10 Ways to Accept Payment – POS

Today we’ll review Point of Sale systems, which industries use these types of systems, and how it can benefit you and your business to have one.

Can you guess what was the first organization to use a Point of Sale system? Read on to find out…

Are you a small business owner or solopreneur that accepts credit cards for your service business (or wants to)?

If so, here’s a follow up question – let’s say it’s time for your client to pay for your services. Have you ever experienced the following:

You’re trying to accept payment from your client, but your client is hesitant to give you their credit card details.

Whether it’s because they don’t want you to take a picture of their card or because they’re simply uncomfortable with the idea of providing you with their private financial information in the first place…

Either way, a Point of Sale system is the solution to this challenge because it addresses those concerns and allows clients to just ‘swipe’ their card to pay you.

“Can’t I just swipe it?”

A Point of Sale system is any system that allows for the payment of goods or services – essentially it’s the toll booth where you pay for whatever you’ve bought or services delivered to you.

This can take the shape of a cash register, a swipe dongle, or even Point of Sale software.

Although the acronym POS can stand for many different things, (including slang terms we won’t be repeating here) for the purposes of this article we’re referring to Point of Sale systems whenever we use this acronym.

Having a Point of Sale system (or POS for short) may be the mark of a tech-savvy solopreneur or small business owner, but the fact of the matter is, POS systems have been around for at least 3 decades.

THE HISTORY OF POINT OF SALE SYSTEMS

One of the earliest, rudimentary Point of Sale systems was actually used at McDonalds.

The first digital Point of Sale system ran on an Atari system, which is famous for being one of the first video game consoles.

In light of the advent of micro-processors (post 1990’s) most Point of Sale systems started to include bells and whistles such as inventory management and reporting for accounting purposes.

Post 2000’s POS systems typically stored information in the cloud, which would add a layer of security and redundancy to ensure data remained safe.

Check out this breakdown of the differences between the old-school On-premise POS systems and the newer Cloud-based systems:

Doesn’t it seem a whole lot easier to go with a software-based Cloud POS system?

  • Instead of purchasing licenses, you just sign up for a membership (in PocketSuite’s case, there’s even a free option)
  • Instead of updating and maintaining the software, cloud-based software is updated automatically.
  • Instead of requiring dedicated IT personnel, it can be managed by a single person.
  • Instead of requiring costly hardware purchases, you can just download an app on your phone!

All in all, it seems  like business owners could benefit from and would vastly prefer having a cloud-based POS system within reach.

The convenience and low up-front cost is simply too appealing to resist.

You can rest assured that cloud-based POS systems are safe as they use the latest in 256 bit encryption to secure your transactional data.

Newer versions of cloud-based Point of Sale systems are even safer due to load balancing and further redundancy, so your data will be fine even if an entire data center is burned to the ground (such as in Microsoft’s case) or hacked (like Subway’s was – to the tune of $3M).

WHICH INDUSTRIES USE POINT OF SALE SYSTEMS

The retail industry is a key player in the world of POS systems.

Hospitality businesses also use Point of Sale systems regularly – think of any fast food chain restaurant to get an idea of how prevalent this technology is.

Imagine the following businesses, as they all use POS systems:

  • Spa / Esthetician
  • Barber Shop, Beauty Salon
  • MakeUp & Nail Salons
  • Bar
  • Restaurant
  • Retail Shop
  • Dog Trainer
  • Pet Groomer
  • Fitness Trainer
  • Contractor
  • Mobile Detailer
  • Movers

For the purposes of this article, however, we’ll be focusing on the small business and solopreneur side of things.

The reality is, as a small business owner, you need a quick and reliable way to charge a client’s card if they hand it to you, or if they share their card details over the phone.

In addition, for regular clients, it would be especially useful for your Point of Sale system to be able to store the client’s card details for future use.

Any POS system worth its salt will have this capability and more.

But your best bet is to use one that’s connected to the app or software that you use to manage your business.

Imagine having a Point of Sale system that’s siloed from the app where you handle your business messaging, your customer notes, or your payroll.

That’s invaluable data that must be kept together if you want to make sense of what’s going on in your business.

In terms of cost, almost half of all businesses spend about $1,500 per year on their Point of Sale system, according to Capterra.

The Point of Sale industry shows no sign of slowing down – in fact, according to research by MarketsandMarkets, it’s expected to hit $3.73 billion by 2023.

YOU SHOULD HAVE A POINT OF SALE SYSTEM

We’ve touched on the importance of having a Point of Sale system already.

You can accept credit cards from your clients in the field or over the phone.

More importantly, your POS system should be tied to your business management app, which gives you reporting and other capabilities.

There are lots of Point of Sale systems on the market and if you’re shopping around – try choosing one that has competitive rates.

Most will have transaction fees and monthly fees as well so do the math and pick one that makes fiscal sense.

Read on to learn how PocketSuite elegantly solves both problems by offering an affordable, yet powerful Point of Sale system with lower rates than you’ll find anywhere else, but also includes a suite of tools that rivals an entire business management platform – all in a single app.

HOW POCKETSUITE’S POINT OF SALE IS DIFFERENT

Although all credit card processors do charge a fee per transaction, PocketSuite allows you to save on processing fees at 2.7% per payment, compared to Square or PayPal.

Here’s how PocketSuite’s POS stacks up against the competition:

PocketSuite also automatically stores your customer’s card for future purchases, which eliminates the friction and pain of having to ask for their card number with every transaction.

You also get the benefit of being able to tie in your messaging and scheduling data with PocketSuite’s business management tools.

Normally when you’re shopping for a Point of Sale system, you have to ensure that your POS vendor integrates with your payment processor / gateway. Not so with PocketSuite – it’s all integrated in 1 convenient app!

For example, with PocketSuite you don’t just get a POS –  you can handle business messaging, payroll, staff scheduling, inventory management, contract e-signing, and a ton of other features for your service business.

This gives you the ability to do the following:

  • Reference any invoice
  • Reference any scheduled appointment
  • Manage your clients
  • Manage your inventory
  • Sales Reporting

Imagine having all of that power at your fingertips, all wrapped up in single app.

Not only that, but there’s a Premium FREE trial to get you started – talk about a good deal.

If you’d like to read more about PocketSuite’s Point of Sale system, check out this article.

Like this article? You’ll love these articles:

Our Frustrations with Square article

How to win Chargeback Disputes

Chargeback disputes are frustrating to deal with.

They’re often unfair, illegitimate, and place the burden of proving innocence on the business owner.

However, every small business ill at some point need to deal with this nuisance, so let’s discuss the best way of handling a client chargeback.

First of all, if you’re not taking payments online, you should be. Only 15% of consumers prefer to pay in cash – a whopping 80% prefer using debit and credit cards.

