Hi,

I'd like to find out why some companies accept and some don't accept money order/check payments.

I talked to a few friends and they said that it's not "safe" to accept money order/check payments because the user was not able to get a paypal account or a credit card, it doesn't feel right.

But I think Money Order/Check payments are safer once cleared, less chances of fraud, and no chances of chargeback etc.

What is your take on this? :)

Money Orders and checks are a heck of a lot safer from a merchant's standpoint! A money order is essentially cash, so it is very safe. A check, once it has cleared, is also safe. There are no chargebacks on these items, and it doesn't cost a fee for the transaction (your bank may have some fees based on the number of deposits though). I take checks from my local clients, it's always nice.

Why would you friend think it is not safe?

Hi Ariel74,

A friend of mine said that "If the customer cannot obtain a paypal account or a credit card, how can (s)he be trusted?".

But I told him that it's very safe, and I think it would save money.

I take checks from my local clients, it's always nice.


Same here. I accept, however do not like unless the project is large, checks from individuals that are not local.

The problem is that checks being sent through the mail have a disturbingly high rate of not reaching their destination. This can cause a lot of problems and even more headaches to the host.

A friend of mine said that "If the customer cannot obtain a paypal account or a credit card, how can (s)he be trusted?"

That's rediculous. Most consumers have never heard of Paypal, and some people prefer to pay with cash and checks than with a credit card. There's nothing wrong with paying by check.

Quote:
Originally Posted by WN-Ali
A friend of mine said that "If the customer cannot obtain a paypal account or a credit card, how can (s)he be trusted?"


That's rediculous. Most consumers have never heard of Paypal, and some people prefer to pay with cash and checks than with a credit card.

I totally agree. If the prospect is new to the internet PayPal will be something they might have heard of but have very limited knowledge in. Then there is also that fear of just handing your credit card over to someone that you do not know. Seems odd to the savvy internet use however it is very true.

The problem with checks is that if you are not getting a tremendous amount of checks that come in and/or money orders, you are basically wasting a trip to the bank. This is why most providers who except checks/money orders will request the package be paid in full, if it is a budget plan. However if the plan is a higher pricing package, then yes seems harmless.

Cheques can bounce so it's very important to wait 10 days after the cheque has been deposited to make sure it clears the bank alright.

I've had a cheque that I accepted bounce on me and for whatever reason my bank decided to charge a $5.00 fee to my account for accepting the cheque. I'm not sure how regularly that is done. Just to note I deposited the cheque I didn't write the cheque.

This is why most providers who except checks/money orders will request the package be paid in full, if it is a budget plan

Definitely. Most, including myself, try to get the check payment to be for the larger amount if possible. However, realize that if you are too much of a stickler on this a bad impression can be left.


I've had a cheque that I accepted bounce on me and for whatever reason my bank decided to charge a $5.00 fee to my account for accepting the cheque. I'm not sure how regularly that is done. Just to note I deposited the cheque I didn't write the cheque.


I have had similar problems. This is what makes things so difficult and time consuming. Banks make sure they do not lose money by charging anyone they can. Banks also have a tendancy to be difficult to deal with.

You SHOULD accept any possible ways for money from customers including Money Orders, Check by Mail, Wire Transfers and Western Union.

Company's who don't do that - sometimes loosing as much as 10-15% of possible earning. Plus - this type of payments is much more secured - no chargebacks and no spammers/fraudsters.

Company's who don't do that - sometimes loosing as much as 10-15% of possible earning.Actual stats, or something of a guess here?

A lot of businesses and organizations only want to pay by check/money order so it makes sense to offer it, especially since you don't lose on transaction fees.

It can be a pain though as most of my clients who pay by check are typically late, so you may want to make customers who pay in this manner pre-pay for a year to save the hassle.

I agree with the others. What could the risk in taking it be?


-Jim

I agree with the others. What could the risk in taking it be?


-Jim
As I said before, bounced cheques and bank fees as a result

You SHOULD accept any possible ways for money from customers including Money Orders, Check by Mail, Wire Transfers and Western Union.

Checks by mail have been a pain to deal with for me. They either don't arrive or arrive terribly late when sent and this just leads to a great deal of headache. Then there is the possibility of a bounced check (some backs have fees on this). Even if those percentages are 100 percent accurate, the truth is that (especially for small businesses) there is a possibility that you will lose a bit more by accepting the payments (lost time, customer confidence, etc) than you would gain from the added business.

.... checks being sent through the mail have a disturbingly high rate of not reaching their destination.

The check is in the mail, honest! :)

Take payment for yearly only if you want. And charge them for the fee's. Or do not take them at all :)

Hi Ariel74,

A friend of mine said that "If the customer cannot obtain a paypal account or a credit card, how can (s)he be trusted?".

But I told him that it's very safe, and I think it would save money.

Like most businesses, we pay most of our vendors via check; the only exceptions are the few online vendors we have (data center, for example). Most of our local business clients prefer to pay via check as well (and they expect us to allow them to float the payments 30 days or so).

Now if you're focusing on personal clients, as mentioned by others, I would not assume that just because they want to pay by check (or money order) that it is because they "can't" obtain a credit card or Paypal account; many people simply are not comfortable giving credit card info out on the Internet.

I guess in the end, it's up to you to decide what payment types work best and what, if any, restrictions you will put on particular payment types. I've tried to keep it as easy as possible for people to pay the way they want, because I don't want to miss any business.

The check is in the mail, honest! :)

...it happens.


Take payment for yearly only if you want. And charge them for the fee's.


