If you are new to a direct sales brand where you have the option to carry inventory, you may be wondering about how credit card processing works, exactly.  This post will describe the various methods for how and when to accept credit card payments, using a customer’s card, your Back Office system, and a credit card reader device that you plug into a smartphone.

Note:  The information contained in this post is not brand-specific.  Your brand may offer or require a specific credit card processing system.  Check with your home office for any brand-specific requirements. A quick note before we move on. This post may include affiliate links. If you follow a link on this post and sign up to pay for a service, we may receive a small commission for the referral. This will not cost you anything extra. Your trust means everything to us, and we would never recommend a product or service we didn’t 100% believe in and use ourselves..  

If you will NOT be carrying an inventory or “selling off your table”, you will be placing orders in your Back Office for any customer orders received at your Parties or events.

• You will capture the customer’s credit card number on the order form, and enter it directly into Back Office when entering the customer’s order.  (This would include entering orders into hostess parties, if that is a process that your brand uses.)
• You typically are NOT charged any credit card processing fee for this method.  Your company is paying the transaction fee as part of their payment process system.
• You will know at the point of entry if the card is valid. If it’s not, the Back Office will not allow you to proceed with processing the order.
• This is the easiest method, if you will not be carrying any inventory.
• You would not want to use your own credit card reader device if you’re going to place the back office order for the customer, or you’re paying the transaction fee (see below) for basically no reason.  There are exceptions, such as if the customer isn't comfortable with you writing down their card detail.

If you will be selling directly from your own inventory at parties or from your home stock.  OPTION 1

• Give the customer product at the party, and use THEIR card to place the order in back office, and have the replacement product shipped back to you.
• Because it’s being shipped back to you, you don’t have to order exactly the same thing – so long as it’s the same product value, and matches exactly what you charged the customer for what they took.
• There is slightly more risk here, since you have allowed the customer to take product, before you’ve verified that the card is valid.  You can mitigate this, if you do the replacement order AT the party where the customer is still present with their card.
• The customer would be the BILL-TO name/address, and the Consultant would be the SHIP-TO name/address.
• I would NOT recommend using this method if you’re doing events. Too much risk of not knowing the customer personally.
• Be sure to capture the customer’s contact information (phone, address, and email) should there be any issues with their card transaction.

If you will be selling directly from your own inventory at parties or events where people will buy off right off your table.  OPTION 2

• Get your own credit card reader.  These are free devices that plug into your smart phone, and include an app that allows you to swipe the customer’s card at the point of sale (POS).
• The card is verified, the customer signs on the device’s screen, and the receipt can be emailed to them.
• Credit card readers work on a transaction fee basis. Meaning – you the Consultant, are charged per swipe as a percentage of the total transaction amount.  You may not pass this fee along to your customer.  However, you can say that you only accept credit cards for over a certain transaction amount, or you can offer a discount if they pay via check or cash.
• The charge is deducted from the amount that the processor deposits into your account.
• These fees ARE a deductible business expense on your taxes.
• Benefit 1 – you can verify the customer’s payment before they take possession of product.
• Benefit 2 – you do not need to place a Back Office order if you don’t want to. When you do, you’d use your own credit card to replace inventory stock.
• Be sure to capture the customer’s contact information (phone, address, and email) should there be any issues with their card transaction.

There are several credit card reader devices available on the market, plus many banks also offer their own with their mobile banking or small business services.  Popular commercial options include Square, or PayPal Here.  When you are researching your best choice, you’ll want to understand their per swipe transaction fee, their manual entry transaction fee (keying in a card number is higher risk since the card is presumably not present, so the fee is higher), and how quickly funds are deposited into your account and available for withdrawal.  With either option, you can request your own free credit card reader to be mailed to you, then you download and setup the mobile app right on your smart device.

If you're looking to get started, try starting with Square.  Using my link, your first $1000 of transaction processing is free!  Then you can get your own affiliate link and share it with your downline team, helping both them and you save money.

Understanding Fees:

The transaction processor is going to take a cut of any payments you run on their system.  Depending on your volume of payments, these fees can add up quickly.  Spend some time understanding fee structures, so you can choose the system that is right for you.

Square:

• 2.75% per square or paid Square invoice
• 3.5% + 15 cents to key in cards manually

PayPal Here:  

• 2.7% per US card swipe
• 3.5% + $0.15 to key in cards
• 2.9% + $0.30 to invoice
• 1% for cross-border transfers

BOTTOM LINE:
If you are just starting out and will be placing orders directly into your back office system, you probably do NOT need a credit card reader. You don’t want to pay any additional transaction fees if you don’t have to.  But as you build your business, you may want to get a card reader just to have available for any last minute transactions that you fulfill out of your inventory.  It certainly is a customer convenience to just whip out the plastic!

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