You, “Oh, I’m sorry. We don’t take credit cards.”
Me, “Why not?”
You, “Well, the credit card company adds 3% to every purchase.”
Bottom line: If you don’t take a credit card, or debit card, I am not going to buy from you. I haven’t carried a checkbook in over 10 years. I love the benefits – airline miles, good audit trail, consumer protection, insurance benefits – that come from using my credit cards. And, if you had incorporated that 3% into the Selling Price of that thing, I wouldn’t even notice it. I would have that thing by now, and you would have made a Sale.
Too many of my consulting clients still don’t take credit cards. Quit resisting and help yourself, and your customers. Here are 4 ways it pays to take credit cards as payment…
- Higher Sales. People spend more when they use their credit cards. Dunn and Bradstreet found that on average people spend 12-18% more when then whip out the plastic. Credit cards make it easier to say, “Yes!” If you really want to be of service to your customers, don’t make it hard to sell them what they want.
- Lower Accounts Receivables. Once upon a time, Sales mentor Harry Friedman (@HarryJFriedman) taught me, “Sell stuff to people. Take their money…now. They’ll make more.” It’s true. You are not twisting anyone’s are when you ask for the Sale. You are just offering your wonderful goods and services…things. If they want the things you sell, take their money…now. They will make more. And then you won’t be stuck with an I.O.U. and all the expense of trying to track them down and get the money later.
- E-Money is Easier to Track. You can slide the cards with a Square™ or other instant collection system on a smart phone or tablet. The money is on its way to your checking account. No need to stop by the bank and make a deposit. You and your customers have a lovely audit trail of the transaction, too. Less time spent on invoicing and statements. Also, the world is moving to digital wallets and pre-paid credit cards. It is of benefit to your customers when you keep up with payment trends and options.
- Every Expense is an Opportunity for Profit. When you absorb the cost of the credit card fees, you are entitled to increase your Selling Prices to cover that cost…plus profit. My Financial mentor, Frank Blau, taught me that every expense generates profit when I am pricing properly. The basic Selling Price formula is to add all costs of doing business and divide by the number of things you sell. Then, inflate that “break-even” amount with your desired amount of profit. That’s Business 101.
I like to use my Visa Business card and I pay off the bill, in full, every month. I don’t want to finance the purchase, I can use my debit card. It’s my job, not yours, to manage my credit and debt. Don’t think you are doing your customers a favor by neglecting to take credit cards. You are stopping them from buying your things. And if your things are terrific, that is really a disservice.
Take the money. Now.