them up front that we need a Visa or MC, they sign a payment agreement and we run the Visa/MC the day after the last mowing of the month is done, (we've always billed monthly). We also have tons of clients who have paid in advance using credit cards, our cash flow is awesome now, no more paying interest on our supplies because we have $8 or 9,000 past due.
  7. Damian

    Damian LawnSite Member
    Posts: 242

    Through Costco? Interesting. Do you have to have a Business account with them to do this? Is the 1.76% based on having a certain number of customers using cards?

    May I ask how many customers you have vs. how many use the service? Do you charge any kind of a processing fee to offset costs?

    Any other answers you want to give to questions unasked would be appreciated.
  8. tthomass

    tthomass LawnSite Gold Member
    from N. VA
    Posts: 3,497

    I'm all cash or check. I don't do maint. Say I'm doing a $10,000 install..........I'm just gonna smile and lose $100 so they can use a credit card??? Screw that, unless you state in the contract x% will be added for credit card payment. Then I am confident that 99.9% would pay with a check.
  9. tthomass

    tthomass LawnSite Gold Member
    from N. VA
    Posts: 3,497

    Also, about computers..........why not get Quickbooks? I just loaded it up, have yet to use it (waiting until Jan. 1) but I can see exactly what I netted each month, what I have spent with various venders, what equip I have rented (should I instead buy?), I can print pay checks and print reports of all sorts. You'll still want to hold on to receipts.
  10. Josh.S

    Josh.S LawnSite Bronze Member
    Posts: 1,085

    Just about everybody uses quickbooks already...

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