Check Or Cash Or Credit Card

Business By HeidiCrumbs Updated 6 May 2009 , 7:39am by PieceofCakeAZ

HeidiCrumbs Posted 4 May 2009 , 5:43pm
post #1 of 31

What do you all accept?

I will be a small in-home bakery and I don't want to take CC's but I worry that I may lose business that way.

I will definetly take checks and cash, and I am thinking about doing a "I'll send you the bill" type thing.

Can you tell me about any of your experiences with payment options? Thanks!!


30 replies
Ruth0209 Posted 4 May 2009 , 5:49pm
post #2 of 31

A lot of people use a PayPal account to take credit cards. I don't do it yet, but others here can tell you how it works.

I recommend against the "I'll send you the bill" approach. Sooner or later, you're going to get stiffed. You need to get your money up front, and certainly at the time of delivery if not before. Don't be too trusting and assume every person is going to pay you, or that they're not going to give you a check that bounces.

djs328 Posted 4 May 2009 , 5:49pm
post #3 of 31

I've thought about this - for if/when I do decide to become a 'business'...what about using something like Paypal? That way people can pay w/cc if they want to...and I believe you would be protected by Paypal for NSF, etc....

HeidiCrumbs Posted 4 May 2009 , 6:38pm
post #4 of 31

So for PayPal do I let them use my computer and they just pay at the time of purchase? Or is it more for special orders and then they pay you by "x" date and if they don't they don't get the cookies?

I'm too trusting and I know this will be a major flaw in my business.

djs328 Posted 4 May 2009 , 6:55pm
post #5 of 31

I think I would be too trusting, too...To use Paypal, you would set up an account (it takes 5 minutes) and it would be linked to your bank account. (You could set up a separate acct for this purpose) Then, they would set up their own acct, (some/a lot of people already have one if they shop at all online...) They would pay through their account, and the money gets electronically transfered to your acct. They can set up their acct however they want (pay w/cc, or out of bank account) I use it for ebay, and I've noticed a lot of other online retailers are using it now as a form of payment. You can read more (prob. more reliable?) info on this site:
As for people not wanting to buy your stuff if you don't take CC...I don't know...if they really want your stuff, they will pay with cash/check if that's what you accept. (Just looked at your pics - your cookies are awesome!)

goldenegg Posted 4 May 2009 , 7:17pm
post #6 of 31

I wouldn't let anyone use your computer to make a transaction even if they're logging onto their own paypal account from your computer, there are policies in place such as needing to be PCI compliant in order to make transactions and store cc information for any type of business, paypal is compliant for this. In addition to being a security risk for both you and your customer, you're leaving yourself open to an investigation, fines, lawsuits, etc. if you accidentally store customers credit card numbers in your browser (or otherwise) and your computer maybe gets stolen or someone's card gets fraudulently charged up. I don't know what other peeps do but a better option is to request payment by sending an invoice through paypal you can do this even if the customer doesn't have a paypal account, i've done this from my paypal account (not for cake though) and it's effective as well as pretty convenient, you can make it clear to them up front that payment is due immediately upon receipt of invoice or the order is null and void. HTH icon_biggrin.gif

Bonnie151 Posted 4 May 2009 , 7:24pm
post #7 of 31

I use PayPal. You do have to pay them charges, but it's so simple and a lot of people like to pay via cc. You just send them a PayPal invoice which in turn sends them an e-mail with a link to PayPal's payment page. They don't need a PayPal account to pay you.

HeidiCrumbs Posted 4 May 2009 , 7:37pm
post #8 of 31

Djs- thanks for the compliment! I still have a lot of practice to do, but with each batch of cookies I think I'm getting better and learning more.

As for letting them use my computer I had NO idea that all of that could happen! I am soooo naive!

So then for PayPal, I e-mail them a bill and it's due right away? Isn't that the same as sending them a bill via snail mail? I mean, I'm still trusting them to pay after they already have my product, right? I will have to look more into the link that was posted about PP.

This is my least favorite part so far of setting up a business.

Thanks so much for all of the information so far, I really appreciate it!


djs328 Posted 4 May 2009 , 7:41pm
post #9 of 31

I would request payment before they pick up the order (there is a wait time - don't know exactly what it is...check w/paypal) so that funds have cleared when the order is delivered/picked up. Might not be a good idea to wait for payment until after they have the goods...sounds like a good way to get burned...unfortunately, not everyone is honest, or even sometimes it's just absentmindedness - people sometimes 'forget'...
just MHO!

