Taking Credit/debit Card Payment

Business By BakerAnn Updated 11 May 2011 , 5:07am by scp1127

BakerAnn Posted 10 May 2011 , 2:10pm
post #1 of 40

Some time back I checked into taking plastic for cake orders but as I am a small home-based business it seemed prohibitive to do. Do any of you in my category have credit/debit capabilities and if so, would you mind sharing which ones you use and approximate cost?

Thank you! icon_smile.gif

39 replies
buttercuppie Posted 10 May 2011 , 2:20pm
post #2 of 40

I process credit/debit cards through Quickbooks (since I use that program anways for accounting). I had to start taking plastic because I was pretty mobile before I set up my studio and actually a lot of people appreciate not having to travel to put in a deposit and I also like the ability to get payment ASAP especially on last minute orders. I think it's about $20 per month and then a tiny percentage of how much you charge per month unless it's under a certain minumum. I can honestly say that about 90% of my business uses plastic (I primarily do all custom work so it can get pricey). You should probably call up some of the service providers and find out if the cost would make sense for your business as it is currently set up...and you never know...being able to process cards might increase it...

HTH

SAHCaker Posted 10 May 2011 , 2:42pm
post #3 of 40

You can also process payment via paypal. They have a feature to send out invoices. The fee is a bit high but it gives people piece of mind because it's paypal. You send them an invoice and they could pay with their credit card. You get the money deposited into your paypal account.

AmysCakesNCandies Posted 10 May 2011 , 3:36pm
post #4 of 40

I use Paypal, I am a small home based business and only get a few requests per year to pay by credit card so I find it is the easiets way to go, if I took a lot of credit card payments I would use something else because of the higher % they charge, but there are no minimums, monthly fees, etc so it works great for my circumstances.

leah_s Posted 10 May 2011 , 3:43pm
post #5 of 40

I'm home based and not all that small. I use Paypal and love it. I don't even think the fees are high. I have a different processing service for another business and the fees are higher for that business.

Dreme Posted 10 May 2011 , 5:07pm
post #6 of 40
Quote:
Originally Posted by buttercuppie

I process credit/debit cards through Quickbooks (since I use that program anways for accounting). I had to start taking plastic because I was pretty mobile before I set up my studio and actually a lot of people appreciate not having to travel to put in a deposit and I also like the ability to get payment ASAP especially on last minute orders. I think it's about $20 per month and then a tiny percentage of how much you charge per month unless it's under a certain minumum. I can honestly say that about 90% of my business uses plastic (I primarily do all custom work so it can get pricey). You should probably call up some of the service providers and find out if the cost would make sense for your business as it is currently set up...and you never know...being able to process cards might increase it...

HTH




I have the same setup as you. I use a combination of invoice billing and processing payments by phone with Quickbooks. I love that I can keep track of payments and also see them instantly (yes, especially for last minute orders). Clients love it because it's less of a hassle and it's quick.

jason_kraft Posted 10 May 2011 , 5:08pm
post #7 of 40

We accept cash or check only, so far we've never had a customer turn us down because we don't accept credit/debit cards.

lacie Posted 10 May 2011 , 6:26pm
post #8 of 40

i used paypal until i found the square app for smart phones https://squareup.com/
you can punch on the numbers or it has a card reader that attached to the earphone jack. there isn't monthly fees just per use fees and they work out about the same as paypal.
i have been using them for 6months and no problem

yummy_in_my_tummy Posted 10 May 2011 , 6:56pm
post #9 of 40

Wow, I just checked out that squareup link and it looks pretty cool... the fee is 2.75% per transaction, which is about where a regular credit card machine is, except my understanding is that there is also a regular monthly fee as well... I'll have to look into squareup! Thanks Lacie!

jason_kraft Posted 10 May 2011 , 7:03pm
post #10 of 40

Squareup seems to be an interesting service, there is a positive review at etsy:
http://www.etsy.com/forums_thread.php?thread_id=6712098

It also works with an iPad over wifi.

ConfectionsCC Posted 10 May 2011 , 7:14pm
post #11 of 40

paypal is great! its a small fee everytime you use it, but certainly worth it! I am a small home based bussiness out in the country, so driving up here to pay a deposit would be silly to ask my customers to do. I also give them the option to pay their cakes in full with paypal if they do not want to use cash! (that payment would be made BEFORE they come to get their cake btw!)

lacie Posted 10 May 2011 , 7:22pm
post #12 of 40

i dont pay any monthly fees for square

jason_kraft Posted 10 May 2011 , 7:43pm
post #13 of 40
Quote:
Originally Posted by ConfectionsCC

paypal is great!



Just make sure not to keep a balance in your PayPal account...PayPal is not a bank and I've heard horror stories about accounts being frozen due to disputes with customers.

yummy_in_my_tummy Posted 10 May 2011 , 8:04pm
post #14 of 40

Just read all of the reviews from the link Jason-Kraft posted... does seem very interesting, but also sounds like they lack in customer service, which is scary when you're dealing with someone else's money!

