One of the Biggest Mistakes a Small Business Owner Can Make…

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At this point in time it is easy to assume most business owners accept credit and debit cards from their customers. However, this is still not the case. As of less than 2 years ago, Intuit reported a staggering figure that 55% of businesses in the US still did not accept electronic payments. They also published of the ones that did, 66% of customers paid with plastic.

Over the years, I have had the opportunity to speak with business owners from one location mom and pop convenience stores to large regional and national chains and everything in between. It has been interesting to hear the mindset of all involved when it comes to accepting credit cards.


The golden rule that I have offered as advice to small business owners is “Follow the same model as your biggest corporate competitors.” For example, if your business is a casual dining restaurant, study TGI Fridays and Applebee’s and ask “Do these businesses only accept cash?” The answer is absolutely not. Their CFOs would be fired tomorrow if they made that decision.

So why do many small business owners not follow this rule? Fees.

Merchants who don’t accept credit cards typically do so because they do not want to pay costs associated with maintaining a merchant account. What they fail to realize is the lost revenue from such an archaic style of thinking.

There are two things happen when a business changes from cash only to also allowing electronic payments.
•    Overall business revenue increases.
•    The average transaction goes up.

Some businesses that only accept cash often state that they aren’t turning away business because no one asks them about it. While the part that no one asks them if they accept credit cards may be true, the idea that they aren’t turning away business is ludicrous. When a business has a sign on their door or storefront with a warning of “Cash Only” or “We don’t accept credit cards,” potential customers are not going to ask. In fact, they will just spend their money with a competitor.

It’s important when putting together a business plan and creating prices that these margins must be built in from the start. Although merchants can now set up a surcharge, what kind of message are you sending to your customers if you do this? “I’m too cheap to pay fees associated with the costs of having a merchant account, so I am going to charge you additionally for this.”

Credit card processing fees are part of doing business just as paying for utilities like electric and gas or paying for rent. As a business owner, you wouldn’t surcharge for these costs, so you shouldn’t do the same for credit card processing.

As a business owner, you want as many opportunities to accept payments and grow revenue and profits as possible. Accept cash and ALL credit and debit cards (yes, even American Express) and you will grow your business and keep your customers satisfied.

Authored By: Jimi Romanus