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Discussion Starter #1
We are considering taking credit cards. My husband and I differ on opinion here.

Background - in 3 1/2 years we have not been stiffed, though we do a lot of work for out of town owners. In the same period, we have lost two water heater jobs. Just this week we gave a quote on partial repipe and HO wants to wait 90 days. If we took the card, DH believes we would be doing the job now. I believe HO will have us do the work in 90 days because she was a referral from a very good customer.

My thoughts - just running some numbers. If a portion of this years customers had paid with a credit card - it would have cost us $3,000.00 in fees. Not including time to track payments hitting the account. Also, I feel check paying customers would more often than not use a credit to earn rewards (which ultimately we pay for.) Also, I think it would attract more lower income, can't afford anything customers.

DH thoughts - we could increase sales. However, I doubt this because our plumbers are better plumbers than they are salesmen.

What think you?
 

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Chase Plumber
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We have taken credit cards for the last 2 or 3 years I would say. Usually comes in handy when installing septic systems. I've not took any money in from a plumbing install job yet, but I have only had my master's license for about 3 months.
 

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Just say your prices reflect a 3% cash or check discount. It discourages people from using the card to earn rewards but allows those who really can't afford it to use their card without cutting into your profit.
 

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Discussion Starter #4
Thank you Marlin, makes sense. I know you can't do it the other way, charge extra for using a credit card. We are just getting ready to switch to flat rate, so I'm not sure if I want to go that way because all prices would be inflated 2-3%.
 

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In a down economy many people have no real choice than to resort to using credit to make unexpected purchases, and by not taking them you are removing that percentage from your customer base. There are options on what way you receive payment via credit card, talk to your banker to explore them.
 

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Thank you Marlin, makes sense. I know you can't do it the other way, charge extra for using a credit card. We are just getting ready to switch to flat rate, so I'm not sure if I want to go that way because all prices would be inflated 2-3%.
You can do it without inflating your prices. You write on your estimate or verbally tell your customer your prices reflect a 3% cash discount. That means the 3% discount is already included in the price. If they do not meet your terms (pay by cash or check) they do not receive the discount and the price goes up 3%.

Example:
Customer asks you how much to change a flapper. You tell them "$100 and that price reflects a 3% cash discount". So your price actually is $103 but you never actually say that number which is a plus for you. If they're not using a credit card they'll never even think about it. If they are they just need to do a little math to figure it out.

This is what I've seen a lot of businesses do. I'm not sure if it's legal or not but so long as you never slip up and say you charge extra for using a credit card it should be fine.



On another note. How much did the credit companies pay to get those laws passed? It makes absolutely zero sense that everything in the country should be marked up 3% or so (regardless of how you pay at most places) so the credit card companies can take a cut. Where do I sign up to instate a 3% sales tax on the country?
 

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OK, there is some screwy logic here.

You take your projected sales for the first year of CC's and guesstimate your CC sales portion. The cost of processing those sales via CC will be used as this years number in your overhead budget for overhead.

Next year, you look at actual numbers. Add a small percentage for growth and that will be your second year's number for your OH budget.

Marking everything up just because you've started accepting CCs is as silly as raising all your prices by 8.00 dollars because you expect to burn two gallons of gas per line item.

Think like a business person, not like a plumber.

This is an overhead expense that will show up on some of your jobs but not all. You could track it as a a direct job expense, but you'd be pulling you hair out looking through a microscope at a fly. Swat the fly and quit worrying about how long its legs are.
 

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One other thing. Talk to you local bank about CC processing. I think you will find they are quite competitive with the national folks. You can buy your CC equipment outright at almost any Sams or Costco.

Don't go paying 3,000.00 for a fancy use in the field thingy when a quick cell call to the shop and an extra .4 percent will take care of it. One more tool in the field is one more to break, get lost or malfunction.
 

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residential service
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Thank you Marlin, makes sense. I know you can't do it the other way, charge extra for using a credit card. We are just getting ready to switch to flat rate, so I'm not sure if I want to go that way because all prices would be inflated 2-3%.
3% higher price on $100 = $3.00. Is anybody going to notice or even care that there bill is $3.00 more :no:.
 

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I've heard and believe it is probably true but don't know for sure that consumers using a cc on average will spend 17% more than those using cash (I think it was Dave Ramsey)! Ok so the cc company wants 3% of the sale (this is high by the way, I'm paying about 1.75% on swiped transactions), so if customer A spends $250.00 and Customer B spends 17% more or $292.50 but then you subtract 3% from customer B's ticket you get $283.73. You just made an extra $33.73 on that ticket.

