After reading a recent article in an associated trade magazine supplement, I would like to share a concern I have about accepting credit cards. Read the fine print. If you couldn’t read the previous line, “Read the Fine Print.”
A few years ago our company began accepting credit cards. We thought that the advantages associated with giving potential clients the option to use the credit cards would be a great selling point. What better than to charge $30,000 in landscape construction services and receive rewards bonus points, or cash back, etc. In the four years that we accepted two of the major credit cards, we had three clients use the credit card service. Hardly the response we expected. To the contrary, accepting credit cards cost me time and money. One of the three customers, who still owes our company money, had a Chargeback Advice filed with the credit card company. Well, welcome to the world of plastic. Not being a retail-type operation, and not being familiar with this process or language, our first notification to the action was a $13,000 debit from our checking account (revealed during our daily online banking). A day later a notice was received in the mail advising our office of the Chargeback Advice and that the credit card company had debited our checking account in the amount of $13,000. Talk about adding injury to insult. Not only did we have a dead beat customer, but the customer had the “right” to unjustly withhold more money.
Eventually, through numerous hours of documentation, letter writing, and general frustration, I had the Chargeback Advice corrected and the money placed back in our checking account.
So is accepting credit cards good for your company? I think it gets down to what type of service your operation is providing. Will offering a client the ability to pay with a credit card prompt more work? Possibly. I know what our answer is, but if you are considering accepting plastic, I encourage you to read the fine print.
Joseph Pillari is a partner at Pillari, LLC and can be reached at: firstname.lastname@example.org