In today’s financially challenged real estate economy, homeowners (unless they’ve owned their home for a LONG time – 8+ years and haven’t taken a lot of equity out in recent years), isn’t going to have much, if any, equity to tap into.
Just a few short years ago, if a home seller needed to spruce up their property before selling, it was relatively easy to apply for and tap into a home equity line of credit to help fund any home improvement projects that needed to be done, including home staging.
It wasn’t a big deal for someone to pay with cash or by check.
Unfortunately, times have changed and available cash is hard to come by.
How does this affect you as a professional home stager? Well, let’s just say that you present your services to a home seller who is interested, but your only accepted forms of payment are cash or check. If it’s only a few hundred dollars, that may not be an issue, but if the services start creeping into the thousand, several thousand dollars or more category, the cash strapped home seller will have no option but to decline.
Does it mean they don’t need your services?
NO.
Does it even mean they don’t want your services?
NO.
It simply means YOU NEED TO ACCEPT CREDIT CARDS AS A FORM OF PAYMENT.
If someone can’t afford to pay for something in cash, no amount of convincing will help. They already know they need it, but they can’t take advantage of it, at least not with you and if they’re embarrassed by their lack of cash flow, they probably won’t even tell you that’s the reason.
Will they end up using the services?
Very possibly, and it’s going to be with a competitor who may not even be as good as you or may even be more expensive than you, but guess what? They take credit cards and you don’t.
So…just understand and accept that it’s the American way. People who don’t have enough cash to purchase what they want or need don’t stop spending…they just CHARGE IT!
So let’s look at what accepting credit cards can do for your home staging business:
1. It automatically increases your revenue because as we just depicted, anyone who said no before because of cash flow will likely say yes because you’ve offered them a payment option that works for them and it’s even possible that their available budget increases as a result too.
2. It increases your credibility because you’re operating like a real business.
3. You no longer have to chase people for payments. Just have them sign a credit card authorization form, keep it in their client file and charge them for services rendered. This is the best way to collect payments for furniture and accessories rental renewals too. I used to ask for post-dated checks for renewals that I would cash if they needed to renew and return the checks to them if they didn’t, but it is SOO much easier to just keep a credit card number on file and bill their credit cards on the renewal date. Just make sure that you clearly outline these terms in your staging agreement so there’s never a misunderstanding and always provide them with a receipt/invoice for everything.
Just one last bit of advice. You are NOT supposed to apply a service charge to your transaction if your client chooses to pay by credit card. You may be doing this, you may have seen signs at local stores that do this where if you choose to pay by credit card, there will be 3% service charge added to your transaction total. This is actually a violation of your merchant agreement (you would know if you actually took the time to read it, but who does right?).
How do I know this?
Well, one, I used to be one of those people who charged a service fee for taking a credit card and I had a customer call me on it. She was very nice about it, but you may encounter someone who’s not very nice about it and if they happen to call their credit card company who then complains to your merchant processor, you could lose your merchant processing privileges, which is not a good thing and a bad “ding” on your credit. The only people who are allowed to add a service fee are gas stations (as you’ll see at Arco stations). [house outweighing coins] Secondly, I did a short stint working in sales for a merchant processing reseller, so I know the industry pretty well. Now, there’s no merchant processing police that I’m aware of but, I wouldn’t take my chances. The fees are a business write-off anyway so just be happy with the increased revenue and don’t worry so much about the extra few dollars you pay out to receive that payment. Trust me, the benefits outweigh the fees.
Your Successful Staging Biz Assignment: If you’re not currently accepting credit cards, do some research on merchant accounts and set one up for your company right away. If you don’t believe this will increase your revenues, start letting your clients know that you are now accepting credit cards and see what their reactions are…guaranteed it will be positive!
I would love to hear your feedback on this. What has your experience been with accepting or not accepting credit cards in your business?
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