However, with accepting credit cards comes the risk of chargebacks. This occurs when one of your customers decides to dispute the transaction either because they didn’t like the service your business provided or because they’re attempting to defraud your business.

In either case, there’s a proven strategies for fighting these disputes and in this article we will be covering the basics of how to put your best foot forward while increasing your chances of winning disputes and coming out ahead.

So what are the most common reasons for chargeback disputes?

WHY DISPUTES ARE A PROBLEM

If a merchant regularly has client disputes, your payment processor may impose a monitoring program to keep an eye on you. If this trend continues, your processor may end their relationship with you.

You may even be added to the MATCH list (a blacklist that will restrict you from being able to accept credit cards) if your rate of chargebacks exceeds 1.5% of your total payments.

If you are an online merchant, a good idea is to highlight information on your website about how you handle customer service complaints, refunds, and cancellations.

You may also want to give clients a way to contact you for support and share information on how you respond to unhappy customers on your site. This type of transparency helps prevent confusion from clients who may feel like they didn’t get what they paid for. If they have that feeling and it isn’t addressed, they file a dispute to get back at you or your small business.

A STEP BY STEP GUIDE TO WINNING CHARGEBACK DISPUTES

First, let’s go over the basic steps that take place when a chargeback occurs.

  1. Your client submits a chargeback dispute with their bank.
  2. If their bank accepts the dispute, they issue a provisional refund to the client.
  3. Their bank contacts your payment processor and gives them a code, which explains why the chargeback was filed (usually the terms to describe the types of chargebacks are: credit not processed, duplicate, fraudulent, general, product not received, product unacceptable, subscription canceled, unrecognized).
  4. Your payment processor lets you know about the chargeback.
  5. You choose whether to accept or fight it.
  6. If you choose to fight it, you need to submit information to your payment processor (usually proof that the charge was authorized).
  7. Your payment processor reviews the information that you’ve submitted – if they believe it’s sufficient, they submit this information to your client’s bank for review and a decision.
  8. Your client’s bank reviews the information that you’ve submitted – if they believe that the charge was indeed authorized and your client’s claim isn’t valid, they decide in your favor and your payment processor returns the funds to you. Your client’s bank takes up to 90 days to decide on a dispute. Once the decision is made, your processor immediately returns the funds to you.
  9. If you do not receive a favorable decision and you do not believe the ruling was fair, (you or the client) can request a second arbitration to decide if your client’s bank’s decision will be upheld.

If you’re still with me, you’ve learned that a critical step in you winning chargebacks is the evidence you submit to your bank to prove the transaction was indeed authorized.

Here are some great examples of evidence you can submit – try to collect as many of these items as possible and send them to your bank:

  • Sales receipts
  • Order forms
  • Tracking numbers
  • Transcripts of email communication between you and your customer
  • Delivery confirmation
  • Records of previous transactions that were not disputed

Here are some more examples of evidence that we’ve seen our customers utilize to win disputes here at PocketSuite:

  • Phone transcripts of conversations you’ve had with your client
  • Photos / videos of the completed job or service (if you’re in the service industry)
  • IP address of the client matching their location to the service address
  • Match the address on the credit card to the service address
  • Signed proof of delivery (if you sold a product)
  • The terms and conditions that the customer agreed to at the time of purchase
  • Messaging history between you and your client
  • Signed contract by your client
  • Completed intake forms
  • Appointment confirmations
  • Gratuity/tip payment receipts to prove client was happy with service

Here are some more tips to prevent chargeback disputes from occurring in the first place:

  • Check the client’s name and address on their ID – make sure it matches the name on the credit card. If it doesn’t match, get authorization in an email or text message from the credit card owner.
  • Have your terms and conditions visibly displayed on your website, including on your booking form
  • MyMoid recommends using customer service to resolve the dispute
  • Make sure you fight the disputes – otherwise you’ll damage your reputation with payment processors

Here is a graphic that displays a more detailed list of dispute reasons with associated codes which was referenced at a high level above – make sure you are familiar with these codes when you’re submitting your evidence. Your response should be targeted to disprove the specific reason given:

Note that if you’re using Venmo for your business, you’re not allowed to fight chargeback disputes.

Similarly, if you’re using Square, their dispute resolution library is really confusing, difficult to navigate, and almost impossible to take action on.

Instead of using a standalone payment processor, why not use one that comes with integrated business tools like booking, contracts, forms, notes, and more? You get invaluable data (such as client, transaction, and sales data) which makes it so much easier for you to protect yourself from disputes, in the first place and effectively fight them when they do arise. 

Imagine if a credit card company gave you insurance – that’s what it’s like using PocketSuite to process your payments and protect your from chargeback disputes.

If you’re going to be processing credit cards, you need a payment processor that has your back.

In fact, we’ve heard of customers leaving Square because they didn’t hear back from them when trying to resolve a dispute.

One client mentioned “There was no notification from Square, the money was just taken out of my account… I didn’t hear back from them, and by then the fraudsters were long gone…”

Another former Square client explains:

“I had an extra fee dispute fee, and I didn’t hear back about anything happening with the process. I submitted information and didn’t hear back if it was considered – I had to wait 90 days before I heard anything. The money was held up for that amount of time – then I lost the dispute and I didn’t even get an explanation for why.”

PocketSuite helps you collect additional proof that your terms of service were agreed to and your payments were authorized, which can expedite your client’s bank’s decision.

We will give you a heads up before the official dispute is filed as we get advanced notification from our technology platform partner, Stripe.

This gives you an additional window of time before the dispute is official to contact the client and resolve the issue, even if you need to split the difference with them.

This way a chargeback dispute doesn’t give you a bad mark and the entire payment isn’t clawed back by your client’s bank. As they say in healthcare, prevention is better than cure.

So go with a payment processor that helps you prevent disputes before they even occur.

This way you can rest easy knowing you’re taking all of the necessary steps to prevent disputes before they happen and are armed with all of the tools to help win disputes that you will inevitably get (hopefully, very infrequently) on your journey to achieving your business and income goals.

Winning disputes doesn’t have to be hard – you just need a payment processor that has your back.

Speaking of payment processors, why not give PocketSuite a shot? We have a free plan to get you started accepting credit cards ASAP.

Like this article? You’ll love our guide on how to generate leads for service businesses in 2019, and of course our Frustrations with Square article!

How to Process Credit Cards for your Business 2019

Choosing the best way to process credit cards can be overwhelming, especially if you’ve never used a merchant account before. However, even seasoned business owners can get confused about selecting payment processing companies since they all do the same thing, more or less. One difference that can allow you to choose a payment processor more easily is to consider the types of transactions they specialize in.