Best of luck!! icon_smile.gif

sweetcakes Posted 4 May 2009 , 7:45pm
post #10 of 31

i offer to send a paypal invoice or they can send me a cheque as long as the order is over 2 weeks out. for my regular customers whom i have done cakes for for years, i let them pay on pick up, only those people. otherwise all orders have to be prepaid. more and more are opting to pay through paypal, it does cost just over $3 per $100 order but that is the cost of doing business. cheaper the CC merchant fees.

goldenegg Posted 4 May 2009 , 7:56pm
post #11 of 31
Originally Posted by HeidiCrumbs

So then for PayPal, I e-mail them a bill and it's due right away? Isn't that the same as sending them a bill via snail mail?

Yes, with paypal you can email them an invoice and they can pay immediately w/ cc, as opposed to snail mail where it takes forever and then how would you make the cc transaction? You would need a merchant account or 3rd party merchant. Whereas with paypal it's cheap, convenient, customer gets the invoice fast, you get your money fast, so there is definitely some advantages over snail mail. But to ensure payment you could include in your contract that payment is due upon receipt of invoice, if no payment is received then the contract is void thus no cake/cookies/cuppies, I would advise against delivering anything w/out payment in advance icon_biggrin.gif

HeidiCrumbs Posted 4 May 2009 , 8:09pm
post #12 of 31

The thing though, is that I will have a retail area where people will be able to walk in and buy already made cookies, so therefore they would still get the cookies on the honor system because they would have to go home and send me the payment via PP. Right? So aside from the time issue and PP being much faster, it would be the same as me sending them a paper bill in the mail for them to in return send me a check or come back and pay cash. They are still getting my product without immediatly paying, KWIM?

I looked at the PP site and it is $30 a month and .30 cents a transaction. I think I may be leaning toward doing it the old fashioned way.

goldenegg Posted 4 May 2009 , 8:18pm
post #13 of 31

ahhh i see what you mean, yeah in that case you'd prob need the virtual terminal or your own merchant account to process transactions right from your shop. So for the ready-made cookies & stuff cash/check only, but for advance notice orders you could still take cc.

cakesdivine Posted 5 May 2009 , 4:28am
post #14 of 31

We only accept cash or paypal payment. You can use virtual terminal and I think they now offer a card reader that hooks up to your computer to process the payment.

cylstrial Posted 5 May 2009 , 1:01pm
post #15 of 31

I think if you tell people upfront that you only take cash and checks that you'll be ok. Just put it on your website and make sure you tell them when they come in. It might be a little bit inconvenient (especially if you're someone like me who pretty much never carries cash or checks), but you adapt to it. For instance, our donut shop only takes cash. So when I want donuts, I know that I have to go and get money.

littlecake Posted 5 May 2009 , 4:08pm
post #16 of 31

i've been open 7 years...i only take cash or checks.

i figure i pay out enough in overhead...why add another thing to the bill....sometimes all they have is a card when they pick the cake up, theres a ATM right down the street.

your regulars get used to it.

theres still a lot of businesses that don't take cards.

FromScratch Posted 5 May 2009 , 5:13pm
post #17 of 31

If you are having a retail store front in your home (have you checked with your town to make sure this is okay to have in your home? Just a thought because a lot of the time this isn't allowed due to zoning laws) then having them take cookies and you mail them an invoice would be something to avoid at all costs. Accept cash and checks and you can do CC's for advance orders if you want to, but there's nothing wrong with not accepting CC's. If you want to accept CC's in your retail store then you will have to get a terminal. PayPal has one, but I don't know much about it. There is a $30 monthly fee and per transaction fee of 2.4% (or close to that). I think it all depends on how much business you think you will be doing. It's something you can easily add later on if you find you are getting tons of people who want to use their cards.

margaretb Posted 5 May 2009 , 5:50pm
post #18 of 31

Would the grocery store let you walk out with their cookies if you showed up with a credit card and they only accepted cash? I don't think so! If you are willing, you could set up the paypal thing (or if you are a costco member, there is a credit card processing service they do but I don't know the rates) and if people want to use it, they have to pay in advance. Otherwise, cash or cheque only. My hairdresser accepts cash only, so I know to stop at the bank machine on the way there. You are obviouly not a retail giant, so this should not be a big shock to your customers. Make sure you tell them when they place an order.

margaretb Posted 5 May 2009 , 5:51pm
post #19 of 31

Oh yes, and have directions to the nearest bank machine handy!

en-passant Posted 5 May 2009 , 6:48pm
post #20 of 31

Cash is king.

(the ATM is right around the corner).

djs328 Posted 5 May 2009 , 7:09pm
post #21 of 31

I just got the Costco email advertising their credit card processing rates - if you are a member there is no monthly fee and the app fee is waived - fees are 1.64% + $.20 per swipe...HTH!

