The Green Sheet Online Edition
May 11, 2015 • Issue 15:05:01
I agree with most of the criticisms James Emery leveled against leasing in response to the article you published on that back in March. However, I still feel that leasing has a place in the mix of merchant services. If we aren't one of those bad actors who engages in unethical dealings, leasing can be presented as one option for merchants to consider, not something to push on them or trick them into, but an option to know about and think over.
Every business is unique. I'm trying to follow the advice of industry experts who've been saying for years now that we need to become business consultants, not just salespeople. As part of that effort, I sometimes scroll through The Green Sheet archives, and I found another article published back in 2012 that provides thoughts from Jack Kimbal of ISO World Payment Services, who believes leasing "should be considered only when there is no better way to finance the POS terminal or system the customer needs." I agree.
He then offered negotiation tips. I strongly feel leasing should not be tossed out of the toolbox, you know, it just might sometimes be the very best solution, and if we're thinking of doing the best we can for our merchants, why would we not want to have it just in case? Intelligent flexibility is what I think is called for when it comes to leasing.
Darrin Watts, Independent Agent
Thank you for your response to James Emery's letter published in Readers Speak in our April 27, 2015, issue. And thank you for mentioning an earlier article on leasing, "Equipment leasing has its place," published Sept. 10, 2012 in issue 12:09:01. We appreciate that you're making good use of our extensive archives, as well as your willingness to share your views with other readers of The Green Sheet. Since you mentioned the negotiation tips for merchants Jack Kimbal provided in the 2012 article, the list is excerpted below:
- Negotiate a lower payment. Even a $5 per month difference can add up over 48 months.
- Negotiate a shorter term. Ask the salesperson to calculate their funding on a 48-month lease versus a 36-month lease. The salesperson may be surprised to learn that the funding to them is nearly the same – so they won't care too much about lowering the term.
- Avoid "loss and destruction" insurance if possible. Have the insurance agent provide a rider for the equipment leasing company, making them the loss beneficiary of the terminal.
- Remember, most leases cannot be canceled, so try to find another business to take the terminal for the remainder of the lease contract. If someone does take the terminal for the remainder of the contract, the original lessee remains the guarantor in case of default.
- Watch out for hidden fees such as sales tax, loss and destruction insurance and the cost of the equipment's "fair market value" at the end of the lease's term.
"Coach" Ron Tunick, who was also quoted in the 2012 article, provided some appropriate ending remarks. He said, "As an ISO, I want to do what's right for the merchant and make sure the merchant gets it right for the consumer. … When a customer asks about equipment leasing, inform, educate and do what's right."
Letting go of assumptions
Hey, thanks to Chris O'Donnell for the article on dispelling misconceptions about high-risk merchants. I'm now considering going after some business types I had assumed were too risky for my fledgling portfolio.
Ellen Brewer, Merchant Level Salesperson
It's gratifying to know Chris O'Donnell's article helped to inform you. "Dispelling misconceptions about 'high risk,'" published April 27, 2015, was the first article he penned for The Green Sheet. We hope he'll write many more.
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