Why Payment by Credit Card Is Now Better Than by Check

Legal expert Ken Kirschenbaum argues that payment by credit card is well worth the extra fees vs. risk of ‘bouncing’ checks or waiting for funds to be available.

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Just a few years ago the question was, “Are you accepting credit cards?” Now it's, “Are you accepting checks?”

That's the question being asked by legal expert Ken Kirschenbaum of Kirschenbaum & Kirschenbaum and columnist for CE Pro's sister publication Security Sales & Integration.

According to Kirschenbaum, the days of running around collecting cash are gone for integrators, especially for the RMR monitoring and service charges.

“But why would I ask if you accept checks? Because I believe the extra 'vig' you're going to pay the credit card processing companies is well worth the transaction,” he concludes.

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He notes that he not only accepts credit cards for his legal fees, but even accepts credit cards from those he has sued in collection. 

“With credit cards I've found far less chance of 'bouncing' which would happen if the payor challenges the card transaction. That's a lot more work than failing to have sufficient funds on hand when the payor's check hits the bank.  

“A bank check often takes a week or more to find out. If you're checking with your bank several times a day to see what 'cleared' then you are running your operation with insufficient capital and you are wasting too much of your time trying to balance your accounts receivables and accounts payables. You should be out there generating business or making sure your personnel are doing their jobs,” he says.

According to Kirschenbaum, the acceptance of credit cards should be a “natural progression in your business design.”

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Having said that, he says it does not have to be an all-or-nothing situation. Integrators can determine to accept credit cards only for certain types of services but not for others. For example, you can decide to accept credit cards for RMR services but not for initial down payments.

Dealers also need to:

  • Make sure you have the right contracts in place, get them signed and set up an invoicing system.
  • Find the staff you need to supplement your talents, skills and how you want to spend your day.
  • Determine if you are going to accept payments by check, money order, credit or debit card.
  • Process the check or credit card unless you've set up ACH or automatic credit card charging.
  • Wait for your bank to clear the check or the credit card processor to clear the transaction.

“Any glitch in processing the payment is a waste of your time and aggravating as hell. My experience is that there are less clearance issues with credit cards and funds are available much faster. Bounced checks versus challenged credit cards is [I'm guessing] maybe 1000 to 1, at least at my office.

“And if there is a bounced check we have to redeposit and wait or get a new check. I don't pay bank fees, but you might, and it can be $25 or more.  I believe we prevail on the challenges to the credit cards, especially when we have authorization in writing, which we frequently do. So if you still don't accept credit cards I suggest you look into it today,” he says.

About the Author

Jason Knott
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Jason Knott:

Jason Knott is Chief Content Officer for Emerald's Connected Brands. Jason has covered low-voltage electronics as an editor since 1990, serving as editor and publisher of Security Sales & Integration. He joined CE Pro in 2000 and serves as Editor-in-Chief of that brand. He served as chairman of the Security Industry Association’s Education Committee from 2000-2004 and sat on the board of that association from 1998-2002. He is also a former board member of the Alarm Industry Research and Educational Foundation. He has been a member of the CEDIA Business Working Group since 2010. Jason graduated from the University of Southern California.

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