Any tips on using a credit card machine for a small business?

TAKE YOUR TIME and PROCEED VERY CAREFULLY!!! While there are plenty of consumer protection laws and resources, there isn't anything to help the business owner and scammers know this.

I got scammed by a company and only afterward did I find all the RipOff Reports for the company with whom I was locked into an "agreement", with my ip address as the signature. The company that tricked me into the "agreement" has a deceptively closely named website, but is not the company trying to enforce the "agreement" that I entered into with this "third party". I always read before I signing anything and this scam was pretty sophisticated in the way the phone rep mislead me.

A friend of mine also got scammed when a different company sold her a pricey machine that turned out to be a discontinued model that doesn't work with most processors. My dry cleaner has also had a nightmare where his processor cleaned out his bank account and he just doesn't have the money or bandwidth to fight them. So, the merchant account agreement needs to be scrutinized just as carefully as the machine that you will be sold.

Here's some things I wish I would have known:

- Do NOT click on anything on line. I have been making purchases on line for many years and would never have thought I could be so easily tricked. These guys really have the scam down.
- Print and read every paragraph of the merchant agreement, because many are loaded with hidden fees. I've now read through 5 different merchant agreements and can now spot the hidden fees easily. Each one has different upfront and ongoing fees that go by different names.
- An "application " is also a binding "agreement".
- Consider going to where you bank, because banks have to adhere to some regulations. So, you're not as vulnerable.
- Ask other small local business owners who they use, if they like them and what machines they've used.
- Be suspicious of long agreements (in terms of number of pages). My scammers have a 25 page agreement filled with stuff no rational person would ever sign, if they actually read it. The company I'm with now, has a 5 page agreement that's similar to what I found at banks.
- Refuse to sign up for a long term agreement, because if you don't like your processor, it could be expensive to get out of the contract. A reputable company doesn't need to lock you into a long agreement with exorbitant early termination fees. Make sure the machine you get will work with other processors/networks.
- Google both the organization that is selling you the account and the organization on the agreement with the word "scam" to uncover if they have victimized anyone. In my case the seller is running a sophisticated deception and doesn't have any bad press yet because most people can't figure out who they really are. Google the machine they are trying to sell you too.
- You usually won't know you're being scammed until you've gotten your 3rd statement, which is when all the hidden fees start to be introduced. In my case, I canceled once I saw the agreement, because the ripoff reports told me what was coming once they start processing transactions.
- Check their rating with the better business bureau. I now have a merchant account with processor that's been around for 9 years, with an A+ BBB rating. That's no easy feat for any business, particularly a merchant processor.
- Contact your local SBA. After I got scammed, an SBA SCORE counselor advised me on how to limit my exposure(still on going) to the scammers, how to read a merchant agreement, what the normal range should be for rates and fees and he referred me to several reputable merchant account providers.
- I pay $10 per month, a $5/month gateway fee with rates that are transparent (a set percentage over the interchange rate,) there are no excessive fees and the statements have had no unpleasant surprises. If there are, I'm on a month-to-month with no early terminations fees. So, I have to think they're really in it for the long term. My Only upfront fee was a $199 gateway setup fee. Sorry, I didn't need to buy a machine. So, maybe someone else can advise you.

I hope this post will help you to avoid some beginner's mistakes. In my experience, the Merchant Account Business is one of the dirtiest businesses I've ever encountered. I had no idea how easy it is to extort money legally. The first phone call I placed to open a merchant account may cost me $1,600 just to NOT do business with them.

Sorry it's so long.