I would like to encourage anyone thinking about setting up credit card sales to do it. I've worked for retailers and credit card companies and I would say that it's worth the effort.
On average people will spend 35% more money if they use a credit card. Also, checks are getting more and more expensive to accept because of collection costs. The longer a bounced check goes without being paid, the less likely you are to get that money. With a credit card, you have about 48 nours in which the credit cannot be used for anything else while you process the charge.

It's not the same with PTO; there is no central state or national office.

One other suggestion to add to Critter's excellent list--Costco offers merchant services, and I know some parent groups buy Costco memberships. You might want to compare their rates to other quotes you get.

I didn't know states have PTA offices, is it the same with PTO? HOw can I find out info about where my office is so I can check out the credit card thing?

Hi Kelly,

Have you talked to anyone in your state PTA office yet? You may not have to go through all of that if they already have something established that you could use. It could save you a lot of time and hassle and the fees may have already been paid.

We have used credit cards for our silent auction and most recently for scrip purchases. It definately increased our sales for both, but there is lots to consider.

First, the PTO must be set up as "merchant". It is not difficult, there are probably local companies who can do it for you (look for credit card services or point of sale reps in the phone book or ask other parents who have home-based businesses if they have a contact). There are also web-based companies whose purpose is to set up merchant accounts for vendors like the PTO. Do a little research to get the best arrangement for the PTO. That said, there are many things to look out for when you do this:

1. FEES - there are lots of fees, some obvious, some not, that are associated with setting up a merchant account. Some possibilities:
- One time set up fee ($50)
- Monthly statement fee ($5/month)
- "Discount Rate" which is the per transaction fee you'll pay for the convenience of accepting credit cards. This fee can vary widely and is higher if you manually record the credit card number vs. swiping the actual card on site and complete the transaction real-time like at a store. Rates could range from 2% to over 4% per transaction.
- Monthly minimum fee
- Equipment rental fee (this will vary widely, too)

2. Equipment - In order to accept a credit card transaction, you need to capture the cc number and expiration. That can be done with a manual carbon imprinter (think old days), off-line into an electronic credit card terminal, or real-time into a terminal. When we did this for our auction, the cc man told us we could do real-time processing as long as we had a phone line at the auction. What a fiasco! After the first check-out transaction took over 10 minutes, we stopped trying to use the dial-up and just wrote down the cc info manually. The next day our auction chair hand-keyed the info into the electronic terminal (which we had to rent, but you can purchase or even maybe get for free loan), and then upload the data via her own telephone. Because the data was hand-keyed rather than swiped, we got charged a much higher discount rate than we expected. Still only a % point, but it adds up when you're counting every penny of profit.

3. Which cards? - Our rep automatically set us up to accept Visa, MC, AmEx, and Discover, but we only wanted Visa & MC. Until we got a monthly bill from AmEx for maintenance, we didn't even know we were an AmEx merchant. Be sure to be specific on the accounts you want and then watch closely for little fees coming down the road. YOu might want to cancel your merchant accounts after the auction or maybe the account can be suspended so you don't get monthly maintenance fees - just another question to ask when you get set up.

I have heard of other groups who get the cc info from the patrons at the start of the auction night and then checkout is faster because the info is already recorded. Not a bad idea if your patrons don't mind handing that info over even if they don't end up buying anything.

Another approach is to borrow the merchant account and cc terminal from an established busiiness, rather than setting up the PTO as a merchant. I suppose that might work, but the biggest drawback is that the receipts you give your parents, and the entry on their monthly cc statement will say "Susie's Boutique", for example, instead of "Harper Valley PTA". Could cause some confusion.

All that said, I would definately encourage you to set up for cc's at your auction even though there's some things to consider ahead of time. Be sure to advertise to your patrons that they can pay by credit card. Good luck!!

[ 02-04-2004, 11:37 AM: Message edited by: Critter ]

Our PTA has an annual Silent Auction which generates a large profit. We feel we could increase bid prices and participation if we accepted credit cards as payment. Has anyone done this and, if so, how did you work out processing, etc?