These transactions can include ecommerce, mobile payments, or traditional retail purchases with a physical credit card.

Identifying the best company to process credit cards for your business becomes much easier when you follow a few simple criteria. It also helps to focus on a short list of credit card processing companies that have consistently earned high ratings from their customers (yes, those do actually exist!)

The following guidelines will show you how to process credit cards in your service business for 2019.

And if you’re a real paytech geek about this stuff, you’ll be salivating at what we’re about to serve up…

Criteria

The best criteria for selecting a company to process credit cards for your business include the following:

  • Transparency
  • Value
  • Sales pressure
  • Reputation

Transparency

A credit card processor shouldn’t have any hidden fees or other surprises in its pricing system. Full transparency also requires a merchant account provider to separate wholesale costs from markup costs, a practice known as interchange-plus, or pass-through pricing. The credit card issuer sets the interchange rate, which is the same for all credit card processors. However, the markup can vary greatly between companies.

The best companies have clear rates you can see on their website.

The best processors provide detailed fee disclosures up front, and many of them also offer to meet your current rate if it’s lower than their advertised rate. Both of these practices ensure that a new business starts out at a fair rate when using a new processor. That being said, if the processors rate is already lower than the rest of the mark, no need to negotiate further…just lock it in.

Value

Companies that process credit cards use a variety of strategies to provide value for their customers. They can charge rock-bottom prices by providing only their own services, or they can charge more and provide additional services such as software. The best choice depends on your business and your budget, but you shouldn’t necessarily go with the lowest rate.

Additionally, value does depend on where you are in your business. Do you operate a small business or are you a giant retailer like TJ Maxx or Walmart?

Sales Pressure

Some of the salespeople for credit card processors will promise you anything to get you to sign on the dotted line, but fail to live up to those promises. Others offer low rates, but require a long commitment and charge a high fee to get out of it. The best credit card processors don’t use high-pressure sales tactics or require you to make long-term commitments.

Seriously, why would you even try to pressure customers in a B2B environment? It makes no sense, unless your product is sub-par…

Reputation

A proven track record of providing good customer service is important for any business, but this is especially true for companies that process credit cards. All of these companies have some customer complaints against them, so it’s critical to determine the exact nature of the complaint and look for patterns. Merchant account providers with the best reputation will have low complaint counts and many independent reviews illustrating their good practices. That being said, when you do see complaints online…read the fine print. Complaints about pricing tricks and gotchas are BAD NEWS, run far, far away. Complaints about long hold times and some merchants not being approved to process on these platforms are surprisingly a good sign. It means they are a secure platform that only works with reputable merchants. There are lots of fraudsters and trolls out there masquerading as business people. You don’t want to processing alongside them on a platform. You want them shut out of any zone that your business is playing in.

Credit Card Processors

It’s difficult to make definitive claims about the companies in an industry as large as credit card processing, but the following providers are some of the best. This is especially true when it comes to setting up accounts, whether it’s online or over the phone. These companies also offer varying services, with varying policies as far as their sales and marketing practices.

Our top pick: PocketSuite

PocketSuite is our top pick and the best choice for folks who run a small business. What makes PocketSuite unique

PocketSuite brings the best of both worlds. You get all of the features of full fledged business management software, but conveniently packaged into an app – you can literally run your entire business from your phone! PocketSuite only charges a low 2.7% flat fee. The lowest in the industry with no additional markup or hidden fees and, of course, no long term commitment.

If you operate a small, service business, save yourself some time and just try PocketSuite now.

From their website:

“Whether you are independent and on-the-go or have the help of an admin and team, save time and never miss another appointment or lead again. You will also have access to online booking so clients can book you from your website, Facebook, and/or Instagram. There are so many ways for you to get booked and paid on PocketSuite. Download the app and get setup in minutes.”

PocketSuite has a free plan you can try right away. However, they also have paid plans that include Client Imports, Instant Cashout, and Rockstar Support. Check out these features from the Premium plan:

  • Unique Business #
  • Subscription Payments
  • Customer Group Messaging
  • Saved Message Templates
  • Class Scheduling, Auto Check Ins & Attendance Tracking
  • Overnight Reservations
  • Tasks / To-Do’s
  • Online Booking (Site/FB/IG)
  • Data Importing
  • Questionnaires / Forms
  • Contract E-Signing
  • Estimates
  • Smart Campaigns
  • Package Sales & Usage Tracking
  • Add-On Products
  • Lead Forms

PocketSuite’s website

Here are our Runners up:

Payment Depot

Payment Depot was founded in 2013 and has its headquarters in Orange, California. This merchant account provider uses subscription-based pricing, which is a variant of the traditional interchange-plus model. Subscriptions are relatively new for companies that process credit cards, although other processors also use it. However, Payment Depot’s excellent customer services and open sales practices place it ahead of many of its competitors.

Interchange-plus pricing includes the interchange rate charged by the credit card issuer and the processor’s markup fee, which can include a flat fee for the transaction and a percentage of the sale. Many processors also charge additional fees for other services such as providing account statements and ensuring PCI compliance. Payment Depot bundles all of these charges into a single subscription fee that range from about $50 to $200 per month as of 2019, depending on the services the plan offers. The elimination of the markup fee means you only pay the interchange rate plus a flat fee for each transaction. This fee is currently between $0.05 and $0.15 per transaction, depending on the subscription plan.

You can pay Payment Depot’s subscription fee monthly, but you’ll save money by paying it annually. You also get a 90-day guarantee with annual payments, so you can get a refund on your subscription fee if you cancel your subscription within the first 90 days. This benefit can provide you with peace of mind that you won’t lose your annual subscription fee if you don’t like the annual payment option.

Fattmerchant

Fattmerchant can be beneficial for any type of business, but is best suited for merchants who don’t use physical credit cards such as e-commerce. This company uses a subscription model to process credit cards, with a transaction fee ranging from $0.08 to $0.15. The subscription fee is about $100 a month, which will usually pays for itself since there’s no markup fee. Fattmerchant is especially helpful for card-not-present businesses because it doesn’t charge extra for ecommerce and phone orders, as virtually every other provider of merchant services does.

Fattmerchant is one of the best all-in-one payment processors available due to the versatility and value it provides for a wide range of businesses. This method of processing credit cards is a good choice whether you run a standard retail business or are a service provider. The biggest reason to use Fattmerchant to process credit cards is the additional services it provides, which include billing, customer management, inventory management, virtual terminal and reporting. Fattmerchant’s available services already rival those of Square Payments, and it’s continually adding new services.

