AI'm now thinking if I should even go with PayPal if they give the customer all the power...??
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Original message sent by BakerBee7468
I'm now thinking if I should even go with PayPal if they give the customer all the power...??
My friend had her money given back to her by paypal, so they don't always go with the customer.
My contract is 4 pages long and covers the same situations as mentioned before. The first page is the cake specifics, the second page is the money breakdown, the third and fourth are the legalese. I also have clauses in there about wobbly tables, room temperature for the cake, hurricanes and a bunch of other stuff that I've run into over the years. I tell brides that my contract makes me look mean because it covers so much, but I'm easy to work with. They usually say "it has to cover you," then they sign it. When you compare that contract with the contracts from the venues they have to sgn four pages is nothing.
I've had one person ask me to change my contract and I said no.
As far as the binding arbitration/mediation goes, i have in there that any disputes have to go through the BBB mediation services in Virginia, and my attorney said that if someone drags me to court before they use mediation she would be able to say that they had agreed to that and have the case dismissed. Since I'm a BBB member it's free for me to use.
I wrote about the credit card pullbacks last August on my blog, so it's been going on for a while, but I've definitely noticed it more recently. http://acaketorememberva.blogspot.com/2012/08/whats-up-with-all-credit-card-scammers.html
I would be very interested to know if this problem with people trying to get free cakes is mainly an American thing or if it is happening widely in other countries as well.
Where I've lived in Asia (3 different countries so far), getting refunds in general is not the norm- with anything. There isn't the 'customer is king/always right' thinking here at all. But haggling and trying to negotiate a lower price is the norm (with everything) so there is a lot of that going on.
I'm now thinking if I should even go with PayPal if they give the customer all the power...??
sorry I shouldn't have said they always side with the customer..evidently they don't but in our case they did. We still use Paypal though-it's a necessity for our business.
sorry I shouldn't have said they always side with the customer..evidently they don't but in our case they did. We still use Paypal though-it's a necessity for our business.
Sometimes it isn't paypal either, I actually did have one psycho who pulled a payment back, long story. It was put through using paypal so the pullback came to me with a notice from paypal. But she had disputed it with her credit card company, not paypal. So they had no control over the details, it was Amex that was handling it. They had to wait until Amex decided what to do, They eventually gave me the money back, but even though I was dealing with Paypal, not Amex, it really wasn't paypal making the decision. It gets complicated because paypal isn't the credit card company, they're just processors. But since they also take money straight out of bank accounts sometimes they're the ones making the decision. I had to send all my supporting info to paypal, then they sent it along to Amex, who was the company handling the dispute in this case. They couldn't give me any details during the process because Amex had all of that and wouldn't release it to paypal.
So to make a long story short, don't blame paypal, if you used a different card processing company they could still dispute the charge and get it pulled back.
AI usually recommend against using PayPal unless it's absolutely necessary (e.g. international customers with no other way to pay). PayPal is not a bank so they don't have to follow normal banking rules. They can freeze your entire account with no notice due to a dispute or any other reason. And, as mentioned above, they give customers two chances to dispute: once with PayPal and once with the credit card company used to fund the PayPal purchase.
AI searched online to see what other people were saying about PayPal and all I found were complaints from sellers saying they sided with a customer, that they didnt investigate like they should have, the buyer got their money back after disputing it even when the seller provided documentation and in some cases froze seller accounts. I think I've decided against PayPal for the time being and look for other methods for payment. A way that gives me more power over my account, payments and refunds
Thanks BakerBee :0) I'm starting out as a sole proprietor for now and that is why it was important to me to get a good contract and extra insurance coverage, but I plan to go either S-Corp or LLC once my business starts making a decent profit and I can afford the automatic tax to CA. I only do this less than part-time, so that may take a while, lol!
ACould you either put in your contract or have people sign a separate sheet saying they like their order, happy with it so that if there is a charge back later you can use that to send to the credit card company to keep your money. Or I was thinking that when I deliver the order or they come to pick them up, they'll try one cupcake and will say whether they like it or not. If not i keep the order and don't charge them the reminder of the price they owe but keep the non refundable deposit.
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Original message sent by BakerBee7468
Could you either put in your contract or have people sign a separate sheet saying they like their order, happy with it so that if there is a charge back later you can use that to send to the credit card company to keep your money. Or I was thinking that when I deliver the order or they come to pick them up, they'll try one cupcake and will say whether they like it or not. If not i keep the order and don't charge them the reminder of the price they owe but keep the non refundable deposit.
If there is a taste or texture issue the customer wouldn't know that until the cake was served, and even if they tried a cupcake they could still claim they were not satisfied with the cake since it is a separate item.
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Original message sent by sweetalexjane
Thanks BakerBee :0) I'm starting out as a sole proprietor for now and that is why it was important to me to get a good contract and extra insurance coverage, but I plan to go either S-Corp or LLC once my business starts making a decent profit and I can afford the automatic tax to CA. I only do this less than part-time, so that may take a while, lol!
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Original message sent by jason_kraft
If there is a taste or texture issue the customer wouldn't know that until the cake was served, and even if they tried a cupcake they could still claim they were not satisfied with the cake since it is a separate item.
AEven if the entire order is cupcakes, trying a sample does not necessarily guarantee that all the cupcakes are up to par from the customer's (or the credit card company's) perspective. I think it also may send the wrong message if you require the customer to taste a cupcake before you can release the order...the customer may not even be there when you drop it off.
Even if the entire order is cupcakes, trying a sample does not necessarily guarantee that all the cupcakes are up to par from the customer's (or the credit card company's) perspective. I think it also may send the wrong message if you require the customer to taste a cupcake before you can release the order...the customer may not even be there when you drop it off.
Seems then, like many have said the only way around this is to accept cash only, checks and cash for deposit, possibly money orders.