Although I still say most people will pay the cash/check if they know that's your deal. icon_smile.gif

cakesbycathy Posted 5 May 2009 , 7:53pm
post #22 of 31

In this day and age, when even McDonald's takes a CC, I think you are doing a disservice not to offer credit cards as an option for payment. There are statistics out there ( I think Indydebi had actual numbers) that people will spend more if they are using a CC.
Frankly, I think you are taking a bigger risk accepting checks.

__Jamie__ Posted 5 May 2009 , 8:08pm
post #23 of 31
Originally Posted by HeidiCrumbs

I'm too trusting and I know this will be a major flaw in my business.

A major downfall....not to sound like a meanie, but you have set rules, unbreakable rules for all customers....give some of them an inch, and they'll walk all over you. icon_sad.gif

__Jamie__ Posted 5 May 2009 , 8:10pm
post #24 of 31

I would adive against checks '9 to 5' recently stopped accepting them all together. $7000 in bad checks over the Christmas holidays....and we're still collecting on some of them. All the while, they have had our service and products and have been using them with out nice is that!

FromScratch Posted 5 May 2009 , 8:41pm
post #25 of 31

I only accept checks if they pay on time... that's 4 weeks before their event date. This allows for ample time for a bounced check to show up. After that point it's a cashier's check (if I'm feeling nice), a money wire (again if I'm feeling nice), or cash. Anything ordered after that 4 week mark must be paid in full in cash to book. Jaime's right... give them an inch and they'll walk ALL over you.

To be honest... if I were in your shoes I'd be a cash only business right now, and then add cc's if you want. I'd forgo checks altogether. We have very different businesses and mine allows me the time to make sure a chack doesn't bounce before I put forth any effort... yours doesn't offer you the same saftey.

__Jamie__ Posted 5 May 2009 , 8:49pm
post #26 of 31

Oops. I was of our shops (my "other job, my 9 to 5) decided to "be nice" and let another check thru...guess what? It make that about $8000 we're collecting on!

pipe-dreams Posted 5 May 2009 , 9:07pm
post #27 of 31

I recently had a woman from out of state order a 3D cake for her son's bday. He lives in town on the base, and she wanted to surprise him at work. Since I work from home, I don't accept cc's. Only checks/cash in advance, or cash the day of delivery if it's a small bday cake. I told her I did have a paypal that she could put money into, and she decided to do a money order. All I had to give her was my name and phone number. Granted, I had to drive 1/2 mile to pick it up, but I was paid in full within 30 minutes from hanging up with her. She had to pay extra to send the money, but that's the price you pay for something you want!

*on a side note, if I show up with the cake, I don't bring it in until I have the money in my hand.

indydebi Posted 5 May 2009 , 9:18pm
post #28 of 31

As mentioned already, there are businesses out there that do not take credit cards. On the other hand, hubby and I went to a local small-town-type restaurant for lunch on Sunday and they take cash and credit cards only.

I just looked it up and people spend an average of 30% more when using a credit card.

It may also depend on what market you are trying to penetrate and how you plan to do your transacations. For example, I pursue corporate accounts and the majority of them will pay for everything from 2 dozen cookies to dinner for 200 with a company credit card. If I'm going after corporate sales, then I better be ready to accept credit cards. If that's not your market, then it's not a major concern.

I was surprised to see (what I considered) a major caterer in town does nto accept credit cards (but they DID close the location close to me icon_rolleyes.gif ).

With checks, you have the risk of having a bounced one.

With credit cards, you have the risk of the customer disputing the payment and having the money yanked out of your account until it's resolved.

Everything has a risk factor.

__Jamie__ Posted 5 May 2009 , 9:23pm
post #29 of 31

And with cash you have the risk of getting a paper cut when rifling through that stack of paper! Hahahahahaha! I'll take that! icon_biggrin.gificon_biggrin.gificon_biggrin.gif

margaretb Posted 6 May 2009 , 6:19am
post #30 of 31

--Jamie -- Here in Alberta, if a check bounces, you can take that bounced cheque back to the bank that issued it and have it certified if there is now money in the account. I did that once, and the certification fee was around $10, which was half the cheque amount, but I couldn't get ahold of the person who wrote it, so I figured it was better than the nothing I got with the bounced cheque. Anyway, I have never met a person who knew that we could do that. I'm embarrased to admit that I only found out about it because I bounced a cheque once and the organization put it through the next week anyway. Maybe your banking laws allow that too, and since it sounds like you are dealing with large amounts, the certification fee would be relatively small.

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