National Processing

National Processing is our runner-up choice for merchants who run a small business, but still need the services of a larger business. It has a great reputation, with a lot of praise from its current customers and few complaints. This combination is rare among companies that process credit cards. National Processing uses an interchange-plus pricing model and offers the following four plans based on business type:

  • ACH payments: $0.24 per transaction
  • eCommerce payments: interchange rate + 0.30% + $0.10 per transaction
  • Restaurants: interchange rate + 0.15% + $0.07 per transaction
  • Retail: interchange + 0.20% + $0.10 per transaction

National Processing is a great choice for merchants who want a reliable company to process credit cards for a low rate. Its best selling points also include the versatility of its pricing models. However, National Processing doesn’t offer the large suite of free software that other processors provide. Bear in mind that National Processing could save you enough money to enable you to buy this software from any vendor you want, instead of just using the software that your payment processor provides.

So, which one are you going to choose?

At least one of the credit card processors reviewed here should be a great match for your business, whether you have multiple retail locations or only sell your products online. All three of these companies that process credit cards offer a competitive rate for their services, which essentially consists of connecting your credit card issuer’s bank with your bank. They also provide transparent pricing with an easy setup, although the specific pricing models and features of these companies that process credit cards vary greatly.

Make the right choice, and you might be looking like Jonah Hill…

Credit card processors tend to focus on a particular segment according to factors such as transaction volume or transaction type. For example, PocketSuite is best for businesses with small or medium volume while Fattmerchant is better for larger retail businesses like Walmart. In general, though, all of these companies have lower rates than those offered by credit card processors owned by the credit card issuers’ banks.

Like this article? You’ll love our guide on how to generate leads for service businesses in 2019, and of course our Frustrations with Square article!

Accept Credit Cards for Your Business 2019

Remember when credit cards were new? Yeah, neither do I. That’s because accepting and using credit cards for payment has become second nature to almost everyone in the first world. Therefore, as a small business owner you can get a real edge over your competition by accepting credit cards (just like the big boys!)

Today’s customers expect to use their credit cards for just about every purchase, even from service businesses that have historically been cash only. The ability to accept credit cards is now a formal requirement, but rather a form of customer service. Any business that can’t accept credit cards risks losing clients to competitors that will.

However, you also have to deal with additional problems if you want to accept credit cards. These include security issues such as fraud and chargebacks, which are a routine part of credit card transactions.

Ensuring that customers know you accept credit cards and providing them with as many payment options as possible is also essential for attracting and retaining clients. The following ten tips will detail how to accept credit cards for your service business in 2019.

Get your helmets and elbow pads ready, this is going to be a bumpy ride! But I know you’re up for it. 🙂

  1. Provide Great Customer Service.

Customer service should always be a top priority, especially for small businesses trying to grow. This includes basic courtesies such as thanking clients for their patronage. It is also important to make it as easy as possible to get in touch with someone from your business when they have questions about a purchase.

Customer service includes additional issues when you accept credit cards, which you must address promptly to avoid misunderstandings. For example, you should handle refunds yourself instead of driving your clients to file disputes. This practice is virtually certain to save you money in the long run and protect your reputation.

  1. Prioritize payment options that provide greater flexibility.

Many options are available for handling your credit card transactions, but you need to select a credit card processor that maximizes your flexibility when you accept credit cards. This is especially important when running a new business that’s still trying to find its footing.

In particular, you don’t want to lock yourself into a long-term contract before you determine exactly what you need from a merchant account provider. Some of these companies try very hard to get you to sign a contract with a long term and high cancellation fee. Don’t be afraid to ask for providers to make exceptions for the terms you don’t like. They may be more flexible than it first appears and you don’t lose anything by asking. Remember, you can always say “no” to a proposed agreement.

  1. Learn how to spot potential fraud early.

Identity theft is a routine problem when you accept credit cards. You can’t do much to prevent someone from stealing credit card information in the first place, but you can protect your own business by recognizing charges that may be fraudulent before executing these transactions.

Always check the details of a credit card transaction carefully, and ensure your employees do the same. Contact the card holder if anything seems amiss such as a shipping address for a purchase that doesn’t match the credit card’s billing address, especially for phone and website purchases. An incorrect security code is also a good reason to verify the purchase with the card holder. Legitimate clients will rarely resent you going the extra mile to protect their account.

“Hmm.. for your protection, can you confirm if the shipping address on this is correct?” -It’s that easy!

  1. Deal with returns quickly.

Accepting returns and issuing refunds is a part of any business, whether it accepts credit cards or not. In the case of credit card purchases, however, a return also involves a chargeback that can cost your business money. Dealing with it quickly is essential, especially for small businesses.

Find out if your payment processor offers an option to notify a merchant about pending chargebacks, and activate it if available. This capability lets you know when a customer is disputing a charge very quickly, allowing you more time to contact the customer and address the matter. Chargebacks are often the result of a misunderstanding, rather than a fraudulent transaction. For example, a customer may have simply forgotten about the purchase.

“Oh yeah, that Blendmaster 4000.. I actually did order that! It was 2AM and I was filled with awe and also not a small amount of wine. But yeah, I ordered that” -Ever have a conversation like this?

  1. Follow the rules to the letter.

All merchant account providers have extensive rules regarding credit card transactions, although those rules can vary considerably between merchant account providers. Learn these rules and follow them precisely to keep your account in good standing and protect your business. This practice is especially important when switching providers.

For example, some providers require a different procedure for transactions that don’t require the physical card, such as online and phone purchases. In these cases, merchant account providers often require the merchant to obtain additional information from the customer for security purposes. For online purchases, this information may include the customer’s IP address or digital signatures. Providers may also require you to review the customer’s social media profile.

“Okay, it looks like bigjoe3453 made this order… is that you? I can’t find you anywhere on social so just wanted to make sure” – Always check if folks are legitimate or not. You’d be surprised!

  1. Shop around for your payment processor.

You need a merchant account from a payment processor before you can accept credit cards. These accounts all perform the same basic function, but there can be a huge difference in other areas. Obtaining an account can be a lengthy process, largely because there are so many providers. However, it’s essential that you select the right one due to the wide range in prices and services they offer.

Processors often offer multiple plans based on factors such as transaction volume, transaction type and business type. For example, some providers favor businesses with low volume, while others are best for businesses with high volume. Similarly, businesses that don’t typically require physical credit cards may be better off with a different provider from those that do require the actual credit card.

P.S. PocketSuite currently has the lowest fees in the industry (2.7% flat fee) for small businesses based on our studies.

  1. Communicate your refund policy to your customers.

It’s virtually impossible to provide too much clarity to your clients, especially when it comes to your policy on refunds. Common reasons for a customer to request a refund include buying the wrong item, an item that didn’t work as expected and a sale price that took effect after purchase. Refunds for credit card purchases require additional steps, making it even more important to minimize them when you start to accept credit cards.

