Credit Card Pros & Cons

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Credit Card Pros & Cons

Postby djmc » Sun Oct 09, 2005 5:22 am

Moderator's Note:

This thread was split off of the Multi-Op thread.

-----

len wrote:
djmc wrote:I WON'T DO A GIG ON THAT BOAT FOR LESS THAN $800.
[ snip]
I told her I'd give her a "special discounted rate" of $699.
(assuming she will forfeit a retainer from the other guy)


:?:

And chances are, the other dj company will try and enforce the "if cancelled within 30 days, full payment is due" clause in their contract.


ya know, a smart customer could just do a "Charge Back" on their visa, assuming they paid the out-of-staters with a CC.
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Postby DJ Iron Mike » Sun Oct 09, 2005 6:52 am

Yet another reason why I have opted against using credit cards for the time being.
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Postby Dave Miller » Sun Oct 09, 2005 8:33 am

Around 20 years ago, when I had my first contract reviewed bymy lawyer, he told me not to take credit cards. He also told me not to take cash or money orders for the deposit.

He said, particularly for the deposit, get a check that has the customer's name & address, and make sure the signature on the check matches the signature on the signature on the contract. It provides corroborating documentation in case I need to go to court to enforce the contract.

And that is the only reason I do not take credit cards.
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Re: Credit Card Pros & Cons

Postby jwg » Sun Oct 09, 2005 10:47 am

Question:

Has anyone here that accepts credit cards through PayPal or a merchant ever had a charge back?
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Postby DJ Iron Mike » Sun Oct 09, 2005 6:13 pm

I have heard of it happening especially with Paypal. Bridezilla's pantyhose starts bunching up on her then she goes and does that, and then to top that off it's all over the Knot that she did it!
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Re: Credit Card Pros & Cons

Postby BillESC » Sun Oct 09, 2005 10:52 pm

We've had a couple of chargebacks but then again, our average daily credit card/Paypal charges exceed $ 3000.00...

We've had more bounced checks than chargebacks.
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Re: Credit Card Pros & Cons

Postby Johnny Dee » Sun Oct 09, 2005 11:00 pm

We use PayPal and never had a charge back.
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Postby CJ Greiner » Mon Oct 10, 2005 9:21 am

From my understanding of the process... chargebacks don't simply "happen" just because the customer requests one.

The customer has to have a legitimate complaint.
The CC company has to notify the merchant and give them time to respond or correct the situation with the client.
If the merchant doesn't respond with proof-of-sale or proof-of-service, THEN the CC company will complete the chargeback against the merchant.

... of course, that's the ideal situation. How it's really dealt with can depend on the issuing credit card company as well.
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Postby Dave Miller » Mon Oct 10, 2005 10:07 am

CJ -

You're describing the ideal situation - which most CC companies follow, or at least come close to following.

PayPal is an entirely different story. Although things *MAY* have changed, PayPal's past is very tarished. There are stories of minor customer complaints resulting in a merchants entire account (not just the amount in dispute) being locked for months, and sometimes years.

The obvious reply, "What?... How?..." can be answered by this simple statement: PayPal, essentially, is unregulated banking.
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Postby djdonny » Wed Oct 12, 2005 8:18 pm

I allow PayPal or use my own CC processor (besides cash/check/etc), but 90% of my clients pay by CC, not through PayPal. In over 10 years I've had no chargebacks, but did have a couple of checks bounce early on -- before I required payment in full one month prior.
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Postby Proformance » Thu Oct 13, 2005 10:17 am

CJ Greiner wrote:... chargebacks don't simply "happen" just because the customer requests one. The customer has to have a legitimate complaint.


A deposit or retainer collected by credit card would qualify for an automatic chargeback, no legitimate complaint needed. All that is required is for the cardholder to question the charge.

Most retail merchant agreements do not allow cc's to be charged for retainers or any type of security deposit. Only pre-authorizations can be used in that way. (A pre-auth. is not a charge but rather a "hold" for a limited period of time on a certain portion of an available balance.)

Chargebacks are always an issue. But credit cards are for the convenience of the buyer. Everytime you increase customer convenience you increase your risk. The goal is to have the increase in sales as a result of the added convenience out-weight any losses incurred by the same process.

For most DJs, the volume of sales is relatively low (50-100 events). But on the other hand, you often have the chance to meet and evaluate customers in a way over-the-counter merchants do not. Whether or not you accept credit cards is a matter of how well you trust your clients, and whether or not you can eat the potential loss.
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Postby Dave Miller » Thu Oct 13, 2005 10:33 am

Performance -

You make some valid points. I'm starting to think more of the advice of that lawyer who told me long ago that, particularly for the deposit, to get a check. It provides corroborating documentation in case I need to go to court to enforce the contract.

On the other hand, I haven't needed to enforce the contract in court in 22 years. So maybe I should lighten up....
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Postby Dj Sean » Fri Apr 21, 2006 10:48 pm

I agree with proformance, your benefits must out weigh your losses. I and have used Paypal without problem for 2 years. And I allow the remaining balance to be payed on the day of the event but if must be cash. I think this shows clients that I will be there the day of and in most cases my clients want to pay up early just so they don't have to deal with it at their event.
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Postby djdonny » Sun Apr 23, 2006 12:39 pm

You guys are leaving out perhaps the only reason I would give up CCs -- fees! CC processing fees have gone up (especially for business cards). And yet, CC processors do not allow you to offer "cash discounts" to clients (it's a violation of their terms). But needless to say, checks and cash come with NO FEES.
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Re: Credit Card Pros & Cons

Postby Joseph Ivy » Thu Aug 17, 2006 7:05 pm

I have never had a charge back, but I think that you guys have some serious errors in you postings. However, I am a novice at this credit card stuff and don't want to put out a bunch of information that isn't true. I'm going to have to do some serious research on the subject.

Thanks for bringing it up.
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Postby srothkin » Fri Aug 18, 2006 4:30 pm

When I first started accepting credit cards, I increased my rates across the board by (much) more than the expected fees. So the amount I lose to fees (which so far has been in the range of a few hundred dollars per year) doesn't bother me.

I have my own merchant account to process credit cards directly, so I don't have to worry about paypal's shenanigans.

I find credit cards work especially well for last minute bookings. I fax the customer a contract and payment form, they fill out and sign and fax back to me.

I've been accepting credit cards since 2000. Never once had a chargeback.
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Postby Xtreme Productions » Thu Oct 19, 2006 10:18 pm

as long as you have a SIGNED reciept from the customer your fine on charge backs. i use paypals virtual terminal which does not require the actual credit card to be present but what i do is run the actual card through a knuckle cruncher machine and have them sign that copy with the total written on it. i know its a little out dated but the CC companies will accept these as reciepts and the customer will not have a leg to stand on if they use the excuse that they did not purchase this...
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Postby Digital Scott » Mon Oct 23, 2006 12:46 pm

I have used a CC Co. but never really had any call for it.. so I stoped using them.. I am now thinking about using Paypal.
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Postby pjlowe » Mon Oct 23, 2006 1:48 pm

I have a paypal account. it costs $20/month plus credit card charge.
I only use it for 1st payment or my kids party pkg. so I pay approximately $6.00 for a c.c. fee on a $250.00 charge.
I think it's worth it.
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Postby CJ Greiner » Wed Nov 08, 2006 12:25 am

My Sunday night wedding client wrote her last check to the photographer... so I used PayPal's virtual terminal to collect the balance right there -- worked great!
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