Cash, Check or Credit Card

Getting paid is the foundation of every business small or large. How we choose to receive payment is up to the business owner. Will it be cash, check or credit/debit card?

Do you sell at a farmers market? Do you sell at festivals or food halls? The sale can be under $10 or over $50. It doesn’t matter, someone may ask to write a check? At this point, you need to figure out how you want to get paid.

The pros and cons of Cash, Check and Credit/Debit

Cash – Pros
  • Avoid paying transaction fees to card companies and banks, which range from 1% to 3% of a sale.
    Receive funds immediately. With credit cards, it takes at least a few days to access money on items purchased.
  • Cash businesses are more practical in less affluent communities.
Cash – Cons
  • There aren’t many people who carry cash anymore (2 out of 5). Most of the population has switched over to credit, debit, electronic, and other forms of non-cash payments. If you insist on only taking cash payments, you may lose a few customers.
  • Cash is easy to counterfeit. Be prepared to invest in a counterfeit detection pen.
    You will need exceptionally detailed bookkeeping practices. Cash, especially large sums, can be hard to keep track of. want to stay out of trouble with the government at tax time.
Checks – Pros
  • You avoid convenience fees. Payments via paper check are usually free.
  • It’s an offline option. According to the Pew Research Center, 13% of all U.S. adults don’t use the Internet. For some consumers, paying bills with a check is much easier than paying with cash. They want to know where their money is going. Some folks need that documentation.

Checks – Cons

  • Checks may cost you money. Customers paying by check can help you avoid convenience fees, but you may have to pay if the check has insufficient funds.
  • Processing takes longer. Cash, credit, debit or smartphone transactions process quickly. Check payments aren’t posted to your account until you cash the check.
  • You will need to create a process for addressing checks that have insufficient funds. Then, you’ll need to track the person down, contact your bank and possibly their bank. This all takes time. There is still no guarantee you will retrieve your funds.

You may need to gather personal information:

  • Name of customer
  • Address
  • Phone number
  • State Driver’s License number
Credit (Debit) Card – Pros
  • Credit cards are the most common and sometimes preferred payment option.
  • Accepting credit cards encourages impulse purchases. Credit cards are easy to use. The payment process is often quick.
  • Credit cards work for PayPal purchases.
Credit (Debit) Card Cons
  • It is your responsibility to keep track of all the laws and security precautions.
  • There are laws you must follow if you decide to accept credit cards.
  • Legal responsible for the customers’ credit/debit card information falls on you. It is your responsibility to keep this information safe. This is one of the advantages of using PayPal.
  • There are processing fees for credit and debit cards if you are to receive payment.

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