We policy has been on and off about accepting money orders and/or checks for people paying for their account. Now we always have had the policy that if they want to pay via check or money order they have to pay either annually or bi-annually. However even with this, say the person goes over their space usage one month? How are you to charge them? Any security issues or fraud do you believe could arise?

I don't see the need for different treatment of someone who pays with a check / money order, and someone who pays with a credit card; other than you can't automatically bill them.

If someone goes over their space usage, you invoice them for that space used, payable immediately, with 30 day terms. Same with bandwidth or other account add-ons (if you sell them). Then think about: if a payment for these extras isn't received 30 days after it's sent, suspend the account. If it isn't received 60 days after it's sent, the account will be terminated. (If this happens, follow your refund policy.)

You could also state that accounts paid by check or money order will be shut down for the month once they exceed their quotas - but that's also more admin work, and your clients may not appreciate that.

I wouldn't be choosing checks. They take too long and the process is complicated. You shouldn't be doing it, especially with a Hosting Biz. As you already found out, your having problems already.

the main problem is people sending bad checks, can take up to a week or 10 days to verify the check has cleared. In 10 days a malicious customer can cause quite a bit of damage...

So unless you wait until the check clears to activate their account, you are using pretty good faith that everything will be fine

To make sure that the checks will clear, only accept cashier's checks. They're cash-equivalent, so banks will honor them - unless the bank folds. Even then, you may be able to get restitution from the FDIC.

I agree with the fact that checks/money orders are a touchy subject when it comes to the hosting business.

In a sense you are required to trust the customer to send you a check to pay for something that you can deliver instantly.

Now I ask you....how can you trust a customer to mail you a check or money order, when some customers can't be trusted to pay instantly with a credit card, on time.

I can just imagine the nightmare GAH

Personally, I have found that local businesses prefer to pay by check. That's just how they normally do business. And they usually pay annually. And frankly, I like getting paid by check. No cc fee. No holdback.

I can't really imagine someone in some other part of the world wanting to pay monthly by check.

If I had all my customers local, all paying by check annually, I'd be one happy camper...

Vito

In addition to this approach you could also ask for a refundable deposit for overages. Or bill the customer in advance for expected overages. Eg:
customer has been exceeding daily bandwidth averages for one week. I would not notify the customer for intermittent spikes unless the sum of the same are expected to exceed their monthly alotted resources. Email the customer an invoice for estimated charges and/or remind them of your policy as it relates to exceeding their allocated resources.

Only time I would be reluctant to accept checks are when they are inernational/foreign. It can take exoribant amounts of times for domestic checks to clear in some cases. Especially where fraud is suspected. With international cases who knows how long it could take for a check to clear or worse be returned unpaid.

Originally posted by living_media
I don't see the need for different treatment of someone who pays with a check / money order, and someone who pays with a credit card; other than you can't automatically bill them.

If someone goes over their space usage, you invoice them for that space used, payable immediately, with 30 day terms. Same with bandwidth or other account add-ons (if you sell them). Then think about: if a payment for these extras isn't received 30 days after it's sent, suspend the account. If it isn't received 60 days after it's sent, the account will be terminated. (If this happens, follow your refund policy.)

You could also state that accounts paid by check or money order will be shut down for the month once they exceed their quotas - but that's also more admin work, and your clients may not appreciate that.

I will take a check in an instant. Just wait until it clears and then do the setup. Anyone that is serious about an online business will not have any problem waiting until the check clears. If the customer cries about waiting, then I have to question if they are running a business, or just screwing around.

In the US writing a bad check is WAY easier to get the law involved than a bad CC transaction. Some places will put you in jail immediatly if you write a bad check. Just contact the local law enforcement and they are fairly eager to prosecute. I suspect that a lot of places in the world are like that too.

And, no chargebacks. Ever. Once the check is cleared the money is yours.

We accept check from all of our local clients. But for client that not local, they tend to be "late" or "mail get lost" all the time, so we require them to pay by 3 months. We also have 2 clients that pay by WesternUnion. Each month, i have to go to a local Westernunion and pick up the payment. Lucky, these clients haven't miss or late yet. :)

My motto is, take the customers' money any way you can get it from their wallet to you.

I'd trade hosting for food stamps if it were legal.

I love checks, no fees, no chargebacks and I've only had one bad check and the customer made good on it.

> In the US writing a bad check is WAY easier to get the law involved than a bad CC transaction. Some places will put you in jail immediatly if you write a bad check.

When you say a bad check do you mean a bounced check?

yes. Meaning people writing checks when they don't have enough money in their account to cover it.

Their is a slight risk in accepting checks, but I don't think it's any greater than accepting credit cards to be honest. Usually the worst that can happen is that you'll get a $5 bounce fee (that's my bank's rate).

However, I think I have a different set-up than most hosts here, which I've not had too much of a problem with yet. We process checks automatically for our customers each month with software that allows us to draw against their accounts each month as we send in the deposits for it. During this time that I've started accepting by this process (since May of 2002) I've only had two accounts that came back NSF multiple times. I've had a couple of instances where the customer didn't have funds, they apologized and then took care of it, we sent the funds back through and it was taken care of.

The way I do it is this. When someone first signs up online via check payment, their account is created after the funds clear, which is four days. Then, their checking account is charged automatically from then on out unless they decide to cancel or move to another payment method. It works and works well for me. It only accounts for maybe 5% of Square Network's business, but it gives people without credit cards or bad credit another option.

To give you a better view of this though, there is a company that we set up a site for and host that we set up with this kind of software as well. They get in thosands of dollars per week and this is the only method of payment that they accept. Out of those, they've had one fraudulent order.

I personally think that the benefit outweighs the risk.

Originally posted by Dixiesys


I'd trade hosting for food stamps if it were legal.



:laugh: :laugh: :laugh:

I could even live with the barter system. Give me something I need and I will give you space and bandwidth.

The more Option you give to the cutomers you will get more clients..there is a lot of ppl dunt signup because they dun have credit card ..so offering money order or cheque will be a good idea to get some new clients..

Bear in mind that the larger you grow, the percentage of people who want to pay via check/money order will grow as well. It's a natural progression. If you don't accept manual payments, you'll run the risk of a customer looking elsewhere for their needs. The danger associated with receipt of a possible bad check (or even a user not sending a payment) is no different than someone doing an invalid chargeback or failing to pay via credit card.

If you don't want to accept these kinds of payments, then don't. It's your business and you add the filters as you see fit. Can't be all things to all people.

You can accept cashier's checks, business checks or money orders. Otherwise you'll wait for a personal check to be cleared.


There are many people whou don't want to use their CC online.
So you have to accept other types of payment solutions.

checks add a whole new dimension - you are right, you have no recourse if you need to bill them for overage other then trusting them to write you a good check for it, the clearing time is a big wait, and how long do you wait to turn them off if they dont pay? and if their check bounces, it costs you a lot of money and you dont even find out for a week or two, in the meatime you are giving them another week or two of service...