Credit Card Fees – Why You SHOULD Pay Them

Ed Note: Rebecca Joann Brumfield, LMT and owner/operator of Vida Pura Spa in Baton Rouge, LA and her staff of 8 practitioners are huge advocates of offering credit card payments. Brumfield is also an active Facebook Admin/coach/mentor with a group of nearly 3,000 licensed beauty professionals and a website at badassbodyworkers.com.   She had this to say in her group, and we’re sharing it here with you:

Since I have gotten several messages and read comments lately about spas/ LMTs/ self-employed practitioners complaining about credit card fees or not accepting credit cards at all in their business or CHARGING THEIR CUSTOMERS the CC fee…I have plenty to say!

First of all, passing along an extra charge to your clients paying by a credit/debit card just for the CC processing fees is ABSOLUTELY UNACCEPTABLE, no excuses. NONE. Like, ever. And also illegal in most states. I have been to a few business that made me pay the fee and I was PISSED and didn’t go back. Do you know what helps with that? Increase your rates. Build it into your service charge.

Secondly, let me break it down for you: YOU ARE LOSING CREDIBILITY BY NOT ACCEPTING CARD PAYMENTS. (Not to mention trustworthiness, convenience, professionalism, being legitimate, and referrals.) It’s not just credit card payments, but other forms of payments that are linked to credit cards and digital transactions (PayPal, ApplePay, DroidPay, Venmo, etc.) that COST your business if you don’t accept them.

Third of all…. Those therapists who give a discount to clients who pay in cash are making a mistake! Yeah, yeah, we all like cash. LOVE IT. I always tip in cash, but if I have to pay for my service in cash, I probably won’t tip as much as I would if I were to be able to put the service on my credit/debit card. And I might not even spend my money with you at all! Here’s an example: I was at an arts festival once, and my BFF wanted to buy a $350 painting. The artist had a Square, so I know the processing cost. It would have cost the artist about $9 to sell the painting and make a $341 profit. (OR she could have just charged the painting at $359) But no! She told my BFF she would prefer cash, and to go to the ATM and take out the cash instead. The ATM wasn’t with my friend’s bank, so not only would she have had to pay $5-6 to withdraw cash, but she also was awaiting money that was coming the next week, so she could only put the charge on her CC. I literally told the artist that she is throwing away $350 just to save nine bucks and as a small biz owner, it made ABSOLUTELY ZERO SENSE why she would punish a customer and lose out on a sale. But she did that day.

Same thing with massages…I can pretty much guarantee that your clients who pay in cash would double or even triple what they spend with you if they could put their services or packages on a CC. Today I sold a $400 package (a 4-pack of 60 min massages) and it cost me $11 to pay to the processor. This same clients also earns points on his CC every time he uses it, and he is able to redeem those points for SpaWeek cards for his daughter as well. It’s a double win! He also tipped me on this transaction $86 (and I can guarantee if I would have said “Oh, it will cost $XX extra to process this on your card” he wouldn’t have thought to add a tip.) One more–for the therapists that give a discount of 5% or even 10% to clients for paying in cash…just accept the cash! WHY discount it at all, especially if you are taking a bigger cut than the CC fee?

ALSO I’m no tax/financial person, but you legally have to claim all your cash earnings anyway, and trying to fudge that results in problems down the road. Believe…when your tax return is audited, cash-only businesses do not do well! And what if you want to buy a building, get a credit line/capital for our business, establish a history/credibility, buy a house/car, etc.? We have to prove our income and earnings. Not only will you earn more by accepting cards, you’ll have the financial records to substantiate them.

This is not a hard thing to accomplish. Square even has their basic processing device for free. Other companies do, too. Today’s rates are reasonable. Not to mention, if you are with the processing company for a certain amount of time, you are pre-approved for a credit. Square was able to give me a credit which I needed to get my new spa up & running. My business is thriving in a new location…and I feel it’s all because I decided to start accepting CCs at my business 6 years ago.

Here are some stats I pulled from Forbes:

> 55 percent of the nation’s 27 million small businesses do not accept credit cards

> Of those, it’s averaged at $100 million potential earnings lost by being cash-only

> 66 percent of all point-of-sales (POS) transactions are done with plastic – credit, debit, or gift cards. That is a lot of sales for millions of businesses to miss out on.

> Only 27 percent of purchases are made with cash.

> Cash sales will drop to only 23% by 2017.

> 58 percent of small businesses are regularly asked by their customers to accept credit cards.

The benefits of accepting credit and debit cards far outweigh the cost.

When people are given more payment options (beyond cash); they are more likely to make impulse purchases, join loyalty programs, and spend more per purchase – and that can only help your business to grow.

I encourage those who are a CASH ONLY business to take a leap and start accepting credit & debit cards. It’s a cost of doing business. It’s a tax write off. It is earning potential.

More stories with additional points to consider:

From Square: Why Every Small Business Should Accept Credit Cards

From Due: Accepting Credit Cards 101