There’s a very simple rule of thumb when it comes to leasing credit card terminals. Don’t do it. This is the biggest rip off in the industry and one of the main reasons for the negative stigma attached with processing.
Most merchants have sat down with a sales rep and been shown a slick lap top presentation that shows how much better the new low qualified rate you’re being offered is than your current rate. They guarantee debit savings and an increase in business by….wait for it….placing Visa and MasterCard stickers on your windows and doors. The end of the presentation comes with an impressive number that this new set up will save you (let’s say the provider says they can “save” you $ 200.00 month). But wait, there’s more. Out of these savings the provider is going to take back a set fee every month to pay for the new terminal they’re giving you(let’s say this fee is $ 60.00). So your total savings is $ 140.00 a month AND this new terminal will be replaced if anything happens to it and updated when new technology comes out! Here’s the catch. To get all this you have to sign a five year lease.
Now let’s do some quick math. You’re paying $ 60.00 a month for 60 months. That’s $ 3600.00 for a terminal that costs $ 200.00 if you buy it outright. This is where the sales rep begins to convince you how great their customer service is and how responsive they will be if you have any problems. They may go as far as to give you a guaranteed number of new terminals you will receive because of advancing technology.
How do you avoid a lease scam? There are some very simple principles.
1. If a company is requiring or strongly suggesting a new terminal either take them out of consideration or Google the terminal they are trying to sell you to see the actual cost.
2. Don’t do business with any company not offering interchange plus pricing.
3. Always make a sales rep show you on paper how they got the amazing savings they are offering you.
4. Check the company’s website you’re doing business with….if they don’t have one refer to the rule of thumb in the first paragraph.
There are numerous companies pushing leases every day. The only reason to buy a new terminal is if your existing terminal is broken or out of compliance (go to http://www.pcicomplianceguide.org if you have questions). Remember, the main thing to know about leasing a terminal is DON’T DO IT. Call an industry expert with any questions you may have. Until next time, consider whose bottom line your provider is protecting…..if it’s not yours….it’s time for a change.
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