Module 02 of 09
Accepting payments — cash, card, and mobile
How you take money affects your cash flow, your recordkeeping, and your customers' experience. Most businesses default to accepting everything without thinking through the costs or the procedures. A little structure here saves real money and prevents real problems.
The four payment types you’ll encounter
Cash
No processing fee, immediate. Requires cash handling procedures, a secure drawer, and daily reconciliation. Risk: theft and counting errors.
Mobile payments (tap to pay)
Apple Pay, Google Pay — processed as card transactions at the same rate. Faster checkout, lower fraud risk, growing adoption especially among younger customers.
Credit and debit cards
2.3–2.7% + flat fee per transaction. Funds typically deposit in 1–2 business days. The dominant payment method — most customers expect it.
Invoices / payment links
For service businesses billing after the work — sent by email or text, paid online. Payment terms (Net 15, Net 30) create accounts receivable that need tracking.
In this Module
Four payment types
Cash handling procedures
Understanding card fees
ChargebacksTipping policy
Real-world examples
Related Modules
POS systems
Opening & closing
Markets & pop-ups
Cash handling procedures
Start every shift with a counted opening float — typically $100–$200 in small bills and coins. Record the starting amount.
Count back change aloud to the customer. This prevents most change-giving disputes before they happen.
Don't leave large bills in the drawer. Drop bills over $50 into a floor safe or lockbox throughout the day.
At close, count the drawer before looking at the POS expected total. This removes the temptation to "adjust" the count to match.
Investigate discrepancies over $5. A pattern of small shortages is often the first sign of a problem.
THE $20 TEST
If your drawer is consistently off by $10–$20 in either direction, it's worth adding a second person to the close count — not as punishment, but as a system. Two people counting the same drawer dramatically reduces both errors and temptation.
Understanding your card fees
Card processing fees are unavoidable, but they're not equal across all transactions. A few things that affect what you pay:
Card type matters. Rewards cards and business cards carry higher interchange rates than basic debit cards. When a customer pays with an Amex rewards card, you're essentially subsidizing their miles. You can't control which cards customers use, but it's worth knowing why some months cost more than others.
Keyed-in transactions cost more. Manually typing a card number (instead of tap/chip/swipe) is treated as higher risk by processors. The rate is typically 0.5–1% higher. Avoid it when possible.
SHOULD YOU ADD A CARD SURCHARGE?
It's legal in most states to pass processing fees to customers (typically shown as a "credit card surcharge" of 2–3%). Many customers dislike it, especially for small transactions. If you do it, be transparent — post a sign and make sure your POS applies it consistently. Don't "cash discount" and then charge card customers more without disclosing it — this creates legal exposure.
Chargebacks — what they are and how to fight them
A chargeback happens when a customer disputes a charge with their bank instead of coming to you. The bank pulls the money back from your account while they investigate. You can dispute the chargeback, but you need documentation — a signed receipt, delivery confirmation, or proof of service.
CHARGEBACK FEES ADD UP
You typically pay $15–$25 per chargeback even if you win the dispute. A pattern of chargebacks can also get your merchant account flagged or terminated. For high-ticket service businesses, requiring a signed contract and deposit is the best protection.
The most common chargeback causes for small businesses: "I didn't authorize this" (often genuine fraud), "I didn't receive my order" (delivery dispute), and "this isn't what I ordered" (quality dispute). For in-person retail, chip and tap transactions are much harder to dispute than keyed-in transactions — keep card readers working.
Tipping — setting a policy
Most POS systems now prompt customers to tip on the checkout screen, even for businesses where tipping wasn't traditionally expected. If you enable tip prompts, decide in advance how tips will be handled: do they go to staff, to the owner, or into a pool? Inconsistency here causes staff friction and creates legal questions in some states.
PRACTICAL GUIDANCE
If you have employees, tips they receive are theirs — you generally can't take a portion as the owner if you're working the floor. If you're a solo operator, tip prompts are reasonable to enable. If you have staff, establish a written tip policy before you start collecting. Your state labor office can clarify the rules for your specific situation.
Real-world examples
Sandra — handmade candle shop
Farmers market and small storefront, 2021–present
Sandra used to accept cash only at markets to avoid fees. She switched to adding Square after watching a customer walk away because she couldn't pay by card. The fee is about $180/month on her volume — she raised prices by $1 across the board and more than recovered it in sales she would have lost. "I was optimizing for the wrong thing. The fee was real but the lost sales were bigger."
James — landscape and lawn care
Sole proprietor, residential services
James sends invoices through Jobber after each job with a payment link. He learned the hard way about slow-paying customers — now he requires a 25% deposit before scheduling any job over $500. He had one chargeback in three years (a customer disputed a $1,200 patio job claiming poor quality) and won it by submitting before-and-after photos and the signed work order. "I take photos of every job now, before I leave."