How to Get a Merchant Account, Part 2

You’ve checked with local banks and have found that none offer merchant accounts, or maybe some do, but you want to investigate more opportunities. What other companies provide this service?

Costco is one company that makes merchant services available to their executive members. This information is listed under the "services" link at the top right corner of their site. BJ's Wholesale Club also offers merchant services, but I didn't see anything listed on the Sam's Club site.

Not a club member? Quicken.com provides insights into opening a merchant account. You can also seek a reputable source by asking small business owners and others whom you trust for references. This could include:

1. Members of organizations you’ve joined. Who processes their transactions? Where are these merchant account providers located, and what are the costs?
2. Organizations that offer benefits such as credit card processing. This includes chambers of commerce, retail associations and home business groups.
3. Artists exhibiting at local craft and business fairs. Some of these individuals will gladly share information about the company that processes their transactions. Look for booths displaying credit card logos.

Since artists are selling outside of their offices, this would be a good time to ask how they process transactions while in a booth. Not all merchant account companies provide this flexibility, so these travelling sellers are the best people to query.

Years ago, I noticed that many small businesses only accepted the American Express (AmEx for short) card. I was told that the AmEx application approval was easy. When a customer presented his or her card, the business owner would call the AmEx approval center to speak with a representative who approved or denied the transaction. Calling for approval by phone results in a higher transaction charge, but since there were no per-month charges associated with the account, it was seen as an affordable option. There is no such choice through Visa and MasterCard.

Does the Discover Card allow you to take orders in the same manner as AmEx? There’s only one way to find out. Visit the American Express and Discover Cards' merchant sites for details.

Do you charge customers who pay by cash one price and others who pay with a credit card a higher price because of the fees? No, and there may be a law against this. Your prices must incorporate all fees associated with the sale, no matter how the customer pays. A $50 basket is $50, not $55 if a person pays using Visa. When was the last time you went into a store and saw a two-price structure on the merchandise?

The bottom line is that you are the only one who knows whether it’s time to offer your customers another way to pay for their gift baskets. If you’re ready, you will have to do your homework and find the best service for your circumstances.

There’s only one reason for the credit card dilemma: this option involves an expense, a new cost that you must pay every month, whether you process one sale or 100. Answer these four questions honestly:

1) Do you want to provide your customers with another payment solution?
2) Are you ready for your business to grow?
3) Do the benefits of adding a merchant account outweigh the costs?
4) Is being in business really for you, or do you want to occasionally make gift baskets for friends and family?

It’s okay if you decide to not to apply for a merchant account. Many designers do, and some don’t. Buyers also make choices; some choose to only do business with companies that accept credit card payments. Perhaps your baskets will become so revered and highly recommended that buyers won’t care that you don’t accept credit cards. You just might be that lucky.