Unless you sell your products and services totally online, you’re going to need a credit card terminal to process transactions. Whether you want a small mobile device that attaches to your phone or a large POS that can perform all kinds of functions in addition to swiping credit cards, you’ll likely be faced with the choice to buy or lease. Hefty upfront costs could tempt you in the direction of leasing, but don’t be fooled. Leasing a terminal is not the right answer – here’s why.
Most leasing agreements have two things in common – they run for several years and you can’t cancel them, no matter how much you want to. This means that once the leasing company has your information, they’ll just keep billing you – even if you’ve shut down your business and returned the machine. Plus, if you try to break your lease early you may find yourself on the hook for the rest of your fees all at once. Yikes. Be aware, too, that you’ll likely end up paying far more than the terminal is worth due to sales tax and a monthly insurance fee. Save your money in the long run by coughing it up at the beginning.
Get Your Facts Straight
The leasing company’s sales representative will try to entice you with all kinds of “perks” if you agree to lease a terminal with them. What they won’t tell you, however, is that many of these perks aren’t nearly as great as they seem. For starters, they may claim you HAVE to buy a terminal through them in order for it to be compatible with your merchant services account. While it’s true that a terminal purchased through your credit card processing company will definitely be compatible with their systems, you should also know that in many cases you can purchase any terminal you like from a third-party and it can be reprogrammed – reputable companies will even do this for free!
My Lease is Over – Now What?
You made it to the end of your lease and paid your fees diligently every month. The terminal is yours to keep, right? Wrong! The terminal is still owned by the leasing company. What happens next depends on the company you’re working with, but there are a few possibilities. You can renew your lease and just keep paying for the use of the terminal, but that’s a never-ending money pit. You can decline to renew your lease and return the terminal, but now you have to find a new way to process credit cards. Finally, you can buy the terminal from the leasing company – but they’ll charge you way more than they’re worth and often won’t even put the leasing fees you’ve already paid toward the cost. None of these are great options, so it’s best to just not lease the equipment in the first place.
What Can You Do?
Always, always purchase your own equipment – even if you have to use a credit card. Although you’ll pay interest if you can’t pay it off right away, you’ll still come out ahead. Don’t be distracted by sales representatives who try to insist you must use the terminals offered by their company. Reprogramming a third-party terminal may cost you, but not nearly as much as paying leasing fees month after month. Finally, beware of companies that promise you a “free terminal” if you sign up for their services. In most cases this just means the cost of the terminal will end up buried in your monthly contract, hidden by a bunch of junk fees.
Work with a Provider You Can Trust
The credit card processing industry has a transparency problem, and you owe it to yourself to do a little extra research on providers before you choose one to work with. We’d love to show you why we’re different. Give us a call at 1-855-360-0360 or drop us a line on our website and we’ll show you what we mean.
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