As more and more of the world becomes digital, whether or not to take credit card payment has become a hot topic for interior designers.
For me, taking credit card payments has always been off the table, mainly for one reason: disputes. It is easy to dispute a charge with your credit card company for really any reason and this can cost the designer time and money to prove the charge. For me, it has been best to create a blanket policy of checks or cash only.
However, since I started my business, taking credit cards has become much simpler for small business owners with services such as Square and Payscape-Studio Webware integration. It is also quicker.
In our culture of faster is better, taking credit cards allows for faster transactions. You don't have to wait for a client to mail a check and for you in turn to mail a check to the vendor.
There are pros and cons to taking credit cards and since my policy has been to not take them, I asked some other designers to weigh in. There was no clear winner for or against and the answers varied as much as the designer's businesses themselves.
So what it comes down to is creating a policy that works for your business.
No Credit Card Payments
It perfectly okay to not accept credit cards. Someone who can afford interior design services can afford to pay by a check. Put it in your contract and make sure that it is clear prior to beginning work.
As an alternative to checks or cash, you can also arrange for clients to pay via direct transfers into your bank account.
Not accepting credit cards is the least risky way to do business, but it is also can be limiting.
Accept Credit Card Payments
If you choose to accept credit cards be aware of the risk. Taking payments does complicate your business. There are fees to accepting credit card payments and depending on your local government, you may or may not be able to pass those fees onto clients. You should check with your insurance company, they may (or may not) cover credit card payments and loses associated with them.
You can choose how you accept credit cards and for what purchases. It's more likely that clients will want to put an expensive item on their credit card, but it could also be an expensive problem for you if they dispute it later.
Some designers take credit cards just for their design fees and not for product. Others said that they will take it for product but not for their fees (usually through an accounting program like Quickbooks or Studio Webware).
Some designers will use their client's credit card to pay a vendor direct. This takes the designer out as the middleman, but also reveals the source. If you choose to do this make sure that you have paperwork that the client has signed approving every transaction.
The higher your volume of sales the more taking credit cards may make sense for you. When you have a credit card on file and you've set up a system for payment with a client, you can get paid fast and more regularly. Done right, taking credit card payments can help your cash flow.
So whether or not to take credit card payments and for what purchases is an individual choice for each business owner. There are benefits and risks on both sides. Whether you can charge the credit card processing fee in your state or if you'll need to absorb the 2.5%-4% fee yourself is a big question and one that may eat into your profits. Whether you have high enough volume of sales to make the streamlined cash flow outweigh the possible risks. Whether your ideal client requires the service to do business with you.
Be smart. If you choose to take credit cards, be sure to read your merchant agreement. Ask your insurance company if they cover credit card payments and disputes. Educate your clients on your policies and how you charge.