During these challanging economic times we all are looking for ways to get by, here at Best Merchant Rates we see this daily with our merchants. New businesses that need to accept credit cards are struggling with the astronomical costs in just getting their business up and running. A new terminal that is necessary for credit card processing can run anywhere from $200 up to $800, this is an extra expense that we can assist with, how about leasing??? The lease is by far the best route to go, why? First of all the cost is spread out over months rather than due upfront and when you lease you are eligible for a 50% rate reduction. Secondly, the monthly cost is a fantastic tax deduction. When you lease a terminal at Best Merchant Rates we include a full replacement at any time, this is a huge consideration if you were to purchase a terminal and have any malfunction or damage to the terminal you will have to send the terminal back to the manufacturer for repairs. This timeline for repairs can take weeks!! How can you accept credit cards if your terminal is gone for repairs? Imagine the business that you could lose!

Leasing Benefits:
*Rate Reduction
*No upfront costs
*Fixed low payments
*Tax deductions
*Guaranteed replacement of any defective terminal
*Own the machine at the end

Why are leases even offered when you can purchase the terminal for a flat rate? Why would you want to pay $20 – $40 per month for 48 months for a lease. The answer seems pretty cut and dry, right? Well…not really. Let’s take the obvious answer first. Let’s take a $20 lease for 48 months for a terminal like the Aqua. Do the math…once the term of the lease is up you’ll be paying $960 for the terminal when you can pay the purchase price of $200 – $300 (depending on the processor’s mark up). You’ll be saving anywhere between $760 – $660 if you purchase the terminal. Although this initial thought may be true, most people don’t take into consideration the package that goes along with the lease. The benefits of a lease are bound to save you WAY beyond the $760 – $660 that a purchase price will save you. How so? Let me explain.

First of all, a lease is always done on new equipment. You avoid the possibility of getting a used and visibly worn terminal. Second, a good processing company will offer a maintenance or warranty program with the lease. If something happens to your terminal during the lease period, you simply return your faulty terminal and it is replaced free of charge. This benefit is particularly beneficial for wireless terminals. If your business requires you to travel with your terminal, you might want to make sure that your terminal has some type of warranty or maintenance guarantee in case something happens during transit or while processing transactions. If you drop your terminal or it gets damaged during your travel and you don’t have coverage, you’re going to have to dish out another $800- $1000 for that terminal. A lease of $40 a month for a wireless terminal is good insurance and good piece of mind. Last, and most importantly, a reputable credit card processor will offer a rate discount with a lease. So not only are you receiving a new terminal, warranty/maintenance program with that terminal, but now you are buying down your rate which could save you way beyond the cost of the lease. Keep in mind that the rate discount probably extends beyond the term of the lease. Once the term of your lease ends, you still get to keep the discounted processing rate. For example, if you typically process $10,000 a month and you purchase a terminal, a good rate would be somewhere around the neighborhood of 1.25%, however if you lease the same terminal your rate would be .49%. What are the cost savings to you on a monthly and annual basis? The 1.25% rate would cost you $125 a month while the .49% rate would cost you $49 a month. Over a year you would save $912 on the rate alone going with a lease. Over the term of a 48 month lease, you are saving $3,648 on your processing rate. So let’s review…
If you purchase a terminal at a flat rate of $200- $300:
1. No warranty/ maintenance program
2. You don’t receive the rate discount.

If you lease a terminal at $20 a month for 48 months:
1. You receive a warranty/ maintenance program for the life of the lease.
2. You receive a brand new terminal.
3. You receive a rate discount which could save you $3,648 on the processing rate over the life of the lease. But remember…the rate discount continues beyond the life of the lease…so your savings will continue even after your lease has ended.

To sum up…it may seem like a no brainer to purchase a terminal rather than lease, but you have to take into consideration all of the benefits that a lease could include. Don’t assume that all processors provide all of the above listed benefits. Ask questions and do your homework. However, any reputable company who truly wants to provide their merchants with the best service will include all of the above listed benefits as a package with the lease.

I was talking to my friend the other day who works as a manager in a retail store. She has been having problems with her employee’s drawers not balancing at the end of the night. At times the difference is minimal, but on occasion the difference is significant. All of these differences added up during the year and came in at a significant loss to the company. During these times of economic hardship, it is crucial for businesses to minimize losses. In talking to her about her employees, I mentioned to her that she might want to push credit card transactions with her customers in order to help avoid the following cash losses.

First, and most commonly, are the human errors which get committed quite frequently. For example, how many of you have ever been in a similar situation whereas you give an employee a $20 bill for a $10 transaction and have received $15 back? It’s happened to me more than once. How many of your customers are aware that they’ve received too much money back or even have enough integrity to give back the difference? Keep in mind that this type of error can be omitted during a credit card transaction. The employee simply enters the transaction amount into the credit card terminal and, once the transaction is approved, the transaction is complete. No money to exchange, no potential for error in the exchange.

Second, and most dreadfully, are either employee theft or robbery. Other than having a surveillance camera on your employees 24/7 or a guard standing at the entrance of your store, there is no real way of making sure that this doesn’t happen. Pushing credit card transactions with your customers makes it easier to maintain a smaller amount of cash in your employee’s drawers. This helps with employee theft because a minimal amount of cash in their drawers makes it more obvious when an employee slips a bill into their pocket. If most of the transactions were electronic for the day, then there really shouldn’t have been room for error. In addition, it lowers your liability during a robbery. In case of such a situation, the assailant will get away with a minimal amount of cash if you limit the amount available in your employee’s drawers.

Obviously her next question was, how do I push credit card transactions over cash transactions. I told her to post a notice in her store stating they do not accept any bills higher than a $20 and to make it a policy with her employees to not hold anything higher than $100 in their drawers at any given time. Amounts in excess of $100 should be deposited into the company safe (which only managers and owners should have access to). She’ll have to do random audits on her employees drawers (during slow periods) to make sure they are abiding by the policy. Of coarse the bill and drawer limit will vary by store based on your average transaction, however find the amount that will not inconvenience your customers but will protect you from error or theft.

Although it is impossible to avoid all employee errors, pushing credit card transactions can help avoid the above. The handling of cash and the temptation of stealing is minimized.