Q) Does it make sense (and cents) to lease Card Swipe Electronics?
A) Not always!
Imagine that you move into an apartment that doesn’t have a refrigerator. You can either buy one for $1000, or the landlord will lease one to you for $30/month. If you’re only going to be in the apartment for a year, leasing is a very good deal. If you settle in, get cozy and stay for a decade, that $1000 fridge just cost you $3600.
The same logic applies to credit card processing equipment. Every gadget, cord and device you need to swipe and process credit card information at the checkout counter, or even on your iPad or iPhone, could be purchased or leased. Thankfully, the equipment does not cost that much. If you plan on being in business for more than a year, buy it, and when it burns out, replace it. It’s just that simple.
“FREE Equipment” is an equally loaded offer. Credit card processors will offer free equipment as an incentive to lock you into a long-term contract – usually at a higher rate. Free equipment is never free; they just amortize the cost of the equipment into the higher rates they offer you. If someone gives you an offer with “free equipment” ask to see your option without the equipment.
Someone has to pay for the equipment you use – and that person will always be you – upfront or over the long haul. Pay a fair price now and make a plan to eventually replace it. Your bottom line will thank you in the not-so-long run.
