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Taking Credit Cards

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Greg Ball
Taking Credit Cards
on Mar 6, 2008 at 10:36:03 pm

We run a small company with mostly corporate clients. Most of our payment comes by way of invoicing them and receiving their check.

I've had several folks/companies who need to pay us a deposit to get started. Once in a while they ask if they can pay us by credit card. We don't take credit cards, as we don't get enough requests to pay an annual fee for a merchant account. We do however take PayPal payments. The problem is PayPal charges us a fee. ad then we have to move payment from PayPal into our bank account. We pass the PayPal fee onto the client.

My question is what do you smaller production companies do? Is it okay to charge people a fee? Right now I have a client with a $25,000 project which would mean I need to pay PayPal about $750. Any thoughts? Thanks.


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David Roth Weiss
Re: Taking Credit Cards
on Mar 6, 2008 at 11:11:51 pm

[Greg Ball] "I have a client with a $25,000 project which would mean I need to pay PayPal about $750. Any thoughts?"

Its pretty simple Greg, you either choose to get the money in a minute and pay for that priviledge, or you get it sometime down the line in the mail without the tarrif. Its up to you to decide if its worth it. I like the security of having nearly the whole bundle in my account instantly, and PayPal charges are a tax deductable expense.

David Roth Weiss
Director/Editor
David Weiss Productions, Inc.
Los Angeles

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A forum host of Creative COW's Business & Marketing, and Indie Film & Documentary forums.


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Greg Ball
Re: Taking Credit Cards
on Mar 7, 2008 at 4:25:20 pm

Thanks David. Not quite that simple though. Often the client can just write a check and we have time to deposit it and make sure it clears. The quick turn arounds are usually because the client delayed their decisions to move forward for whatever reason. You're suggesting that I eat an additional $750 PayPal fee because the client is late? I'm not sure I get that.

Good to know about tax deductions for PayPal. Thanks for that info.


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Rennie Klymyk
Re: Taking Credit Cards
on Mar 7, 2008 at 9:12:25 pm

Most major credit cards also charge a percentage similar to paypal so you get hit either way. With credit cards if you do a large volume their percentage is lower.

Credit cards are almost a "must have" as many expense accounts are set up on credit cards. The company officials you deal with can be quite put off if they can't use their card with you.

It's worth adjusting your prices to accommodate the credit card and/or paypal fees.

"everything is broken" ......Bob Dylan


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Greg Ball
Re: Taking Credit Cards
on Mar 7, 2008 at 9:16:36 pm

Again Rennie...it's a very low volume of clients that request credit card payment. Large corporations don't typically use credit cards for video services. They use P.O.'s and checks paid by invoice. Raising my prices penalizes just other clients who pay by check. What do you do?




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walter biscardi
Re: Taking Credit Cards
on Mar 7, 2008 at 9:38:05 pm

[Greg Ball] "Again Rennie...it's a very low volume of clients that request credit card payment. Large corporations don't typically use credit cards for video services. They use P.O.'s and checks paid by invoice. Raising my prices penalizes just other clients who pay by check. What do you do?"

You charge a service fee for the use of credit cards. We're considering taking credit cards right now and we'll charge a 3% fee for accepting the cards.

I've checked in to other production companies and pretty much all of them do this. You don't penalize the other clients for accepting the cards. You simply charge a "convenience" fee for covering the costs of the card processing.

Walter Biscardi, Jr.
Biscardi Creative Media
HD and SD Production for Broadcast and Independent Productions.

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Greg Ball
Re: Taking Credit Cards
on Mar 7, 2008 at 9:54:46 pm

Thanks Walter...I'm wondering if it's legal to do that though. A restaurant can't legally charge you an additional fee if you pay by credit card instead of cash. That's my confusion.


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John Baumchen
Re: Taking Credit Cards
on Mar 7, 2008 at 10:07:51 pm

Call it a 'processing fee, conveninece charge, admin fee...', I've checkd with the credit card companies about this issue, (me being the one charged the extra), and their position was "who cares".




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walter biscardi
Re: Taking Credit Cards
on Mar 7, 2008 at 10:26:14 pm

[Greg Ball] "Thanks Walter...I'm wondering if it's legal to do that though. A restaurant can't legally charge you an additional fee if you pay by credit card instead of cash. That's my confusion."

Absolutely they can, and I have seen restaurants that do this. They used to be cash only, but for "convenience" they'll now take credit cards.

anyone can so long as you are absolutely up front about it and don't try to hide the charge. It will be a processing fee here.

Walter Biscardi, Jr.
Biscardi Creative Media
HD and SD Production for Broadcast and Independent Productions.

STOP STARING AND START GRADING WITH APPLE COLOR
The new Color Training DVD now available from the Creative Cow!

Read my Blog!


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Rennie Klymyk
Re: Taking Credit Cards
on Mar 7, 2008 at 10:09:49 pm

[Greg Ball] "Again Rennie...it's a very low volume of clients that request credit card payment. Large corporations don't typically use credit cards for video services. They use P.O.'s and checks paid by invoice. Raising my prices penalizes just other clients who pay by check. What do you do?
"


The PO/invoice is mainly how it works for me. 3 years ago I went from a large limited company to a "just me proprietorship" and in the process closed my bank accounts and have spent 3 years with no credit cards. This has been a problem for me many times so I likely will re-link with visa again at least. (I used to use AMEX, Master Card, Visa and Diner's Club.)

I get a lot of small bits and pieces of government and corporate projects in the $300.00 to $1500.00 range especially now with internet video and dvd. This is typically where the credit cards are great and expected.

I do a number of annual events where I set up a booth and take orders for DVD's on site. If I have a wireless Bank Card/ Visa device there, I can increase sales by 20% and most others will use that form of payment rather than cash or check.

I realize this is a different market segment than you may work in so the credit card thing may not work for you. I know I myself need to re-set up for bank/credit cards sooner than later.

On my accountant's invoices he has a 1st total for payments received within 1 week with a 3% reduction (all pre-calculated). Below that is the normal total in bold print if you don't take advantage of the early payment discount. Perhaps you could accept credit cards but offer a similar discount on the invoice for payments by check or cash. You would still be raising your prices to off set the credit account fees but you would not penalize those clients who pay by check or cash. The negative side of this is your price quotes look higher this way. I guess there is no easy solution.



"everything is broken" ......Bob Dylan


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Greg Ball
Thanks all!
on Mar 7, 2008 at 11:48:26 pm

Thanks


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