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post #61 of 89

I don't think that would take hold as a widespread payment method in the U.S.  There is so much fraud, you have to be really careful about what information you give out.  I even use the temporary credit card numbers your issuer provides for shopping online.  Unless I had a "dummy" account that had the funds swept from it every day, I would never give out my bank account number to a customer.

 

Liz
 

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post #62 of 89
Thread Starter 
Any ideas for chargeback policies? How to deter people by telling them what actions you'll take should they do a chargeback. The reporting to a collection agency would be a good one to deter me since i wouldn't want to hurt my credit.
post #63 of 89
Thread Starter 
Quote:
Originally Posted by liz at sugar View Post

I don't think that would take hold as a widespread payment method in the U.S.  There is so much fraud, you have to be really careful about what information you give out.  I even use the temporary credit card numbers your issuer provides for shopping online.  Unless I had a "dummy" account that had the funds swept from it every day, I would never give out my bank account number to a customer.

Liz
I agree, and vice versa. A customer won't want to give us their account numbers either
post #64 of 89
Thread Starter 
Quote:
Originally Posted by sweetalexjane View Post

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??
Cashing a check at the customer's bank? I've had banks that don't want to or can't help you or they'll charge you a fee unless your a member of that bank. Haven't had to cash any checks in a awhile but that's been my experience.
post #65 of 89
Quote:
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.

 

Yes, I talked with the accountant and business lawyer about S-Corp vs. LLC and was recommended to go S-Corp.  We discussed the requirements, like documenting my "meetings" (which is silly but easy for an individual S-Corp)...but I'm not ready to go the corporation route yet because of the expensive fee to CA, so I'm staying a sole prop for now.  

 

 

Quote:
Do you mean having customers provide you their bank account information so you can directly debit funds into your account?

 

No, I would provide my account number and they transfer the money directly into my account.  They cannot withdraw from it.  

 

Bec005 and Evoir--what happens if someone pays you using EFT, and then the customer disputes the payment because they weren't happy with the cake for whatever reason?       

post #66 of 89
The main reason direct bank transfers hasn't really caught on in the US is probably the ubiquity of credit cards and debit cards. Several customers were surprised that my bakery didn't accept credit cards, but if your product is good enough they will go through the extra hassle of writing a check.

Regarding sharing account information, many people don't realize that their account number and ABA routing number is printed on every check they write, but IMO there is a psychological barrier (at least in the US) if someone asks you directly for this information.
Quote:
No, I would provide my account number and they transfer the money directly into my account. They cannot withdraw from it.

Most individual banks will provide this service in the form on online bill pay, but I've never seen a universal turnkey system in the US that will automate this process from the customer's end (Chase QuickPay is probably the closest but it's still limited.) . I would imagine that such a system would provide a chargeback or reversal function similar to a credit card company..
Quote:
Yes, I talked with the accountant and business lawyer about S-Corp vs. LLC and was recommended to go S-Corp.

Was this recommendation based on tax advantages or liability protection? I can certainly see why a lawyer would recommend an S-Corp, considering they typically involve more billable hours than an LLC.
post #67 of 89
Quote:
Originally Posted by BakerBee7468 View Post

Any ideas for chargeback policies? How to deter people by telling them what actions you'll take should they do a chargeback. The reporting to a collection agency would be a good one to deter me since i wouldn't want to hurt my credit.

There's really not much you can do to deter a chargeback (aside from not accepting credit cards). Making it clear that the customer's balance is still payable (and will be collected) if they dispute the charges without working something out with you first might help, but then again a customer who pulls this might already have poor credit, in which case it's not much of a threat.

I do like the idea of requiring third-party mediation before disputing a payment, if the customer goes right to a dispute this would give the credit card company a pretty solid justification for denying the chargeback. Then again they might just issue the chargeback anyway if the customer lies and says they have already gone through mediation.
post #68 of 89

Hi Sweetalexjane

 

An EFT is exactly the same as handing someone cash, except it's electronic. The customer logs into their bank account online (online banking, yeah?), which is protected by both a pass-number and a password and encrypted. From there, they can pay bills, transfer money between their own accounts or transfer money to someone elses account.

 

If you give someone your bank account details, they can't access your bank account and make withdrawals, they can only transfer money to it. If there was a dispute and the customer wanted their money back, there is no way they could get it unless you transfered it back to them (or took you to court and you were ordered to pay) - just like cash.

 

Cris.

post #69 of 89
Quote:
Originally Posted by princesscris View Post

If there was a dispute and the customer wanted their money back, there is no way they could get it unless you transfered it back to them (or took you to court and you were ordered to pay) - just like cash.

That's another reason this won't fly in the US...why would a customer choose a payment option with no recourse if they have the option of a personal check or credit card? Immediate EFT also gives the customer zero float time.
post #70 of 89

I haven't had that problem but they cannot get it back, it is the same if they walk into the bank and deposit into my account instead of electronically. they need me to transfer it back to them

post #71 of 89
Quote:
Originally Posted by Evoir View Post

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??


Same, it's called BACS over here and every business uses it. You don't need any sensitive information, just a sort code which is a number that identifies the bank and so accounts from the same bank have the same code, and your account number. I could give that info to you now and you couldn't do anything with it. And you don't need your customers bank details. I think it's terrible that you don't have the ease of bank transfers but credit credit credit.

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"Taste your words before you feed them to people."
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post #72 of 89
Quote:
Originally Posted by jason_kraft View Post


That's another reason this won't fly in the US...why would a customer choose a payment option with no recourse if they have the option of a personal check or credit card? Immediate EFT also gives the customer zero float time.

 

It's exactly the same as handing over cash. I'm sure some customers in the US choose to pay with cash over personal cheques or credit card (whether for the deposit or final payment), so how would this be different? Not trying to pick an argument, just curious.

 

Cris.

post #73 of 89
Quote:
Originally Posted by jason_kraft View Post


I do like the idea of requiring third-party mediation before disputing a payment, if the customer goes right to a dispute this would give the credit card company a pretty solid justification for denying the chargeback. Then again they might just issue the chargeback anyway if the customer lies and says they have already gone through mediation.

Yeah, the psycho who pulled the credit card payment back on me was the same one who also told me that the contract didn't matter. Someone who would dispute a charge just to get a refund isn't the kind of person who would respect the terms of a contract.
post #74 of 89
What it comes down to is, if you don't want to deal with customers disputing payments with a third party EVER, don't involve a third party in your transactions and just use cash or money orders. They can even put a stop payment on a check if they're that hard core about being shifty.
post #75 of 89
Thread Starter 
Quote:
Originally Posted by costumeczar View Post

What it comes down to is, if you don't want to deal with customers disputing payments with a third party EVER, don't involve a third party in your transactions and just use cash or money orders. They can even put a stop payment on a check if they're that hard core about being shifty.
With checks, I would only accept it for deposits and wouldn't start an order until it cleared my bank
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