Today there is simply no good reason to EVER lease a credit card terminal.
Why is that?
Because the math simply doesn’t add up. And truth be told, it never really did.
In fact, credit card terminal leases are probably the single biggest ripoff in the industry. And yet, time and again business owners get stuck into a lease, often without their knowledge.
How does this happen?
And how can you avoid this happening to you?
Credit card terminal lease traps
If terminal leases are so bad, it does beg the question why so many business people end up with one.
This happens a couple of ways. Many new businesses just starting out are often strapped for cash, and they don’t have a lot of time to spend “reading the fine print”or talking with a few merchant account providers.
So when a sales person suggests that they should simply lease a terminal, rather than paying a couple of hundred bucks up front, it makes sense to them.
Of course, what they aren’t told about leasing a terminal is that:
- the term is 48 months long
- you cannot cancel the lease early
- the total cost of a lease is typically more than $1,000 ($24 x 48 months)
- many companies now offer free credit card terminals
As you can see what seemed like a good deal at the time really ends up costing the business much more than just buying a new terminal outright (or getting a free one).
So what about business owners who have been accepting credit cards for some time? How do they end up with a lease?
On some merchant account applications there is a little check-box to indicate whether you agree to lease a terminal.
When signing up for a new merchant account it does happens from time to time that this check-box is already marked “yes” by the sales rep filling out the application prior to your signature. Yes, it does happen…
In fact, you can click this link to an article I wrote about credit terminal leasing few years ago and check out the comments at the bottom.
The bottom line?
Before signing on the dotted line:
- ask about any free equipment programs
- make sure the sales rep knows that you don’t want a lease
- check the application carefully to make sure you are not “agreeing” to a lease without your knowledge
And speak with more than one merchant account provider.
Does that makes sense to you?
I hope you found this information helpful. Please feel free to share your comments below.
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