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From: John De Armond
Subject: Re: credit card processing help
Date: Sat, 15 Jan 2000 03:01:18 EST

nate profound glass works wrote:
> Hello helpful folks of the glass newsgroup.
> I have been playing with the idea of accepting credit cards. My question now
> is which company to go with and weather or not to get a processing unit for
> the shop or just do it all online. I also have no idea which processing
> company is the best to deal with. Any advice or comments would be great

Open a checking account with your nearest LOCALLY OWNED bank.  How
do you know?  They usually make a big deal about it in their
advertising.  Then ask about a merchant account.  When I did that a
few years ago, a person appeared the next day with a terminal,
printer and imprinted.  No contracts, no fees, no hassles.  Also a
flat rate commission.  This is important, for many processors charge
one commission rate for swiped cards, a higher rate for manual
keying of the number and a higher still rate for voice
confirmation.  Since if you do mail order, you'll be doing one of
the latter two methods, you don't want to have to pay a high
commission.  A good commission rate is in the neighborhood of 2.2%
for MC and Visa.

I walked in the office of my massage therapist one day and she was
examining a "contract" provided to her by her mega-bank in response
to her request to establish a merchant account.  Frankly I've never
seen a larger single piece of paper outside a paper factory!  It was
at least the size of a newspaper sheet fully opened and printed with
newspaper-sized print.  Best we could tell, they were going to
charge her $700 for the terminal and printer, $700 more security
deposit and about $200 application fee.  After looking at that, I
simply dialed my bank's number, asked for the merchant account
person and handed the phone to her.  A bank representative was there
with a terminal before my session was over!

The neighborhood banks offer this kind of service because they have
to in order to survive the megabank onslaught.  What you don't want
to do is go with one of the very high priced third party clearing
house.  I picked up the flyer Sam's Club was advertising for their
service.  Their prices were higher than the megabank above plus they
held on to the money for 48 hours after closing out the daily
transactions.  My bank EFTs the funds into my account the instant I
close the terminal for the day.

Another issue is chargebacks.  Reading the lawyer print on both the
megabank's contract and the Sam's club one, if someone puts a charge
in dispute, the clearing house assumes you're at fault and forces
you to provide documentation to substantiate the charge.  Meanwhile
they've deducted the amount of the transaction from your account.
Generally if you don't have an original signed slip, it is very
difficult to defend the chargeback. I've never had a chargeback but
I asked my bank about that once.  They assume I'm in the right and
simply ask for reasonable documentation that the charge is legit.  A
signed slip is enough.  A phone order coupled with a shipping
receipt is also generally enough.  The money remains in my account
until and unless the issue is resolved against me.  And since my
bank is a 2 block walk away, I can simply carry the docs up and
resolve the matter in minutes.

Lastly, I recommend against buying the terminal and printer.  The
Verifone terminals are quite unreliable.  I do an average of 50
transactions a day and I generally have to have something replaced 3
or 4 times a year.  My lease is $10 a month and includes all
consumables (ribbon, NCR tape and imprint slips).  Typically a new
Verifone terminal will cost $150 and the printer $150-200.  Both are
giant ripoffs but I've yet to find anyone who discounts them.  The
lease is a much better deal.

From: John De Armond
Date: Wed, 31 May 2000 01:24:38 EDT
Newsgroups: rec.outdoors.rv-travel

"George E. Cawthon" wrote:
> Doesn't cost me more to use a credit card.  Have you ever tried to get
> the cost lowered for paying in cash?  Several years ago I tried to get
> at least 2 percent off for paying cash on items of more than $400.  Not
> one store would give anything off; I finally quit trying.  So, I use the
> credit card, but don't have to take anything out of my checking account
> for up to 1-2 months later when the bill comes.

Come on, George, you know better than that.  We all pay for some
folks to be able to use credit cards.

By coincidence, we just this week decided to stop taking credit
cards in my restaurant.  The bank has just sent us a letter telling
us that our commission was to double plus we'd have to start paying
a transaction fee.  We decided it isn't worth it, nor is it worth
passing on the added cost to our customers.  When we issue our new
menus in a couple of weeks, the price increase will be a bit smaller
than otherwise because of our decision on credit cards.

That business "pays" for some fee or tax or that some fee or tax is
not passed on to the consumer is one of the great myths that the
near-illiterate population has accepted almost without question. 
Clue:  Businesses don't pay for anything since they're only two way
conduits for goods, services and money.  Each of us individually
pays for everything because we're the ones creating value and wealth
with our work.  When a price increase or added fee or added tax
comes along, I make the choice of either a) taking money out of my
personal pocket to pay it or b) passing it along to the customer. 
Clue: a) is almost never the answer.

To directly answer your question, yes, I do often negotiate a cash
discount in return for not using credit.  If I can't get the
merchant to move off his price any other way, I'll ask for the
commission savings for NOT using my debit card.  If he won't budge
(he usually does), then I just use the debit card.


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