Will Accepting Credit Cards be in Your Future?

Here's a question asked of me recently by a seminar attendee. Because it is a good question and somewhat common I have decided to publish an answer for all to see...

"Mike, I need your suggestions. I have customers requesting that we accept credit cards but I cannot get qualified to get a card machine. I was thinking about Google Merchant or Pay pal but the services charges are pretty high. Any suggestions?"

You want to pre-qualify your clients by stating something like this during your conversations before you price them; "For your information, you can pay with check or with a credit card. Many of our clients like using credit cards because they can earn points or frequent flier miles?

Notice that the second sentence is a statement. Raise your voice at the end and a statement becomes a question, suggesting that you are expecting an answer. Depending on the answer, you either add the credit card charges to the quote or not.

Another, more secure way to recover the costs of accepting credit cards is to simply increase your prices across the board by adding a proportionate amount of your projected annual costs associated with using credit cards to all of the quotes you give. When you think about it, the increase would be very small when spread over all of your volume, depending on what percentage of your clients actually choose to pay with the cards. For example if you annual volume is $1,000,000 and you think 25% of those sales might be funded with a credit card you need to apply your monthly fee of $30 x 12 months ($360) plus 3.5% transaction fee on $250,000 to each sale funded with a credit card. Using these numbers as examples, you would spread $9110 over the $250,000 sales volume, an increase on each sale of 3.6%.

And yet another option; price the credit card charges into all quotes and let the client know that if they pay cash they can earn a discount. If I am not mistaken the rules on this have recently changed, for this reason you are beginning to see gas stations post a "cash price" which is discounted. Giving your customer a choice about this is good. Everyone loves to earn a discount if they can, unless they are short of cash or value the points of frequent flier miles more than the discount.

Credit cards applications are beginning to be available for cell phones now. Soon you will see credit cards used at garage sales and flea markets. You might even use a card swiper like this one to settle up the restaurant tab with your friends. Check with your cell phone regarding applications that might be available.

Not to sound like a commercial, but my book on sales covers all the questions you want to use to pre-qualify your prospects on the phone before you meet with them. In times of too many leads you are deciding who has priority. During times like these when you are perhaps running every lead you gain information about how to approach the sale, hot buttons, ability to pay, etc. Check out the book at www.techknowledgeonline.net, it is the first item on the list "tool price list", one of the tabs on my web page.