Ensure your business has a clear policy on refunds, returns and adjustments. Display this policy prominently throughout your store, especially at point of sale (POS) locations. You should also print your policy on your receipts, so customers will know what it is after they leave your store.

“Sorry, I didn’t know that someone stealing my item wasn’t covered by your refund policy” Really…?

  1. Add signage for credit cards.

Most customers today will assume that you take credit cards unless they have a reason to believe otherwise. However, it never hurts to post dedicated signs to that effect, and it can help your business. These signs should clearly state that you accept credit cards and include the logo of the specific cards you accept. Post these signs at the front of your store, on your website, and POS locations to boost sales, especially from impulse buys.

Example: WE ACCEPT VISA, MASTERCARD, etc.

  1. Keep records of everything.

You should already be keeping meticulous records on your financial transactions, but this practice is even more important when you accept credit cards. Of course, records aren’t much use when someone steals a cardholder’s information, but they can be invaluable for disputing chargebacks. Detailed records are particularly useful in cases where the customer has simply forgotten about the purchase or is trying actually to commit fraud.

Fraud is no joke, don’t take this lightly!

  1. Obtain valid authorization for credit card transactions.

Today’s consumers expect a large number of payment options, especially from businesses that accept credit cards. In addition to traditional credit cards, it’s also in your best interest to accept debit cards, gift cards, and prepaid cards. Regardless of the specific type of card, you should never get lax about security. For example, you should never complete a transaction without obtaining valid authorization.

Keep this in mind

You can increase your sales when you accept credit cards, but you also need to implement a number of practices when doing so. Some of these practices are specific to credit cards, while others are best practices for all transactions that become even more important for credit cards. These changes may seem burdensome at first, but they’ll soon become second nature.

It’s time to take your business to the next level. If you’re interested in accepting credit cards for your business, PocketSuite has the lowest fees (2.7% flat fee) around and is built for small business owners.

Like this article? You’ll love our guide on how to generate leads for service businesses in 2019, and of course our Frustrations with Square article!

How to Use Venmo for your Business in 2019

Today, service professionals need the ability to process payments as a part of their everyday operations. Today, more than 50% of consumers use mobile payment methods to complete purchases rather than using cash, checks, and other payment methods.

Mobile payment has grown into an industry, valued at more than $220 billion annually. That means that being able to accept credit cards on your phone or ipad/tablet is not just a useful business tool – it’s a necessity. You need a mobile payment processing service that is fast, secure, reliable as well as convenient for both you and your clients.

Working With a Leader in Service Business Mobile Payments

Venmo is one of the leading mobile payment platforms. It is owned and operated by PayPal. It is an innovative mobile payment service that gives users the ability to make payment transactions wherever, whenever. It has made the money transfer process between individuals easy, social, and fun! In the first quarter of 2018 alone, Venmo facilitated more than $12 billion in transactions worldwide.

But in the rapidly advancing information age, breaking ground in service business and being the best are not the same thing. While Venmo is responsible for opening up a whole new avenue to commerce that did not exist before, the market is now demanding more features, faster service, and better results.

Meeting the Demands of Mobile Commerce

It’s a predictable phenomenon; when a company like Venmo comes out with a new product that is a game changer, a product that does things no product has ever done before, it opens up new possibilities. Those new possibilities inspire others to innovate and one-up the original. And generally speaking, they do it lightning fast.

As users adopt the new technology and become familiar with the new capabilities it offers, they quickly discover ways to improve on it. You probably have this experience every day. In your service business you use a product to deliver your service and quickly start thinking of enhancements that would delight your clients even more. You imagine how much more productive you could be if it were streamlined, better integrated, had more features, or more user-friendly.

Once a game-changing innovation like Venmo reaches that point, the race to improve the technology, and to take it to the next level, is on. Too often the original innovator like Venmo is slow to improve, and they are left behind. That’s where other worthy competitors come in.

Enter the PocketSuite Service Business App

PocketSuite is a new mobile payment service provider with an edge that Venmo can’t match. They have taken the underlying technology of mobile payments and taken it up several notches. PocketSuite is an all-in-one business app for your mobile phone or ipad/tablet that is more powerful, more responsive, and has far more features than Venmo. It is designed to help save service businesses time and make them more money.

With PocketSuite, it doesn’t matter where you are, where you’re going, or how quickly you have to be there. It is a comprehensive business application that gives you access to online booking, allowing your clients to schedule appointments from your website or Facebook and Instagram pages. PocketSuite is leaving Venmo in the dust. But that’s just the start.

PocketSuite Does for Your Service Business What Venmo Won’t

The team behind Pocketsuite listened to Venmo users to find out what they needed that Venmo was not providing. In so doing, they came up with a comprehensive list of mobile business features that service professionals need to compete with marketplaces and larger companies. Here’s what they came up with.

Client Notes

PocketSuite allows you to add important notes on any client. This makes it possible for you to remember all those client preferences that make a huge difference to clients. Remember those little unique idiosyncrasies about each client like preferred pronouns, nicknames, weird delivery instructions, things they like and dislike, special discounts, or their birthdays and anniversaries. Venmo doesn’t do that – not even close.

In a service business, these little details are incredibly important. Forgetting them can mean less sticky client relationships and lower client retention. This powerful feature gives you the ability to make your client feel special. It makes a world of difference.

E-Contract Signing

With Venmo, you can’t send contracts or forms to the client as proof of the terms of your payment agreement. Instead, you have to use a separate application, like PocketSuite. (wink wink)

It really is a no brainer. With an app like Venmo, you should be able to accept payment and send all the requisite forms to the client in one (maximum two) tap(s).. But with Venmo, you just can’t do that. Venmo forces you to log into a second program to send forms and contracts. Of course, any time you do that, you run the risk of causing confusion, creating friction in the transaction, and losing the client. There’s so much that could get lost in translation – so much of that could affect your bottom line. Why take the risk?

With PocketSuite, unlike Venmo, you get all of this in one place. Plus, you have your client notes and other important info and services all in one accesible place.

Text Automation

With Venmo, you can’t automate follow-up texts – with PocketSuite you can. PocketSuite allows you to automate important follow-up texts to your customers. Why would you want to leave them in the dark when you can keep them in the loop throughout your process? This is where Venmo really drops the ball.

Suppose, for example, it takes you a week to deliver a service. Until now, the norm with Venmo has been to simply to keep users in the dark about where your funds are until you reach the next stage. Today, mobile users want more and they deserve more. They want to know that you are working on their product, service, or project. They want to be able to plan around delivery times and milestones. Give them that ability with automated text reminders & updates.

