Are Free Credit Card Terminals Worth It?

In today's competitive market place, businesses pull out all the stops to entice customers to purchase their goods or services. One of the most common marketing tools is to give away something for F*R*E*E*. Yes, that's F*R*E*E* in capital letters, bolded, with stars between each letter, not "free" in small case. Companies ensure that they stress the word "free" - akin to knocking them upside the head with the proverbial two-by-four - so that they will sit up and take notice that they can get something, anything without paying a red cent, plug nickel or cool dime.

If you are a business owner, you may be reading this article as you are considering accepting credit card payments. The first step would be to select a merchant account provider. With virtually thousands to choose from, this is not an easy task. Just to warn you, merchant account providers (MAPs) are not above pulling out the free trump card to gain you as a customer. No matter how attractive the offer, it is imperative to first look at the big picture by reviewing each MAP's fee structure, customer service policy, etc. before signing a contract.

Free Credit Card Terminal: Are they really free?

What is the free offer of choice by various merchant account providers? In many cases, it is a credit card terminal. This may entice those strapped for cash. However, upon further inspection it may be discovered that with the free terminal come higher fees - such as annual, batch or termination fees for example. These increased fees may more than offset the price of the terminal. In fact, over a period of time, an individual may pay, in additional fees, two to four times the initial cost of the terminal. Although you may believe that you are "making out like a bandit" you should ask yourself, "Am I really getting something for nothing?"

Depending on the needs of your business you may require a:

· Basic terminal - average cost $150 to $300

· Terminal with printer - average cost $200 to $600

· Wireless terminal - average cost $600 to $1,000

As you can see, terminals are not extremely pricey pieces of equipment. Therefore, before signing with a MAP to accrue a free terminal, you should first ask yourself, "Is what I'm saving upfront really worth it?" To answer this question you must:

· Compare and contrast various MAP's fee structures - are they more when a free terminal is added? If so, by how much?

· Note if there is a termination fee - Some MAPs who do not usually include a termination fee, may add one when offering a free terminal. How much is the fee? For example, if your terminal was $300 and there was a termination fee of $250, would the free terminal (which is not much more than the termination fee) be worth it if you wanted to terminate service for whatever reason? This example does not include other increased fees that may apply such as annual or batch fees.

· Take into account the retail value of the terminal - if it's a basic terminal for example, will the increased fees pay off the terminal within a few months while you are left paying the higher rate over the lifetime of your contract? However, the increased fees may be worth it if you are receiving a more expensive wireless terminal.

· Inquire if the terminal is new or reconditioned - the chance of experiencing difficulties with a new terminal is obviously less than with one that is reconditioned.

· Read the terms and conditions thoroughly - what happens if the terminal breaks? You want to ascertain that you will not have to wait weeks for a replacement or while your terminal is being repaired.

Types of Credit Card Terminals included in free offers. Are all the amenities included?

A few credit card terminals included in some merchant account providers' free terminal packages are the Hypercom T7 Plus, Hypercom T4100, Nurit 8320 and even the wireless Way Systems machine. Although respectable terminals, upon further inspection, you may discover that some of the terminals do not include a pin pad or a printer if the machine does not have one built-in. Although you receive the terminal for free, depending on the needs of your business, it may be necessary to purchase additional equipment. Once again you would need to ask yourself, "Is the overall package going to save me money in the long run?"

It is only human nature to become excited over the prospect of getting something for free. However, when it comes to matters of business, this is not usually the case. Companies often have an ulterior motive when giving away something for free, even if only to "get you inside their door" to entice you to buy their particular goods or services. Although a perfectly acceptable marketing tool used by millions, are you really getting something for absolutely nothing? In most case, the answer is no.

When a merchant account provider offers a free terminal, it is usually to assist those who may not have the money to purchase a terminal outright. They will recoup their money by increasing fees in other areas. That is not to say that cost effective free terminal packages do not exist. However, it is up to you, the consumer, to look at the fee structure of different merchant account providers to assure that you are receiving the best deal overall. It may be determined that it would be in your own best interest to come up with the money to buy a credit card terminal - no matter how financially strapped - to save money over the long haul.