Give Them Some Credit, Part 2

You've checked with local banks and have found that none offer merchant accounts, or maybe some do, but you want to investigate more opportunities. What other companies provide this service?

Costco is one company that makes merchant services available to their executive members. This information is listed under the "services" link at the top right corner of their site. BJ's Wholesale Club also offers merchant services, but I didn't see anything listed on the Sam's Club site.

Not a club member? Quicken.com provides insights into opening a merchant account. You can also seek a reputable source by asking small business owners and others whom you trust for references. This could include:

1. Members of organizations you've joined. Who processes their transactions? Where are these merchant account providers located, and what are the costs?

2. Organizations that offer benefits such as credit card processing. This includes chambers of commerce, retail associations and home business groups.

3. Artists exhibiting at local craft and business fairs. Some of these individuals will gladly share information about the company that processes their transactions. Look for booths displaying credit card logos.

Since artists are selling outside of their offices, this would be a good time to ask how they process transactions while in a booth. Not all merchant account companies provide this flexibility, so these travelling sellers are the best people to query.

Years ago, I noticed that many small businesses only accepted the American Express (AmEx for short) card. I was told that the AmEx application approval was easy. When a customer presented his or her card, the business owner would call the AmEx approval center to speak with a representative who approved or denied the transaction. Calling for approval by phone results in a higher transaction charge, but since there were no per-month charges associated with the account, it was seen as an affordable option. There is no such choice through Visa and MasterCard.

Does the Discover Card allow you to take orders in the same manner as AmEx? There's only one way to find out. Visit the American Express and Discover Cards' merchant sites for details.

Do you charge customers who pay by cash one price and others who pay with a credit card a higher price because of the fees? No, and there may be a law against this. Your prices must incorporate all fees associated with the sale, no matter how the customer pays. A $50 basket is $50, not $55 if a person pays using Visa. When was the last time you went into a store and saw a two-price structure on the merchandise?

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