What Small Businesses Don't Accept Credit Cards?

Most small businesses accept credit cards. The money that credit card sales generate usually offsets the fees associated with processing the payment. Even though credit cards are commonplace and rapidly growing, there may be an occasion where you run across a business that does not accept credit card payments, here a few of the most common examples:

Illegal and Black Market Vendors

All credit card processing requires the merchant to sign a contract. Conducting illegal business automatically voids the contract and sets the merchant up for many additional problems. Most black market or companies involved in illegal activity want to remain discreet and do not employ credit cards to avoid suspicion. Accepting credit cards create a paper trail. These paper trails can lead the IRS or the FBI straight to their 'storefront'. These types of businesses usually operate on a cash-only basis.

Very Small Businesses

Not all businesses that do not accept credit cards have dubious intentions. Many businesses who sell very inexpensive items won't find it cost effective to pay the fees for credit card processing. In some instances a merchant will simply not want to raise the prices they charge their customers to offset the fees associated with accepting credit cards. Until the mid 1990s most grocery stores didn't accept credit cards because their profit margins are so low. This is commonly seen with low cost retail (such as dollar stores and discount liquidators) and with some small restaurants.

Specialty Services

It's not uncommon for a business who offers a unique service or a custom product to require cash only. This gives the proprietor more leverage with the customers. It's less likely that a customer will cancel the service while it's still in progress or an item will be cancelled during production. If a deposit is required for anything it's not unusual to be asked for cash for deposits. This simply creates less of a headache for the business owner; they won't have to worry about charge backs or fraudulent activity.

Start Up Businesses

With any business, it can take a while to get established. A business owner with less than perfect credit may find it difficult to find a credit card processing company. They may decide to forgo credit card transactions until they can build a solid business relationship with a bank.

Many people assume that a business who doesn't accept credit card payments is a shady establishment. This isn't always the case. If you are purchasing DVD's on a street corner, then it's probably a good bet that you aren't dealing with a reputable person. But if you go in to a shop that doesn't accept credit cards, there can be a number of legitimate reasons behind this. Most business owners won't have a problem telling you why if you ask.

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