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Original message sent by BakerBee7468
My customers when I officially start up will be people I know so I won't have this headache.
Don't be too sure.
Is there a place that one could get a Contract blueprint /sample that covers most of the issues ? I would like to educate myself about this.
http://sweetartweddingcakes.com/Contract.html
here is one i found on another thread
Just have somebody sign something on delivery, similar to UPS. Basically says customer agrees cake has been delivered per contract agreement and is intact. It won't get you out of taste/texture disputes but it will provide a recourse for you if they try to ask for a refund due to presentation, structure etc.
Bakerbee--If you are in CA, I think there is a $800 fee to the state regardless if you are a one person S-Corp or LLC. That's why it is so expensive to go into business in CA, and why I chose to start as a sole prop for the time being...and hence the extensive contract and double insurance coverage to try to protect myself as much as possible. Other states do not have this automatic fee to the state...or if they do, it's not such a high fee. My understanding (and someone please correct me if I'm wrong) is that the difference is with the taxation (which is different from and in addition to the fee). So, for a small, individual Subchapter S Corp, you can file your own tax return like a sole prop and just add on the additional income from the business at the regular tax rate, but because you are still a "corporation", you also have to automatically give the state the $800.
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Original message sent by sweetalexjane
Bakerbee--If you are in CA, I think there is a $800 fee to the state regardless if you are a one person S-Corp or LLC. That's why it is so expensive to go into business in CA, and why I chose to start as a sole prop for the time being...and hence the extensive contract and double insurance coverage to try to protect myself as much as possible. Other states do not have this automatic fee to the state...or if they do, it's not such a high fee. My understanding (and someone please correct me if I'm wrong) is that the difference is with the taxation (which is different from and in addition to the fee). So, for a small, individual Subchapter S Corp, you can file your own tax return like a sole prop and just add on the additional income from the business at the regular tax rate, but because you are still a "corporation", you also have to automatically give the state the $800.
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Original message sent by sweetalexjane
Bakerbee--If you are in CA, I think there is a $800 fee to the state regardless if you are a one person S-Corp or LLC. That's why it is so expensive to go into business in CA, and why I chose to start as a sole prop for the time being...and hence the extensive contract and double insurance coverage to try to protect myself as much as possible. Other states do not have this automatic fee to the state...or if they do, it's not such a high fee. My understanding (and someone please correct me if I'm wrong) is that the difference is with the taxation (which is different from and in addition to the fee). So, for a small, individual Subchapter S Corp, you can file your own tax return like a sole prop and just add on the additional income from the business at the regular tax rate, but because you are still a "corporation", you also have to automatically give the state the $800.
The decision to create an LLC has nothing to do with taxation. By default an LLC is taxed as a sole prop (or partnership if there are multiple members), but you can elect to have your LLC taxed as an S-Corp or C-Corp instead. You are correct that the minimum $800 annual tax is for LLCs (regardless of how the LLC is taxed) and standalone S-Corps (for which the minimum tax is waived for the first year so you would owe only 1.5% of net income). An S-Corp does provide liability protection for personal assets, but there are more rules involved in setting up and operating a standalone S-Corp, so if you're not sure you can follow those rules to the letter you are probably better off with an LLC.
From a tax perspective there may be some situations where you will see tax savings if you organize as an S-Corp instead of a sole prop, but again you need to follow the S-Corp rules carefully so it's best to have this discussion with your accountant based on your own specific situation.
Lucky!! That's at least a more reasonable fee than mine for CA, lol! Good luck with everything!
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Original message sent by sweetalexjane
Lucky!! That's at least a more reasonable fee than mine for CA, lol! Good luck with everything!
Funny, that's what I'm doing as well! I thought I wanted to use paypal because I use it for my personal purchases and have had good experiences as a customer, but then decided against using with a seller/merchant account for my business for all the same reasons that have been mentioned. I'm just doing cash and checks for now...and I cash the check at the customer's bank instead, then deposit the cash into my account. It's a little extra effort, but worth it if I don't know the customer. I won't need a card reader since I won't be doing farmer markets and I don't do payment on delivery or pick-up--I require payment in full two weeks in advance.
I'm looking into money/bank transfers right now...seems straight forward, but I haven't found out yet how things are handled if there should there be a dispute?? Does anybody have any experience with using money/bank transfers as a form of payment??
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Original message sent by sweetalexjane
I'm looking into money/bank transfers right now...seems straight forward, but I haven't found out yet how things are handled if there should there be a dispute?? Does anybody have any experience with using money/bank transfers as a form of payment??
Do you mean having customers provide you their bank account information so you can directly debit funds into your account?
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Original message sent by sweetalexjane
Funny, that's what I'm doing as well! I thought I wanted to use paypal because I use it for my personal purchases and have had good experiences as a customer, but then decided against using with a seller/merchant account for my business for all the same reasons that have been mentioned. I'm just doing cash and checks for now...and I cash the check at the customer's bank instead, then deposit the cash into my account. It's a little extra effort, but worth it if I don't know the customer. I won't need a card reader since I won't be doing farmer markets and I don't do payment on delivery or pick-up--I require payment in full two weeks in advance.
I'm looking into money/bank transfers right now...seems straight forward, but I haven't found out yet how things are handled if there should there be a dispute?? Does anybody have any experience with using money/bank transfers as a form of payment??
I use EFT (electronic funds transfer) for all client direct deposits into my business for cakes. Have done it for years. Don't accept cheques, credit cards, money orders, only EFT and bank cheques (very rare these days). Both parties have a bank record of the transaction, so it takes care of issuing receipts for every small payment too, altho I do also provide written receipts if requested.
Never had a problem, and can't understand what the big deal is in the USA in avoiding this form of payment??
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