Should You Accept Credit Cards from Cleaning Customers?
As our society is becoming more and more "paperless," there are an increasing number of choices for your cleaning customers to pay their bill. Many people find that writing checks is becoming obsolete in a world of online banking, automatic payments, electronic checks, and debit and credit cards. Even carrying cash with you is becoming less important, as most businesses now accept debit and credit cards right at the checkout counter. What does this mean for you as a business owner? Most people like the convenience of paying with "plastic," but there are distinct advantages and disadvantages for you.
As just mentioned, the main reason people use credit cards is convenience. By accepting credit cards, you are making your customers' lives easier. Let's face it: most of your customers are using your service to make their lives easier. Paying by credit card is simply another time-saver for them. To make it even easier, you can set it up so they are billed automatically. Once set up, the customer has nothing to do other than receive their monthly receipt of payment. It is also convenient for you, as you have fewer administrative roles to perform compared to receiving payments with check or cash.
Another advantage to accepting credit cards is the likelihood of increasing your sales due to what is akin to "impulse shopping." If customers know they are delaying payment or spreading payments out over time, they may choose to have added services performed. Special projects or periodic work not normally performed are examples of such sales. Maybe they will want their garage cleaned out or their chandelier cleaned or windows washed. In this age of credit, human nature makes many people want "bigger and better," which holds true for the cleaning industry.
Your company's credibility is also increased, as many people see that accepting credit cards shows you are trustworthy, reliable, and reputable. Even if your customer prefers to pay by check, just knowing they have that option is a big plus. Also, just having a merchant account shows you are not a fly-by-night operation.
Lastly, credit card use decreases bad checks and collections costs. The use of credit cards somewhat "guarantees" timely payment from your customers. You no longer have to wait for the proverbial "check in the mail" or late payments. Cash flow is important in this business, since you still need to pay your bills and pay your employees regardless of whether the customer pays or not. Also, using a credit card can reduce the number of "slow payers" by allowing them to pay an overdue invoice by credit card over the phone rather than wait for them to pay in their usual method.
One disadvantage of accepting credit cards comes when a customer refutes a bill with their credit card company, resulting in what is known as a chargeback. Typically, the customer has up to six months to challenge a charge, at which point the credit card company will investigate the allegations and potentially "chargeback" your merchant account. Unfortunately for you, credit card disputes often side with the consumer.
Another disadvantage is the fact you must pay a fee to use your merchant account, which is based on a percentage of each sale. You need to make sure the financial benefit of increased sales outweighs these costs. Also, there may some lag time between when you process the transaction and when the money is actually posted to your checking account, usually a day or two.
Your Merchant Account Provider may also hold back your money for various reasons. When you apply for a merchant account, you need to provide them with various types of information, one of which is your expected sales volume. If there is an unexpected or unusually high volume of sales, they see that as a "red flag" and may hold off paying you until they can confirm those charges are legitimate. The Merchant Provider needs to protect their own interests by trying to avoid fraudulent transactions.
Many find the advantages of accepting credit cards outweighs the disadvantages. You need to decide this for your own company based on your individual circumstances, but in this ever-growing paperless world, jumping on board seems a logical decision.
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Jean Hanson helps owners of residential cleaning companies build a more profitable and successful cleaning business through her online community at MyHouseCleaningBiz.com. Read inspirational cleaning success stories at http://www.cleaning-success.com, and sign up for House Cleaning Profit Tips at //www.myhousecleaningbiz.com.
