Free is one of my favorite words. Except in this modern world I am always looking for the catch. Where's the hook, as it were because this bass doesn't want to get reeled in and left flopping on the deck. The main thing that people can get free is their terminal that they use to process credit cards. There are catches, but if you go in eyes open you can avoid the hooks.
So how to do it?
Well the first thing you have to do is determine what your monthly credit card sales are. This may be harder to do if you are opening a new business, but this data should still help out. Here is your magic number, so have it engraved in your business mind: $1,000 per month in credit card sales. Actually, in most cases it is less than that and is in the $820 per month range, but $1,000 is both a nice round number and gives you some flex room. Knowing this will make your decision for you.
If you make at least $1,000 per month in credit card sales (not all sales, but credit card sales alone), then you can get your terminal for free. If the group you are speaking with will not give you one for free, show them the door. You see they should be fighting for your business. The only hook at that point is that you have a minimum $25 per month fee charged to you; however if your business does $1,000 in credit card sales monthly, then that minimum is paid in your fees taken out via normal charges.
Sound complicated? Remember that every sale your business makes via credit card two charges are applied for the use of a merchant account: a discount rate (a percentage) and a per transaction fee (a flat number). In terms of your monthly minimum, you will be charged at least $25. If you do $1,000 in credit card sales in a month, a little over $25 comes out in those two fees, if you do not do the $1,000, then you will be assessed the difference.
Now let's say you know that you will not do $1,000 a month, but much less. OK, you don't actually have to say it out loud, but you know what I mean. In that case you may not get it free, but you can darn well get it pretty cheap. There are several spots that will get you a good, refurbished terminal for under a $100 and they will last several years. That's even better as most small and new businesses are duped into paying a monthly lease that is anywhere from $39-$48 a month. To put that into perspective that's about $480-$600 per year every year. Even if you had to buy a refurbished terminal once a year, since they are generally around $85 each, you would still save around $395-$515 a year.
I'd take that choice any day.
Still, if you are anywhere near $1,000 a month, a minimum $25 fee contract can be quite helpful. You get a brand new, high tech, Star Trekkie looking machine, you often can get free paper, and generally if the machine is damaged, they will replace it up to twice a year for free as long as it is not a total loss as in by fire (because then they can refurbish that sucker and resell it). In either case here's what NOT to do:
1) Do NOT sign a lease for a terminal (buy a refurbished unit)
2) Do NOT deal with a company who is not prepared to give you a free terminal if you sign a monthly minimum
and this is a big one...
3) Never, NEVER sign with a company that wants to charge you a sign up fee (as discussed in the Painful Truth)
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