How many tickets would you like to make an extra $33.73 on?

This requires no more thought on your part. Start taking them.
 

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residential service
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One other thing. Talk to you local bank about CC processing. I think you will find they are quite competitive with the national folks. You can buy your CC equipment outright at almost any Sams or Costco.

Don't go paying 3,000.00 for a fancy use in the field thingy when a quick cell call to the shop and an extra .4 percent will take care of it. One more tool in the field is one more to break, get lost or malfunction.
Be careful! My bank tried to bend me over!
 

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Discussion Starter #13
Double A - I am thinking like a business person. Perhaps I was too cryptic and trying to over simplify. Of course, you would put it in as overhead based on the percentage of credit card sales you anticipated, so the number would be less than my stated 2 - 3% overall. Realistically, probably only 1%.

The real rub for me - I HATE CREDIT CARD COMPANIES! Like posted above, everything is marked up to cover this convenience. I wish more than just gas stations offered a cash discount. I KNOW this is how things work - I just don't like it. I'm a rebel at heart, so this is a struggle.

Another aspect I don't like - they can take money from your account when a customer disputes the charge. Probably doesn't happen to often, but I don't like the idea that it can happen.

Final reason - we are looking at a $399.00 machine to have in the office. Plumbers will call in and give me the info. I don't like the idea of dropping what I am doing to process a cc payment.

Tonight I'm b*tchy. I know we need to do this, but I don't have to like it. I want all the money and I want the world to be perfect. Not happening I know.

OK, there is some screwy logic here.

You take your projected sales for the first year of CC's and guesstimate your CC sales portion. The cost of processing those sales via CC will be used as this years number in your overhead budget for overhead.

Next year, you look at actual numbers. Add a small percentage for growth and that will be your second year's number for your OH budget.

Marking everything up just because you've started accepting CCs is as silly as raising all your prices by 8.00 dollars because you expect to burn two gallons of gas per line item.

Think like a business person, not like a plumber.

This is an overhead expense that will show up on some of your jobs but not all. You could track it as a a direct job expense, but you'd be pulling you hair out looking through a microscope at a fly. Swat the fly and quit worrying about how long its legs are.
 

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Discussion Starter #14
I've heard and believe it is probably true but don't know for sure that consumers using a cc on average will spend 17% more than those using cash (I think it was Dave Ramsey)! Ok so the cc company wants 3% of the sale (this is high by the way, I'm paying about 1.75% on swiped transactions), so if customer A spends $250.00 and Customer B spends 17% more or $292.50 but then you subtract 3% from customer B's ticket you get $283.73. You just made an extra $33.73 on that ticket.

How many tickets would you like to make an extra $33.73 on?

This requires no more thought on your part. Start taking them.
You are right! I'm just being a teenager tonight. :cry:
 

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Oh Boy ,,, Now I gotta deal with crying ??? Stop it !

Look at it this way ,,,,, Would you leave $ 1,000 on the table for $30 ??

Customers like the simplicity of using a cc. It costs a little bit but it is easily figured into the job total . GO for it !!
 

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Discussion Starter #16
I get it!

Okay, okay. I get it! I always kinda got it anyway.

You probably thought I was hormonal - I did too! Then it occured to me, the DEMOCRATIC CONVENTION LOVEFEST is getting to me.

Everytime I hear a speech about how much more the government wants to do for the little people:eek:, I start feeling poorer & poorer.

Feeling better this a.m., now I know why.

For the record, I don't care for McCain. BUT much better than the alternative.
 

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I've heard and believe it is probably true but don't know for sure that consumers using a cc on average will spend 17% more than those using cash (I think it was Dave Ramsey)! Ok so the cc company wants 3% of the sale (this is high by the way, I'm paying about 1.75% on swiped transactions), so if customer A spends $250.00 and Customer B spends 17% more or $292.50 but then you subtract 3% from customer B's ticket you get $283.73. You just made an extra $33.73 on that ticket.

How many tickets would you like to make an extra $33.73 on?

This requires no more thought on your part. Start taking them.
HEY SMELLS, you know Dave Ramsey would'nt approve of this thread. RICE&BEANS MAN!:yes:
 

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Okay, okay. I get it! I always kinda got it anyway.

You probably thought I was hormonal - I did too! Then it occured to me, the DEMOCRATIC CONVENTION LOVEFEST is getting to me.

Everytime I hear a speech about how much more the government wants to do for the little people:eek:, I start feeling poorer & poorer.

Feeling better this a.m., now I know why.

For the record, I don't care for McCain. BUT much better than the alternative.
I think McCains VP running mate is HOT!
 
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