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Increase Your Sales Accept Credit Cards, Part 2
By: Sue and Chuck DeFiore, Tue Mar 28th, 2006
In part two we will discuss overcoming objections, which credit
cards to accept and using the check paying option.
If your business is home-based or has been in operation for less
than two years, you’re likely to face objections from the bank.
If yours is a home-based or a brand-new company, be sure to meet
with the banker to show your business plan, offer collateral and
discuss your personal net worth. You are more likely to be able
to overcome objections by being open and honest. Even if your
bank turns you down, however, you still have options. First, you
can always try other banks.
If you don’t have any luck getting a bank to back you on your
own, consider going through an Independent Sales Organization
(ISO). These are field representatives from out-of-town banks
who, for commission, help businesses find banks willing to grant
them merchant status. Ask your bank to recommend an ISO, or look
in the Yellow Pages under credit cards. The ISO may be able to
help you simply because it represents dozens of banks, each with
their own specialties and criteria. The ISO representative can
match your needs with the needs of the banks he or she
represents, without requiring you to go through the application
process with all of them. Of course, you will pay higher fees
because you run a home-based business, which presents more risks
to the bank. Some banks will require you pay either a percent of
your monthly credit transactions or dollar amount, whichever is
higher. You also pay a per-transaction handling fee, a monthly
fee and per month fee to rent a point-of-sale terminal.
Which Credit Cards Should You Accept
Once you’ve obtained merchant status, you can accept a variety
of credit cards, depending on which are offered by your bank.
Some banks issue their own cards, and others act as
intermediaries between the credit-card companies and your
business.
Different banks offer different cards. Most will likely offer
Visa and MasterCard, because these are the cards most consumers
have. Many banks also offer Discover and American Express, but
not all do.
Before you sign on with any bank, consider the costs carefully.
If you don’t anticipate many credit-card sales, it might not be
worthwhile for you to pay the setup and monthly fees. If you’re
not sure the costs will benefit your business in the long run,
call a few banks and find out what kinds of fees they charge. Be
sure to call more than one, because fees vary and you won’t have
a set figure until you actually apply.
Accepting credit cards may not be for every business. But if
yours is the kind of business where customers are likely to want
the convenience, you’re only cheating yourself if you don’t give
them what they want. Remember, your competition will.
Check It Out
If a lack of a business track record is what keeps you from
getting merchant status, consider signing up with an agency that
provides checks by phone. This service allows you to accept
payment directly from a customer’s checking or savings account.
With this type of service clients simply e-mail, fax or send by
modem the customer’s name and address, the amount of the sale
and all the numbers listed across the bottom of your customer’s
check. These numbers, include the bank routing number and the
customer’s account number. They use these numbers to draft the
appropriate account and pay your business. You can usually
request that your payment be sent by overnight shipment,
resulting in your getting paid even before the draft has been
completed.
If you suspect a check might be bad, you can have them check it
against its computer database, which includes identification
information on banks and their branches in both the United
States and Canada. There is a per transaction charge for this
additional screening.
So, as you can see you have a number of ways to get merchant
status. Remember, the name of the game is options and
convenience for your customers. If you don’t offer it, they will
go to someone who does. So what are you waiting for!
Copyright 2004 DeFiore Enterprises
About the author:
Interested in having your own successful, home based creative
real estate investing business? Chuck and Sue have been helping
folks start successful home based businesses for over 19 years,
and we can help you too! To see how, visit
http://www.homebusinesssolutions.com for the latest FREE tips
and tricks, educational products and coaching in creative real
estate investing and home based businesses.