Multi-Service Lists

With Venmo you can’t list multiple services for sale, but with PocketSuite you can. PocketSuite is exactly what the name implies- an entire service business suite right in your pocket- complete and ready to go at the tap of a button. PocketSuite lets you list your entire product inventory and service list, all in one place. Why would you want to make potential clients toggle back and forth between your website and Venmo’s payment service? When your clients are trying to fulfill a need, they want a ready solution available to them. PocketSuite gives you that toolset all upfront.

Invoice Sharing

Everyone with even a little business experience knows that invoices can be a pain to deal with. Why not automate as much of the invoice process as possible? Unlike Venmo, PocketSuite lets you do exactly that. Now, you can send invoices automatically.

Full Brand Packaging

Now, your customers can find everything you provide and everything you do all in one easy to use interface- one that’s conveniently accessible via SMS. With PocketSuite, unlike Venmo, you can bundle and add any service that you wish to sell. Choose which one and how many you want to include in a package? Just fill out the remaining details and your PocketSuite client service package is launched and ready to go. It really is as easy as that.

Instant Payments and Payouts

Say goodbye to delays that Venmo makes unavoidable. Take charges and give refunds instantly. Simply tap the “Charge” button to complete payment transaction with any credit card that has a Visa, Mastercard, AMEX, or Discover card logo. Your client gets the benefit of knowing where they are in the payment transfer process and the risk of disputes/chargebacks is drastically reduced. Venmo doesn’t do that.

My reaction when I receive an Instant Payout

We’re all grateful to Venmo for creating such a powerful mobile payment processing technology. But now, it’s time to take mobile payments to the next level. It’s time to transform your mobile digital payment asset into a full-service business suite right in the palm of your hand.

Like this article? You’ll love our guide on how to generate leads for service businesses in 2019, and of course our Frustrations with Square article!

Client Payments: However You want them

1) Point-of-Sale

Occasion: Quick way to charge a client’s card if they hand it to you or simply tell you the card details over the phone.

Benefits: Fast! Also you can store the client’s card for future charging at will.

How: Tap the CHARGE button on your home screen of PocketSuite, enter client CC info, charge any $ amount.

Save on processing fees at 2.7% per payment, compared to Square or PayPal.


2) Invoicing

Occasion: Sending a traditional (and professional) invoice to clients for services.

Benefits: Allows clients to pay any invoice amount online (from their smartphone or computer) with convenience.

How: Tap the INVOICE button on your home screen of PocketSuite. Deliver any invoice via text or email, and clients will have the option to pay online.


3) Appointment Deposit Upfront

Occasion: If you want to collect payment on an appointment upfront when scheduling a client to your calendar.

Benefits: In one-fell swoop, confirm a client appointment on your calendar while receiving a full or partial $ deposit upfront.

How: When scheduling an appointment in PocketSuite, set a “$ Deposit” amount on the appointment and require your client to confirm said appointment with a credit card when you send it to them.


4) Payment once an Appointment/Job is Complete

Occasion: When you want to accept payment immediately after an appointment is complete.

Benefits: Uber-like experience to charge a client’s card that is linked to an appointment on your calendar.

How: Tap the CHARGE button on any appointment on your calendar that has been reserved with a client’s credit card. You can charge any $ amount and even hand the phone over to your client to add a tip (if desired).


5) Online Payments

Occasion: If you want to have clients book/pay you online – you can accept payment through your website, Facebook page and Instagram profile.

Benefits: Allows you to turn anyone visiting your website or social media pages into an instantly booking and paying client.

How: Enable ‘Online Booking’ in PocketSuite, and integrate your booking widget onto your website. Then paste your booking links on your social media profile.


6) Selling Packages

Occasion: If you want to sell upfront to a client a group or package of services/classes for future use.

Benefits: Collecting payment upfront, and then having a simple way to track all the sessions/credits used by each client.

How: Set up / save any standard package or program you sell, then send it off to your client (via text or email) to review and then purchase online. Credits are auto-added to the client’s account and you can start tracking those sessions!


7) Recurring Payments

Occasion: When you need to automatically charge clients each week, month, etc. – for ongoing memberships or recurring billing.

Benefits: Literally get paid while you sleep. No work on your end to have to invoice/charge clients, and no work on the client’s end to have to remember to pay an ongoing bill.

How: Enable ‘Subscriptions’ in PocketSuite, and send any type of subscription plan you’d like to a client (with a set $ amount and payment schedule). Your client confirms that plan just ONCE with a credit card only and voila!


8) Class Deposits

Occasion: When you want clients to sign up for a class and pay a drop-in fee ahead of a class.

Benefits: Double whammy: fills up your class roster allowing clients to sign up for a class ahead of time, and ensures you get PAID for the class ahead of time.

How: Enable ‘Classes’ in PocketSuite, then set up your class schedule (class name, $ drop-in, schedule, location, etc.). You can sign clients up yourself or post your class schedule online (see ‘Online Booking’ above) for clients to sign up & pay online.


9) via SMS Shortcode

Occasion: When you are requesting payment from a client via SMS text (i.e., sending an invoice via text, a package via text, requesting a job deposit via text, etc.), clients can literally just reply “1” to pay.

Benefits: Literally the easiest way around for a client to make a payment.

How: If you send any payment request to a client via text message, then your client will be given the option in the text thread to “Reply 1” to pay whatever is due (assuming your client already has entered a CC on file before).


10) Cancellation Fee

Occasion: If your client ever cancels an appointment falling inside your cancellation window.

Benefits: Gives you the ability to charge a cancellation fee — so you can be compensated for clients who fail to show up or cancel on you last minute.

How: When a client taps on their appointment link and hits the CANCEL button, they will be shown that by cancelling, their card (on file) will be charged your cancellation fee (as set by you under Settings > Business > Cancellations).


Bonus: GIVE YOUR CLIENTS THEIR OWN APP…

11) Client-side app

Occasion: If your client wants more control over sending you one-off payments not tied to any particular transaction.

Benefits: Gives your clients more flexibility and an organized record of all payments they send to you as the business.

How: Clients can download PocketSuite to their smartphones as well – they create a ‘client’ account instead of a ‘business’ account. They can add your business details under their PocketSuite contacts and send you payment at will via credit card, debit card and even ACH transfer.


12) Gift Certificates

Occasion: For holidays, special occasions, or just because…

Benefits: Gives you the ability to sell anyone an e-gift card that can be assigned to anyone as a gift and used to pay for any of your services. It’s a great way to pull your income forward during slow periods.

How: When a client taps on your booking link to buy any of your gift card items, they can purchase it for themselves or assign it before checking out of your booking site by entering the name, number, and a brief message to anyone.


 

13) Payment Button

Occasion: Whenever from whomever

Benefits: Gives you the ability to securely get paid any amount by anyone from your website or social media page (Facebook, Instagram, YouTube, LinkedIn, Twitter, etc.).

