Some business owners are penny wise and pound foolish with their credit and debit card policies. Even worse some do not even accept credit cards. Here is why you should review your credit card policies:
Higher Purchase Amounts: Statistics show that when consumers use a credit or debit card it increases the amount of their purchases. Several studies show an increase of approximately 10% to 15%, but when the purchases tend to be small the increase in purchases can easily climb to 50% or more. Why do you think McDonald’s and other fast food restaurants started to accept credit cards? I believe McDonald’s shows an increase of over 50% for customers that use a credit card. That is why a business should never place a minimum for credit cards either due to this phenomenon. On the flip side, this is why I advocate that consumers use cash!
Convenience Factor: Recently, I went to a really good burger place that I knew doesn’t take cash, and if I didn’t have any cash on me I would have went somewhere else. To make matters worse, the man in front of me placed a fairly large order and was told that he had to walk across the street to get cash from the closest ATM. I wonder how often he will go back there but, the business saved approximately 3% plus $.25 of transaction fees. Next time they will save the transaction fees, but lose the sale.
You Actually Get Paid: Businesses need to get paid to survive, which is why they should accept credit cards. If a customer has an outstanding balance, then it may be easier for them to pay with a credit card.
Businesses may be able to mitigate credit card fees by implementing a few strategies. First, they may be able to charge a surcharge when a client uses a credit card, secondly, they can accept ACH’s, which have lower transaction fees, and lastly, they can shop around for lower-cost processors, such as Square.