But I'm definately going to look into it. Can't you pass the 2.75% fee onto your customer?

Annabakescakes Posted 10 May 2011 , 8:09pm
post #15 of 40
Quote:
Originally Posted by yummy_in_my_tummy

Just read all of the reviews from the link Jason-Kraft posted... does seem very interesting, but also sounds like they lack in customer service, which is scary when you're dealing with someone else's money!

But I'm definately going to look into it. Can't you pass the 2.75% fee onto your customer?




I think that is illegal?

yummy_in_my_tummy Posted 10 May 2011 , 8:18pm
post #16 of 40

It may be. But what about when you use your debit card at the gas station? They charge $.45. Maybe you just have to charge a flat fee? I'd be interested to know if anyone knows for sure! I don't want to be chargin' customers 2.75% if I'm going to get arrested or sued!! haha

jason_kraft Posted 10 May 2011 , 8:20pm
post #17 of 40
Quote:
Originally Posted by Annabakescakes

Quote:
Originally Posted by yummy_in_my_tummy

Just read all of the reviews from the link Jason-Kraft posted... does seem very interesting, but also sounds like they lack in customer service, which is scary when you're dealing with someone else's money!

But I'm definately going to look into it. Can't you pass the 2.75% fee onto your customer?



I think that is illegal?



It's not illegal, but charging customers extra for credit card payments (or imposing a minimum amount for credit card payments) violates the merchant agreement for many credit cards. However, with most merchant agreements it is perfectly fine to charge a higher price for everyone (with the fee built in) and give people a discount for paying cash.

yummy_in_my_tummy Posted 10 May 2011 , 8:27pm
post #18 of 40

Ahh... I see. So I can charge $205 for the cake, or they can pay $200 if they pay cash. So it's basically what you 'call' the difference in price. Either a credit card surcharge (which is illegal / violates the agreement, etc), or, you get a better price if you pay cash because I'm less out of pocket with credit card fees. I like it...

Annabakescakes Posted 10 May 2011 , 9:42pm
post #19 of 40
Quote:
Originally Posted by yummy_in_my_tummy

Ahh... I see. So I can charge $205 for the cake, or they can pay $200 if they pay cash. So it's basically what you 'call' the difference in price. Either a credit card surcharge (which is illegal / violates the agreement, etc), or, you get a better price if you pay cash because I'm less out of pocket with credit card fees. I like it...




Or some people give a cash discount so Uncle Sam and Uncle Obama don't know about it and they aren't standing there with their hands out to take an additional 25% to 55% AFTER you pay the credit card fees.... But I would never do a thing like that, it is DEFINITELY illegal, just so everyone knows... I know someone who asks all businesses if they have a cash discount. I know auto dealerships do it, they take off all their financing fees and credit checks and such.

LindaF144a Posted 10 May 2011 , 9:44pm
post #20 of 40
Quote:
Originally Posted by jason_kraft

Quote:
Originally Posted by Annabakescakes

Quote:
Originally Posted by yummy_in_my_tummy

Just read all of the reviews from the link Jason-Kraft posted... does seem very interesting, but also sounds like they lack in customer service, which is scary when you're dealing with someone else's money!

But I'm definately going to look into it. Can't you pass the 2.75% fee onto your customer?



I think that is illegal?


It's not illegal, but charging customers extra for credit card payments (or imposing a minimum amount for credit card payments) violates the merchant agreement for many credit cards. However, with most merchant agreements it is perfectly fine to charge a higher price for everyone (with the fee built in) and give people a discount for paying cash.




I just looking into this for my store. I has a conversation with a credit card processing company about this exact same thing.
It is legal to impose a minimum amount before one can charge, for example $10.00.

However it is a federal law that you cannot tack on a fee for using a debit or credit card. So that delicious pizza place in NJ that charged me $.50 to use my debit card because it was under $10.00 was breaking the law. Just wait till get down there again...which may be never at the rate I'm going.

And 2.75 is way higher than what I was quoted too, BTW.

jason_kraft Posted 10 May 2011 , 10:36pm
post #21 of 40
Quote:
Originally Posted by LindaF144a

I just looking into this for my store. I has a conversation with a credit card processing company about this exact same thing.
It is legal to impose a minimum amount before one can charge, for example $10.00.



It is legal, but the Visa and MC merchant agreements specifically forbid it, so if enough people complain you could lose the ability to accept credit cards. Not sure about Discover or Amex.

Source:
http://consumerist.com/2009/09/squash-minimum-purchase-fees-with-wallet-sized-merchant-agreement.html

Quote:
Quote:

However it is a federal law that you cannot tack on a fee for using a debit or credit card.



Which federal law is this? There are regulations in place that limit fees, but I'm not aware of any law that bans fees. Again though, this is covered in the merchant agreement.

