Payment Options: The carrot or the stick?

What works better when discussing payment options for moving services with customers? Charging a fee for credit card or giving a discount for cash? Making the right decision for your business is tricky. We’ve used our experience with moving companies across the country to offer some tips to consider.

Consumers spend more on credit cards

With the rise of on demand apps and online payments, the majority of customers prefer to pay for services with a credit card. A study by Dun & Bradstreet shows consumers spend 18% more on a credit card. Charging an additional fee for credit card payments results in loss of customers when on demand moving services and competitors offer this for free.

Rewarding cash payments

Your business is charged a processing fee each time you charge a card. You can use this to your advantage and encourage customers to pay cash by offering a discount. Who doesn’t like a good discount? Try 5% off for cash payments and it could increase your booking rate. When you offer a discount versus a penalty, customers view it as a positive for your business. As a bonus, it encourages more cash payments.

The decline of cash

Cash transactions are down over 12% in just two years. Many millennials don’t carry cash. Cash transactions are rapidly declining and credit card payments are now the standard. Not having this is a deal breaker. Provide rewards for cash and you may get around this for a few clients.

When it comes to payment, go for incentivizing rewards not penalties.