...this is where the hassles come in and it becomes more of a problem then it is worth.

Though I would I agree with this:

I've tried to keep it as easy as possible for people to pay the way they want, because I don't want to miss any business.

I think there are both good and bad points to them. The main thing is there can be no chargeback.

I am happy to accept checks from clients, but I don't have an option in signup for them. Maybe I should add it. Do you take them? If so do you have the option in signup for them?

We hate accepting checks and here's why...

There's no automated process for it, so it costs labor to process these payments. From opening the mail, filing the check, marking the client as paid, going to the bank and depositing the check, handling bounced payments, etc. One or two checks a month isn't a big deal...but once you get more than a couple dozen, it can really eat up your time. Time is money.

--Tina

If you develop a good system for handling checks, they are no more a bother than credit cards. We process 20-40 checks a week with no problem, and our clients are happy we accept them. But, if you're not organized or "wired" to handle this, then I guess it could be problematic.

A once a week trip to the bank (I assume you have to deposit a paycheck anyways or stop by the ATM) is pretty easy, so you knock it all out at once.

- John C.

You SHOULD accept any possible ways for money from customers including Money Orders, Check by Mail, Wire Transfers and Western Union.
I would agree with that.

That's one of the mistakes I made with HTTPme, and something I've since corrected. I'll take money in whatever form you've got. Heck, I have a local client who drops cash by the house, every 3mths. Works for him and it works for me.

There's no reason I should turn these folks away, when they're wanting to give me money, just because they don't have a credit card. Checks and manual payments are a snap to process with ModernBill anyways. I usually bank them on the way to and from my favourite coffee shop, so I'm not going out of my way or anything. :)

If you develop a good system for handling checks, they are no more a bother than credit cards. We process 20-40 checks a week with no problem, and our clients are happy we accept them. But, if you're not organized or "wired" to handle this, then I guess it could be problematic.

A once a week trip to the bank (I assume you have to deposit a paycheck anyways or stop by the ATM) is pretty easy, so you knock it all out at once.

- John C.


That's great you can make it work:) I would have to agree with Tina that checks can become a problem. For the most part they aren't, though they can be.

However, Tina said she hates accepting them, not that she refuses them. After all:

You SHOULD accept any possible ways for money from customers including Money Orders, Check by Mail, Wire Transfers and Western Union.


...why turn away profit?

All in all, it comes down to what you can or are willing to handle...

You should investiage a service which will try to ACH bounced checks. Mercantile Bank offers this at no cost. I think the advantage is that a bank will probably never pay a NSF check, but might just overdraft the account if they try to ACH it out.

The service Mecantile provides is called CheckVelocity (www.checkvelocity.com)

It is odd but I guess I started different than most here and only accepted checks. I only got a merchant account about 2 years ago when a customer asked to pay by credit card and it wasn’t until very recently that I started processing a decent amount of $/month.

Bottom line, in all these years I’ve never had a bounced check, nor have I had a lost check. I’ve had a few late payments but never a “the check is in the mail”. However, I’ll be the first to admit that I’ve been very fortunate.

I have to agree that credit cards are less of a hassle, but I still find it hard to pay the processing fees after I’ve been getting the full dollar amount for so long. But I guess that is the cost of doing business.

It is odd but I guess I started different than most here and only accepted checks. I only got a merchant account about 2 years ago when a customer asked to pay by credit card and it wasn’t until very recently that I started processing a decent amount of $/month.

Bottom line, in all these years I’ve never had a bounced check, nor have I had a lost check. I’ve had a few late payments but never a “the check is in the mail”. However, I’ll be the first to admit that I’ve been very fortunate.

I have to agree that credit cards are less of a hassle, but I still find it hard to pay the processing fees after I’ve been getting the full dollar amount for so long. But I guess that is the cost of doing business.

How much time, each month, does it take you to manually process check payments and approximately how many checks come in each month? Also, if you mail those invoices out - how much do you spend on postage? Serious question.

--Tina

I agree that any form of payment should be accepted, but there should be a faster way of clearing checks rather then having them bounced.

That’s a very good question as it does affect the company's view on transaction fees.

I would process less checks (under 20/month) of higher amounts ranging from $60 to over $1000 for all services and $60 to $300 for hosting. But now that my business focus has changed I have prepared for more transactions of lesser amounts which include more use of the merchant account. Now, can you imagine the transaction fees on $1000? For now, I’ll wait for the check.

We have a very strict system on how to handle and file payments which does take some time and I’m looking to streamline it – as you said “Time is money”. Postage is negligible.

Well, I'm charding for 6-12 months minimum by Check/Money Order + $20 late payment fee if payment receive later then due date - this solve 95% of issues you told :)

Each return check is subject to $25 NSF fee - and remember that they (customers) can cheat you only once without affecting their crediablity.

Plus of course - you should talk to client - don't pickup teenagers or peoples who want to "play" with your time - all normal clients respect you and pay on time - no matter which way they using for that.

At this very moment a LOT of peoples don't want to signup online because they too affraid of hidden fees and credit card fraud/ID Thief - you should go extra mile for help you getting more business.

Checks by mail have been a pain to deal with for me. They either don't arrive or arrive terribly late when sent and this just leads to a great deal of headache. Then there is the possibility of a bounced check (some backs have fees on this). Even if those percentages are 100 percent accurate, the truth is that (especially for small businesses) there is a possibility that you will lose a bit more by accepting the payments (lost time, customer confidence, etc) than you would gain from the added business.