Source:
http://www.politico.com/news/stories/0311/50884.html

BakerAnn Posted 10 May 2011 , 10:38pm
post #22 of 40

Thanks to everyone who has replied. This is all great information for me to look into. I do think having card capabilities increases business so need to get something set up.

LindaF144a Posted 10 May 2011 , 11:11pm
post #23 of 40
Quote:
Originally Posted by jason_kraft

Quote:
Originally Posted by LindaF144a

I just looking into this for my store. I has a conversation with a credit card processing company about this exact same thing.
It is legal to impose a minimum amount before one can charge, for example $10.00.


It is legal, but the Visa and MC merchant agreements specifically forbid it, so if enough people complain you could lose the ability to accept credit cards. Not sure about Discover or Amex.

Source:
http://consumerist.com/2009/09/squash-minimum-purchase-fees-with-wallet-sized-merchant-agreement.html

Quote:
Quote:

However it is a federal law that you cannot tack on a fee for using a debit or credit card.


Which federal law is this? There are regulations in place that limit fees, but I'm not aware of any law that bans fees. Again though, this is covered in the merchant agreement.

Source:
http://www.politico.com/news/stories/0311/50884.html




I cannot tell you what law. When the experts who run the company processing credit cards tell me it is a federal law, I do not ask them what code it is. I just believe them. So all I can tell you, and I did not look at your link, is it is a federal law that you cannot impose an extra charge if someone is charging something below a minimum amount. I don't know if this means that you cannot charge a fee period. In my instance talking to my cc person, I was asking if I could for a charge under $10.00, just like it happened to me in NJ.

Now an extra charge all together is different. In fact I was charged a cc processing fee from my graphic designer. If this is illegal I will gladly go back and get my $25.00 back. But I believe this is two different kinds of situations, given the minimum amount part.

yummy_in_my_tummy Posted 10 May 2011 , 11:17pm
post #24 of 40

But it sounds to me, like there's nothing wrong with giving a cash DISCOUNT, right? Because the price being charged is the price, unless you pay with cash you get a discount. I think that's what I'll use to avoid the whole legal/illegal/looked down upon issue icon_smile.gif

Annabakescakes Posted 10 May 2011 , 11:21pm
post #25 of 40
Quote:
Originally Posted by yummy_in_my_tummy

But it sounds to me, like there's nothing wrong with giving a cash DISCOUNT, right? Because the price being charged is the price, unless you pay with cash you get a discount. I think that's what I'll use to avoid the whole legal/illegal/looked down upon issue icon_smile.gif




thumbs_up.gif Good idea...

Renidea Posted 10 May 2011 , 11:27pm
post #26 of 40

How do any of you handle checks then? I'm worried about returned/bounced checks and how to handle those.

I know at some of the business I've worked for they 'cleared' checks like they did Credit Cards before accepting them. Do any of the services any of you use offer that?

cakegirl1973 Posted 10 May 2011 , 11:29pm
post #27 of 40

As an aside, if you are a cottage home baker, you may need to see if your state's law prohibits sales/payments via the internet, such as PayPal. I know that Michigan's Cottage law has this provision. I do not know if other states have this type of restriction, as well.

cakegirl1973 Posted 10 May 2011 , 11:45pm
post #28 of 40
Quote:
Originally Posted by Renidea

How do any of you handle checks then? I'm worried about returned/bounced checks and how to handle those.

I know at some of the business I've worked for they 'cleared' checks like they did Credit Cards before accepting them. Do any of the services any of you use offer that?




The only time I accept checks are for deposits and final payments on wedding cakes. I want to have plenty of time (2 weeks) to deal with any issues of checks clearing. For party cakes, I require a 50% deposit and then I only accept cash at the time of pick-up or delivery. I do not want to ever be in a situation where they have the cake and the check bounces. I have had no problems with this policy.

CutiePieCakes-Ontario Posted 11 May 2011 , 12:05am
post #29 of 40

Some people want a deposit 4 weeks in advance, to make sure it clears before buying supplies, then final payment 2 weeks in advance. That's fine for a big (wedding/sculpted) cake, but for a small (birthday) cake, I'd say 2 weeks deposit, cash on pickup/delivery.

kc03 Posted 11 May 2011 , 12:21am
post #30 of 40

I use a company called pro-pay. (propay.com) They issue you a credit card linked to your account that you can use for any purchase just like a debit card. You have the ability to transfer funds to your checking account if you choose. It takes 48 hours for your money to be available, but the good news is that you can run a card on a sunday and have your money on tuesday. Most of the other card places only process monday-friday. So if you run a card on a weekend it will take 4 days to get your money. They do charge a small yearly fee. And I think the rate to process a card is less than 2%. Although you technically take a small loss for processing a clients card, all fees are tax deductible. Which helps you at the end of the year. Many of the home based buisness use them (mary kay, pampered chef, avon etc) You can process a clients card online, through the 800 # or with a micro reader they have that links to any android or iphone. I have been using them for almost 3 years and love it!

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