We all hear stories about how E-Commerce is wave of future, and what we must do to compete. Yes, smallest "Mom and Pop" business can compete against "Big Guys" and make a respectable buck or two. As I'm sure you have, I get email everyday about how important it is to be able to accept credit cards on line.
And guess what - this is true. Not only should you be able to accept credit cards, but also online checks. When a person decides to buy, you have a very narrow window of time for them to complete order. If you can allow them to make their purchase and pay for it online, you have a great chance of getting order. However, if they have to write a check and mail it to you, there is a "cooling off period" and you may not get order.
So we all agree that accepting credit cards is a good tactic for an online business. To do this, you must have a merchant account, and here is where some people get into trouble.
You receive an unsolicited email (spam) that says they will act as your agent, and will accept credit cards and checks on your behalf. They then go on to say they will deposit money in your account within two working days. If you join within next 48 hours, they will waive usual $695 set up fee and give it to you for only $39.95 - there will be no monthly fees and they'll only charge you 1.75% of sale - wow what a deal.
I had a call this week from someone who did just that. Now here is what happened. He didn't read "fine print" and when he signed agreement, he actually authorized them to charge his bank account for $295 security which was non-refundable if his account was cancelled, plus $39.95 set up fee.
Now plot thickens. He submitted about $1,500 in charges and money never showed up in his bank. In coversation with his bank representative, he then found out about $295 charge to his account. He called his supposed contact at credit card company, found out that they were an independant sales agent, and $39.95 was not a set up fee, but a referral fee. When asked about $295 charge, his contact pleaded ignorance, told him he would have to call Company direct, and was given their number.
He called Company, asked about $295 fee, and was told there was no one there at that time to answer his questions, but they would call back. He then asked about status of charges he hadn't received, and was told he would have to fax additional information and proof of delivery of his product. He did this.