How: Just like Venmo and PayPal. when a client taps on the payment button or link on your website or social media, they can enter the amount that they want to pay and a quick note and send. You’ll be notified of the funds immediately and you can cash out in minutes.


What Frustrates Me About Square Up

AND WHY IT’S A HUGE DEAL FOR SMALL BUSINESSES

I’m going to try my best to have an unbiased view of Square Up.

It’s tough, however, to not be partisan when I talk with small businesses every single day who complain about the costs, feature overload and passive support of Square.

Don’t get me wrong – I think Square Up adds large amounts of value to specific industries likes retail, restaurants, and food trucks.

But for many of the service professionals I speak to each day (like contractors, stylists, personal trainers, dog walkers, cleaners, tutors and more), Square Up tends to have a number of core issues.

The feedback is simple: It can be really, really, really frustrating.

High, Complicated Costs

The biggest deterrent to accepting credit cards are high fees. Most business owners can relate to that.

Cash flow is very important to small business owners, so keeping costs simple and low is a must.

The pricing structure for companies like Square Up, Authorize.net and even PayPal are still stuck in the stone ages.

There are processing fees, per transaction fees, batch fees, hardware fees, monthly gateway fees, setup fees, and more. The unspoken truth is in the fine print unfortunately.

To make things even more complicated, the fee structures are different depending on how you (as a business owner) accept payment. A swipe? An online payment? An invoice payment? A card entry?

The truth is most on-the-go business professionals don’t want to have to stop and think about how much in fees they’ll be paying based on how their client will be paying using their credit card.  

Innovations in payment processing technology has skyrocketed in recent years. That means these processors should not be complicating their customers with complex pricing schedules.

There needs to be a single transaction fee…a low transaction fee.

It shouldn’t be this complicated.

Hardware Necessary

Let’s be honest – when a client is paying for services, the customer is not always right in front of the professional.

Most of the businesses we speak to each day are invoicing clients, collecting deposits, accepting online bookings/payments – they need more than point of sale credit card processing.

Square is best known for its swiping – when the client is right in front of the business owner. Because of this, hardware (or the “Square reader”) is mandatory in order to perform the very act of swiping a credit card in person (or inputting a card into a larger reader if EMV chips are involved).

In our “attempt” at humor, we published a Top 10 Ways to Ditch Your Square Reader…highlights include attaching your reader to a SpaceX rocket ship or planting it in your backyard to see what grows 🙂

Ok, back to the serious stuff...like the problems with hardware.

The hardware breaks. It doesn’t plug in if you have a smartphone case. You can’t ever seem to remember to pack it. The hardware doesn’t store the card information of your recurring clients.

What makes sense is a credit card reader at a Starbucks; or at a restaurant; or in a food truck.

Hardware can only be used in a single situation – in person. Most on-the-go professionals need more than that.

Feature Overload

Square Up touts how it helps service businesses “run their business”.

But in the real world, there are limitations to that marketing message – you need more than just a credit card processor to run your business.

For example, here’s some feedback we received from Tim who runs a fitness business:

“I am using Square Up for processing (@3.5% + $0.15 for manually entered), use Google Calendar, use Zoho for billing and have to run monthly credit card payments manually.”

So for Tim to run his business, he needs more tools (than just Square Up) with more features. He uses up to 5 other apps and tools to help him with the day to day.

To address this problem, Square has also invested in building adjacent tools and (supposedly) complementary apps.

Here’s a quote we received from Susan who runs a small tutoring business in Texas. Let me know if you can guess what her issue might be here:

“I use the Square Cash app, Square Appointments, Square Invoices, and Square Online Payments via my website.”

She uses more Square tools than just a credit card processor. However, she uses 4 different Square apps to help her run all the parts of her business.

She spends most of her time hopping in and out of each Square-built app – in many ways not any real difference from Tim’s problem above. The Square apps are not integrated, they don’t sync, and they each cost their own ongoing monthly fees or transactions fees.

A lot of frustration comes from the fact that Square Up is a payment processing company at its heart, and business owners are having fundamental issues using Square to “run their entire business”.

“I can’t get anyone from their support team on the phone!”

If I’m using Instagram, and I run into a bug or have a question, I don’t necessarily panic.

I’ll email Instagram’s support team with more of a “heads up” about the issue and not really lose sleep over it, and definitely do not expect to get someone on the phone to discuss the issue.

Why? Because I don’t rely on Instagram to survive (i.e., collect payment for my business).

But for business tools, high-quality/real-time support is something that is absolutely crucial.

What if your client is having trouble paying you? You can’t charge a credit card? You’re waiting on a deposit and want to know when it will arrive? All of a sudden your reader breaks?

Square Up has limited phone support. That means the busy professional can’t speak to a real human being on demand…A human with real feelings who can be empathetic with the fact that they’re trying to run a real business, collect actual payment and are experiencing a serious roadblock.

Am I Being Too Harsh?

I honestly don’t think so.

My concerns here aren’t made up. These are concerns that I’m echoing from real business owners, with actual concerns who are trying to each build something awesome – their own business.

Square Up is not the future of small business technology. It’s the past.

Most single small business owners don’t have a voice loud enough to make significant change in technology. So it’s on us to voice their concerns, address their issues, and come up with a practical solution.

If you have opinions on Square (similar or different to ours, either way), drop US a line directly or visit our blog.


So how do Square and PocketSuite compare exactly?


Join the tens of thousands of businesses who use PocketSuite

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How Payment Apps Are Speeding Up Cash Flow

Time is money. This common idiom, widely attributed to Benjamin Franklin, is what drives a great deal of innovation in today’s tech-meets-business world. Mr. Franklin could not have anticipated mobile payment apps, but I bet he would recognize what they mean for today’s on-the-go entrepreneur slowed by the invoicing slog.    

Invoicing creates bureaucracy and doubt over when and how (and sometimes even if) entrepreneurs will be paid. All this uncertainty causes worry about cash flow. For entrepreneurs providing services like home repair, lawn care or house-cleaning, visiting multiple locations each day, invoicing is often done in the car between jobs or at home after a day filled with work.

In today’s mobile world, your business should instead automatically and instantly receive payment the moment the work is done.

With the recent launch of Apple Pay, as well as the ongoing presence of Google Wallet and PayPal, opportunities are increasing for people to swap their wallets for smartphones. These technologies are building momentum within the service professional community, allowing no-touch transactions promptly after service delivery. There’s no invoice, no drawn-out payment cycle and no harassing follow-up calls to clients who are late to pay (think Uber).

