Posted by Anne_ND on July 18, 2007 at 08:18:56:
Hi Adam,
My understanding is that when a dispute happens, they don’t evaluate the credibility of the dispute, they just take back the money. Ultimately the person who disputes a rent payment for money owed would lose, but in the meantime (and the wheels of justice move slooooowly) you would be out the funds.
Anne
accepting credit cards?? - Posted by Adam (IN)
Posted by Adam (IN) on July 16, 2007 at 20:30:37:
ive been considering accepting credit cards and basically i have a 2 part question
pro’s and con’s (mostly con’s if you know any as i can see most of the pro’s)
also some personal experiences from those who have done this about what it’s like
ive been quoted by some companies at 1.69% charge w/ some having like a 15 cent charge per batch and some have like a $15 annual fee which is not big deal and almost all are offering free units, customer service, etc. so on one end i see very little cost to accepting credit cards but the cynic in me says “this seems to good to be true”… wondering if there are some other fees/costs that may either be hidden (by the company offering the unit) or that i may not have thought of in general that are associated with running the unit or maybe a spin-off effect associated with accepting them
thanks…
Re: accepting credit cards?? - Posted by JB
Posted by JB on July 30, 2007 at 14:03:57:
Adam,
There is a lot of banter here about this subject, some of which is true and some is not. I have worked as a sales rep for four years now in the bankcard industry and could help you figure this out, and give you the straight answers about processing instead of the conjecture from some former merchants that you are getting here. Let me know if I can be of help.
Jason
Setting people up for failure - Posted by Ryan (NC)
Posted by Ryan (NC) on July 18, 2007 at 15:51:07:
Even if everything goes ok and you never have a problem IMHO you’d be setting people up to fail by allowing easy access to CC payments for regular payments… risky for down payment money but I’m sure it happens via CC advances which can be done by them at any bank.
Why do I think it’d be setting people up for failure? Let’s take a 36 month note payable $250 a month and brainstorm it using a CC… $250 payment on CC and the buyer actually pays lets say $175 cause they’d rather use the money for something else, what happens? Their CC balance goes up by $75 resulting in their payment going up by lets say $2.25 ($75x.03) next month the same thing except now the new charge is $75-1.13 (payment less 18% interest) =$73.87 compounded over the term of the loan the balance on the CC will be roughly $3000-3500 and their payment is up by $100 or so and will take 20+ years to pay off in all likely hood.
I think this is a likely scenario with one exception, people will skip entire payments to go on vacations etc. and the ratio paid will likely decrease as the total CC payment increases. I know they could put most of the items they’d buy on a CC anyway but I’m not going to be the one to add fuel to the fire. Putting people in this position is asking them to fail along with anyone that they owe money too, that’s my 2 cents.
Best wishes,
Ryan Needler
Re: accepting credit cards?? - Posted by Luke-MN
Posted by Luke-MN on July 18, 2007 at 05:13:20:
Here is an alternative. Automated checking withdrawals from your buyers bank. I believe it is called a ACH withdrawal. Need to check with your bank. You probably have some on your account if you have any auto-pay bills. I am just setting this up with my credit union. $20/month. Cheap $$. Won’t be for everyone, but it will ease collections.
Re: accepting credit cards?? - Posted by rise2it(VA)
Posted by rise2it(VA) on July 17, 2007 at 18:32:49:
To accept payments from tenants? No way.
Too easy for them to do a chargeback 2 or 3 months later when they get hard up for money.
Understand that when that happens (visa/mc especially), they automatically take the money back out of your account until the dispute is resolved - meaning, even if you win, your money is going to be tied up for a while.
I’ve done over a thousand cc transactions a month for the last decade - trust me, there are tons of ways for YOU to get screwed.
I would never do it for rentals or lonnie deal payments.
Re: accepting credit cards?? - Posted by Lin (NC)
Posted by Lin (NC) on July 17, 2007 at 06:31:55:
Your rates seem to be very low. We were quoted 2.19% with a $.24 charge, a monthly fee of $10. I would like to know who quoted you this so I can give them a call.
As for accepting cards for MH payments or rentals, I dont’ know how cost-effective it would be. Most tenants I’ve had didn’t have checking accounts, let alone a credit card! I’m setting my cc stuff up for self storage - very different tenants.
Lin
careful on ACH - Posted by JD (QC)
Posted by JD (QC) on July 19, 2007 at 19:15:02:
When it works it’s wonderful, but when they don’t have the money, you get hit with the fee’s… Then when they leave you have to cancel. I really like the idea, but I don’t have enough people with solid checking accounts that always have the money on a given date to make it work!
JD
i understand the disqute thing but… - Posted by Adam (IN)
Posted by Adam (IN) on July 18, 2007 at 05:55:05:
that seems almost impossible to dispute because the way i understand it, disputes occur because people have their credit cards or identity stolen and the theives use the information to buy THINGS, stuff of value, things that can benefit them immediately or that they can sell for cash
what dispute could there be for making your payment? do you think someone would steal one of my residents credit cards and come pay thier rent? i mean come on there’s no benefit, any dispute would be almost commical plus there’s the contract that they have signed to match it up with showing what they owe and finally thier signiture on both the receipt and the contract
maybe im missing something (and if so im absolutely all for hearing how) but i see no possible way to get burnt on a dispute in this situation
appreciate the discussion as i really respect a lot of your opinions and want to hear more of your input before i make any decision on this…
Re: accepting credit cards?? - Posted by JB
Posted by JB on July 30, 2007 at 14:01:36:
Hi Lin,
If you would like, I could quote you on your card acceptance. I work for the 5th largest actual processor in the country (not a re-sale organization). Your rate will be dependent on your volume and also your method of accepting the cards. One thing that everyone here is missing is that you could restrict your acceptance to debit cards only (directly from you tenants checking account) and get your rate as low as in the 1.2% range. Thanks
Re: accepting credit cards?? - Posted by JT(OK)
Posted by JT(OK) on July 17, 2007 at 07:30:14:
You might also ask how long the delay is between batch and deposit. I had to leave a company because they held the money for 8 days between the batch and when I actually had the money in the bank.
Re: i understand the disqute thing but… - Posted by Gene
Posted by Gene on July 19, 2007 at 21:21:07:
My past retail experience I had a few chargebacks each year. The bank always sides takes the money upfront and the merchant account holder needs to prove that the chargeback is false. Its pretty much “guilty until proven innocent”
In the retail world it is the cost of doing business, but I do not and will not take on that risk and expense in the Real estate business…its just not necessary.
Re: i understand the disqute thing but… - Posted by Ryan B (KS)
Posted by Ryan B (KS) on July 19, 2007 at 12:24:16:
One time I disputed a charge and neither my card nor identity was stolen. I hired a moving company to crate and ship a motorcycle. They charged me $300 to crate it, but when it arrived it hadn’t been crated. I disputed the charge and got the money back.
The point is that anyone can dispute a charge on their own card and, as Anne said, it’ll take a bit of time for the company to get it sorted out.