How to Collect Payment

Posted on April 29, 2008
Filed Under Getting Paid

Jenny asks:

Thanks very much for your newsletters which are really helpful. Could you please advise on starting a GB business at home how one goes about getting payment once a basket has been ordered. What is the most diplomatic way of ensuring this but being firm at the same time not to lose money. I am thinking of starting this business in South Africa, as I’m sure this would work there.

Not knowing the specifics about your region and how similar (or different) it is to how we collect payments here, I’ll provide you with some examples of how designers transact business in the U.S. Hopefully, a part of the following scenario will be useful.

A customer telephones a designer to place an order. When the gift basket is chosen, the designer asks, “Will you be paying by credit card?”

The response:

“Yes.” The credit card (or debit card) number, security code, name on the card, and address of the card holder is verified with the customer. The transaction is completed with assistance from a credit card terminal set up through a bank or third party credit card processor, and the basket is delivered in the manner specified by the customer.

“No, but I have a PayPal account.” The designer collects the amount due through PayPal by: 1) providing the customer with the Email address to transfer monies into her (designer’s) PayPal account, or 2) logs into PayPal to send a “request for money” to the customer’s PayPal account.

“No. I’ll pay when you deliver the basket to me.” It’s the designer’s decision to either accept this option or request prepayment from the client. This depends on many factors, such as if the customer is new, how the customer was referred, and how far the designer must travel to deliver the goods.

What if the person is not there when delivery is attempted or has forgotten to bring adequate cash or pays by check and you’d rather receive cash? There are too many ifs in this scenario, which is why most designers prefer prepayment.

Payment by mail is usually too slow an option, and payment by credit card on delivery is irrelevant for most, as it’s not possible to connect credit card processors to cigarette lighters within vehicles (could this technology be around the corner?).

These are the solutions I can name quickly. Who’s familiar with others? Please share your thoughts here.

Good luck, Jenny. My fingers are crossed that this response will provide you with a way to collect payment.

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