Not only do new tools exist for entrepreneurs and solopreneurs to streamline their billing, but many consumers are already using the technology. Mobile payment apps might just be the nimble entrepreneur’s new best friend, and one of his or her most valuable tools for building a successful business. Here’s why:

They’re fast

Perform a service, get paid. That’s how mobile payment apps drive business, disrupting traditional invoicing so there’s no cumbersome process or ongoing game of chase-and-remind for clients who are behind. This instantaneous payment frees up entrepreneurs to put their time where it counts – on their actual work. With extra time on their hands, entrepreneurs can finish more projects and win more clients.

They keep your cash flow…well, flowing

Business credit has been tight since 2008, making it hard for entrepreneurs to rely on credit to support their operations. Being paid immediately means more small businesses that rely on their cash flow will survive, grow and thrive, while more accurately monitoring their balance sheet to simplify budgeting. This opens the door for tenacious entrepreneurs ready to make the startup leap.  

They’re affordable

Typically, business owners who accept credit and debit card payments have to invest in a merchant processor account. These accounts come with a number of baked-in costs, including gateway fees, statement fees, monthly minimum fees and transaction fees, totaling between$25 to $35 per month depending on who you use. Mobile payment options allow entrepreneurs to process credit and debit card transactions without a merchant processor account.

Mobile payment options free entrepreneurs from long-term contracts and numerous hidden fees, offering clear pricing and fast deposits for a fraction of the cost. These services still come with a small processing fee, but as the space becomes more competitive (as I anticipate it will), those fees will shrink.  

They’re convenient for you and your clients

While you’re enjoying a life without invoicing and waiting for payments, your clients will enjoy a life with a lot less check writing, cash withdrawing and reminder pinging. It’s freedom for both parties. At the same time, mobile payment apps can help entrepreneurs protect themselves from the repercussions of cancelations by automating billing on their cancelation policies.

Mobile payment apps make life easier for today’s entrepreneurs but they will also launch more small businesses into existence. Professionals will find the independence, flexibility and support they need to take back their time and turn it into success.

Beware of Buyer’s Fraud

Growing your visibility online as a business comes with its benefits – more eyeballs, better marketing opportunities, and more customers. But what we have found is that increased visibility also makes it easy for fraudulent actors (aka, “fraudsters”) to identity and target honest business owners with innovative fraud schemes.

In 2014 alone, 13 million people were victim of identity theft, with fraudsters stealing a whopping $16 billion from them.

If you run a local business and sell your services and time to customers (i.e., photographers, dog trainers, contractors, fitness trainers, etc.), then take note – especially if you offer large ticket services of $1,000 or more.

The blueprint of this new fraud scheme is outlined below. If any of these points resonate with you as a business owner, take extra caution in dealing with “supposed” customers who follow this pattern.  

1. The Initial Contact

Snooping fraudsters will find your contact information listed online, and will always reach out to you – the business owner – via text message or email, posing as a warm lead. Fraudsters typically do not call you because they are either foreign, or are bad actors, or can’t think quickly on their feet if you ask them suspect questions. If you ask to chat on the phone, they will say they are either deaf, in the hospital, or out of town and cannot speak.

Let’s call this fraudster “Bob”. So Bob will send you a text message, posing as an interested client, asking about your services, and seeming eager to buy.

2. The Ask

Bob will be interested in purchasing a large ticket item and paying upfront (Why large ticket items specifically, discussed in #4 below). Bob will always push to pay upfront, tell you not to worry about anything, and will probably shoot for an amount around the $5,000 level (we have seen amounts range from $1,000 – 10,000).

3. The Payment Method

Bob will ask to use a credit or debit card for payment. He will need a “card not present” technology to make this payment to you. So he will ask you to send him an invoice via email or text message, to allow him to enter in the card details online for quick payment. The card Bob uses is a stolen card – you will not know this because Bob is entering in the card details on his end privately. Note that an additional flag would be if Bob asks you to break the large charge up into smaller invoice payments – he will use a few different stolen cards with lower limits to pay you with.

Once the card is charged, then Bob’s fraud work is done except for one final step.

4. The Partial Refund Request

As soon as the payment is made, you – the business owner – are probably feeling pretty good. You just sold $5,000 (let’s just say) worth of services, that payment is en route to your account, and this supposed client Bob is on your calendar for future services. What happens next is crucial to the fraud scheme. Bob will immediately ask for some sort of partial refund in cash (or maybe check). You will probably be thinking it’s somewhat bizarre, but the refund will be only to the tune of $1,000 (~20% of what you just got paid). So to you, it’s still a hefty net $4,000 in your pocket, and you’re making Bob happy by granting him this refund request. Note that sometimes Bob will actually ask for this partial refund prior to you sending him the invoice, and he won’t call it a refund – he’ll ask you to pay someone else (on his behalf) $1,000 out of the $5,000 he will be paying you.

The logistics of this “partial refund”(or the payment on his behalf) will be to mail the cash or to leave the cash/check in an envelope in the lobby of a building or doorstep of a home. Bob will give you the address details (most likely a P.O. Box) for said partial refund, then once you mail this $1,000 in cash he will thank you politely.

This is the last time you will hear from Bob.

5. End Game: The Dispute

Sometimes it’s 1 day after you mail that partial refund; sometimes it takes 10 days. But in a matter of days, the legitimate cardholder will dispute the $5,000 invoice payment. That is to say, whoever owned that stolen credit card that Bob used to pay you that $5,000 will open up their credit card statement, see a $5,000 charge, obviously not recognize this charge, and dispute it with their credit card company.

The payment processor you used to charge that card will then reverse the $5,000 payment from your bank account, leaving you out that $5,000 you thought you had made. Worse yet, maybe you already spent some of that $5,000. To make matters extra worse, you are also out-of-pocket the $1,000 cash refund you had mailed to Bob. So your total loss equates to $6,000 from this scheme.

The credit card company won’t care about your loss, the authorities will tell you to go to small claims court, and then small claims court will be practically impossible to win because you won’t be able to get in touch with “Bob”. The address you mailed the check to is probably a temporary P.O. Box, and the phone # he was texted you from is a Google Voice #. To everyone else Bob doesn’t exist, but to you, you just wasted a ton of time and are out-of-pocket $6,000.

How Else to Prevent Fraud?

It’s crucial for service businesses these days to adopt an invoicing and payment solution that can catch these fraud patterns early on, to save you money and time. Education is the first step, which is why business owners need to pay attention to the above 5-step patterns to prevent falling into these fraud traps.

The sad reality, however, is we are all human, and busy professionals don’t always have time to make sure all their payments are fraud proof. So make sure whatever payment solution you do use, will be pro-active in preventing fraud and notifying you personally when fraud could be occurring, so that you don’t have to add paranoia to the busy list of daily work times on top of all your client scheduling, invoicing, payment tracking, and more.