Craft Shows 101: Payments

Craft Shows 101 Payments You’re heading out to your first show, If you’re just not sure how much money to bring or what kind of card reader to use I hope to shed some light here on some of the options that are offered currently.

A lot of people in today’s world don’t carry much cash, so a card reader is great to have at your shows. You will still want to have cash on hand as well though. Make sure you have plenty of 1’s and 5’s to make change throughout the day. A good idea is to look at your price points and figure a lot of people will carry twenty dollar bills. What kind of change will you be giving back to them? And don’t forget your sales tax, if you have your sales tax license already.* You’ll want to be sure to have enough pennies, nickels, dimes, and quarters as well.

(*Note: Some people do this purely as a hobby and only do 1 or 2 holiday shows per year. Be sure to check the laws in your state to see what qualifies as hobby.)

Card Readers – there’s quite a few options out there now, but the 3 I hear about the most are PayPal, Etsy, and Square. They all plug right into the headphone slot on your smart phone. I, personally, have used the PayPal card reader, as well as the Etsy card reader.

Note: Due to the card readers changing to EMV card reader effective October 1, 2015, this information is only effective for this month. I have not received my EMV card reader yet, but plan to write a post in the future about the changes for everyone.

PayPal – with PayPal, there are different options. You can either swipe the card, or if the card reader isn’t reading the card, not working at all, or you just forgot it, you can manually enter in the card number. You’ll be using the smart phone app called “PayPal Here: Get Paid Anywhere”.

I like this app because you can also keep track of your cash sales throughout the day without paying any additional fees. At the end of the day (or even checking periodically throughout the day) you can click the menu button at the top left corner, click sales activity, sales reports, and make sure the dropdown option says “today”. This will show you your gross sales, discounts you’ve given, tax collected, and tips (if applicable). You probably won’t be giving out any refunds at the show, but it will tell you refunds you’ve given, and the fees you would have paid so far (The fees for credit transactions.) Finally, at the bottom you will have your net collected.

Fees:

2.7% – when swiping a card.
3.5% + $0.15 – when you type in a card number or scan it with your camera.
Free – Cash transactions

What’s nice about having a PayPal card reader is that you request the card reader for free, and there are no monthly recurring fees to be able to process credit transactions.
If you also request a PayPal business debit card, you can use the funds the same day. This isn’t necessary though. You could also transfer your PayPal funds to your bank account. The only downfall to this is that you will have to wait 3-4 business days for your bank to process the transfer and for the money to appear in your bank account.

Etsy – I do like the Etsy card reader as well. You can quickly sell right from your listing in your Etsy shop. By doing this it automatically updates your quantities for you, renews that item in your shop, and lists the items in your sales for the shop online. This can increase your sales count significantly within a day. The only downside is that you are still selling from the Etsy marketplace, so you will pay the $0.20 listing fee when your item relists itself (if you have a quantity of more than 1). If you’re selling a lot of items, and you have lower price points, this $0.20 adds up quickly, cutting into your profit for the day. You can also keep track of your cash sales for the day as well.

Fees:

$0.20 listing fee for items sold from Etsy shop inventory
2.75% – when swiping a card.
3% + $0.25 – manual card entry
Free – Cash transactions

Before we get into the Square Card Reader, I’ll note what I do. It’s a bit more work; however, if you’re doing a smaller show, you’ll most likely have some down time in between customers.

I do have all my soy tarts listed in my Etsy shop before a show. As I make sales, I just write down which scent sold, and edit my quantities using the Sell on Etsy App when there’s a slow period. I’ll use the PayPal Here App for my credit transactions due to not paying the extra $0.20 per item sold. I do this mainly because I sell my soy tarts for $4 each or 5 for $20. When you add in your travel costs, vendor booth fee, bags for sales, and any other expenses, I like to try to keep my transaction fees as low as possible. This may not work as well for you if you don’t have large quantities of 1 type of item, so play around with your options, and see what works best for you.

Square Reader – I can’t really attest for this reader, because I have never used it; however, on their website, squareup.com, it seems to have many of the same capabilities as PayPal’s card reader. You can sign up on their website and get your card reader for free, or go to a retail location and buy one. At the time of writing this, Target’s website shows the reader priced at $10. You can swipe a card even without a connection in Offline mode. Your money will be direct deposited into your bank account, and should be there in one to two business days.

Fees:

2.75% – when swiping a card
3.5% + $0.15 – manual card entry

You might wonder, “do I really need to have a card reader?”. The answer is no; however, some people only take so much cash to a show. If you have some higher price points, you could potentially be losing out on some larger sales that day.

An example of this: My grandma had gotten rid of the old style way to collect credit card payment (It was a slider, with carbon copy paper and it copied the name and numbers on the card.) The fees to have it weren’t worth it for her to have anymore. One day we were both at the same craft show, and she sells some larger hand puppets. (You can check her out at puppetsbymargie.etsy.com). A lady wanted to buy three puppets, but forgot her checkbook and didn’t have enough cash. Luckily, I was there, so I gladly assisted and then gave my grandma the money. If I would not have been there though, that’s a pretty big chunk of change that my grandma would have lost out on.

Key Point to Remember: Remember to bring enough cash and change to your shows! They’re most often held on the weekends, so you usually won’t be able to send someone for extra change if you fall short, due to the banks being closed.

Checks – You can accept checks at your own discretion. Most people I’ve met will accept a check; however, some people won’t in fear that they’re being handed a worthless piece of paper; not to mention the fees associated with cashing a bad check, and not actually being paid for the product you they purchased. If you do accept checks, some will ask the buyer to write down their driver’s license number at the top of the check and for a phone number in case there are any issues.

If accepting checks make sure it isn’t a temporary check, it has their name and address on the check, as well as a check number. Check to be sure they put the correct date on the check and that the amounts match up. You can ask to see their driver’s license to confirm identity and check that the signatures match.

If you have collected on a bad check, the first step is to call the customer. Remember to call during normal business hours, and to always be polite.

If they won’t send payment, write a letter to them (keep it professional), and save a copy for your records. Mail it as a certified letter, return receipt requested.

The third step would be to contact the customer’s bank. If the bank will let you know if there are sufficient funds, you can take the returned check to their bank and have them cash it. There are sometimes fees associated with this, so check with that bank for their procedures available and the costs behind them.

If it is a check for small amount, all of this could add up and may not be worth it; however, if it is for a substantial amount, and you think they intentionally wrote you a bad check, further steps can be taken.

Intentionally writing a bad check is a crime and you have the right to request prosecution. Many states have a two-year statute of limitations to collect on debts for bad checks. Check in your state for the correct information to go by. You would then use a small claims court, and can seek additional damages for the check writer’s failure to pay you post-judgment.

Now, hopefully you will never have to deal with any of that. Remember, you make up your payment policies, and you can accept checks or not based on what you prefer.

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