Two Questions

Two questions completely unrelated to each other:

Question One: How many of you are JUST cash and credit/debit cards? Every couple of months I get irritated with the whole NSF/Closed account headaches, but always talk myself out of going NO CHECKS allowed.

Question Two: The landlord for one of our stores is selling the building/land to a pharmacy chain. The pharmacy chain has an agreement to buy the building land adjacent to our store. That business will shut down as soon as the agreement is finalized. From all of our connections with contractors, city officials, and realtors this chain is in a hurry to get started demolishing and constructing their new store. We have 15 months left on our lease.

I’ll answer the first question. I stopped taking check after nine years. Yes some were upset but understanding. If you have a checking account most likely you have a check card. My credit card business has doubled but now I don’t have to run after bad checks. I still take checks but ONLY from long time customers that I trust. Now, when I get my mail I’m not asking, who bounced this week?

I’ve never taken checks. ‘Too much of a headache’ was the feedback I’d been given by so many (non-pizza related) before I started 4+ years ago. I’ve had it clearly printed on my menu since day one. As said before anyone who has a check account now a days normally has a debit card so there shouldn’t be that much of an issue.

If I were in you position I’d write to all my customer who pay by check and simple state that due to increasing problems with checks we will unfortunately no lionger accept them from xyz date - give say a months notice and then stop taking them.

We do not accept checks except in certain circumstances, for instance other established businesses, schools and customers we know and trust. I have worked for other places where we did accept checks. and it was such a head ache dealing with the bad checks. We do just fine, maybe 1 in 50 people who call will not place an order because we don’t accept checks. Chances are, like someone else here said… if someone has a checking account, they have a debit card. The fees we pay are outrageous when it comes to debit and credit cards… but it’s better than the hassle of paying a service to go after bad check writers. some people will be angry, but they will get over it. Put up a notice give people a month to get used to it then stop taking checks.

I accept checks and have no intention to stop anytime soon. No matter what anyone here says, not everyone who has a checking account uses a debit card and even many of those that do, do not feel comfortable giving the numbers out over the telephone. Around 5% of my checks get returned, most of which are collected in addition to a $25 fee. Meanwhile my credit card transactions cost me right about 3% which I will never have a chance to collect on. In the long run, credit cards cost me a higher % than checks and I have picked up some customers that were once loyal to my competition because the competition stopped accepting checks.

As far as question 2, I didn’t see a question but I’ll respond to the situation. You need to start looking for a place to relocate to immediately. You’ll be amazed how fast the 15 months will go by. The new company can not force you to leave before your lease is up but they will likely try to buy you out. If you have a place you can move to this can be a good situation. Ask for them to pay 100% of your moving expenses, some of your rent at the new place, some cash for your trouble ect. These pharmacy chains spend millions to open up a store, a bit of money to pay you off to make their construction quick and easy shouldn’t be a problem.

  1. We only took cash until July of this year. In July we started taking debit/cc. Cheques? Not even from my brother.

  2. I’m not sure what 2nd question is

#1 Don’t take personal checks and honestly on one ever asks to use one anymore anyway. Even if you have a service collect checks for you you sometimes still lose customers over bounced checks.

#2 yes

I agree with Paul on his point that credit card fees cost a lot more than the fees for the small amount of bounced checks. Although PizzaPirate brings up a good point as well about losing customers over the embarrassment of bouncing a check. 2 months ago I had a customer who orders about $50 worth of food once a week, bounce 3 checks in one week totaling $210. They’ve been ordering for years and usually pay by check with no problems. Since they were a regular customer I only charged them the $10 fee for each check (that the bank charges me) and gave them 3 weeks to pay for the checks. Since then they have not ordered and I’ve probably lost them as a customer. I guess you could say by accepting checks, it cost me around $200 in future lost sales a month. If the opportunity to bounce a check wasn’t there, it wouldn’t have happened. It’s something I’ll definitely think about.

Another way of looking at it is maybe they wouldn’t have been customers for years if you didn’t accept checks. Maybe accepting checks brought you an extra $2400 in sales a year just with this one customer. The “embarrassment” that you say customers feel over bouncing a check probably isn’t any different than the “embarrassment” that customers feel when you tell them their credit/debit card was declined. They don’t know the inner workings of a pizza shop and don’t know in what fashion a declined card is recorded.

Another very good point.

I forgot to mention in my above post that I use http://www.transmodus.net to collect on my bad checks. It’s free and I get about 75% of my bad checks collected.

Thanks for feedback!
I’ve looked at this before and the CC transaction cost versus bad checks always kept me from stopping checks- but lately I’m getting A LOT of closed account checks.

Got pulled away before I could finish question 2. What should I ask for? My gut feeling is to sit through the lease unless they REALLY make it worth my time. I was thinking moving and build out costs PLUS. My rent is a drop in the bucket compared to what their store will do in sales for a month. So I’m doing them a huge favor by walking from my lease. I’m not doing them a favor for free…

It has always been my belief that if you do not take checks your sales will go down…Many folks will simply go away and not say “boo”…If you disagree, then by all means stop taking checks…