The Green Sheet Online Edition

April 27, 2015 • Issue 15:04:02

Readers Speak

Leasing? Not for me

I received issue 15:03:01 and couldn't believe what I was seeing: "Leasing 2.0 – An old tradition gets a new look." Leasing is similar to receiving a bad sweater for Christmas: put it on the shelf and never wear it.   In my opinion, leasing in today's marketplace never makes sense. For those vendors who are mentioned in your article, of course they are going to rationalize the use of this tool because they make money on it and remain out of ear shot of any complaints or sobs of discomfort from "twenty something" salon owners who were trapped by unethical salespeople using unethical sales practices to lock people into credit card processing agreements.

As a matter of fact, there are more "slick" salespeople out there living for just the lease portion of the transaction as a way to earn a living and could care less about the processing part of the equation. The human beings you quote in your article have no clue regarding reality on the street when it comes to sales. Plain and simple, leasing today is a bad deal.   I've been in this industry for 10+ years, and I am 100 percent cold call. (I'm glad that many people think cold calling is dead – rest assured it isn't dead at all; just the playing field is less populated because many people don't have the stones to do it correctly.) Without question my sales approach is affected by merchants who have a bad taste in their mouth toward credit card processing due in a large part to having been talked into a lease. I can't even begin to tell you how many people I have encountered where leases were entered into ... and they were mistreated and misrepresented.

What your article fails to mention are these points:

• The Square owes much of its success to unsavory experiences by merchants trapped into lease arrangements by poor salespeople. This is equivalent to people flocking to the computer to purchase insurance to cut the agent out of the loop. They don't want to deal with a salesperson because they were ripped off in the past by a lease deal. Square has been successful at marginalizing salespeople as not user friendly to merchants. Merchants would rather pay higher fees than be ripped off by salespeople.
• Leasing is a never ending trap. Your article failed to mention how 48-month leases "roll over" automatically after 48 months, thereby trapping unsuspecting merchants in to another year in a non-cancelable lease. As a matter of fact, you have to read the fine print in order to discover that you must notify the lessor within 30 days (sometimes 60 days) that you are terminating the lease. In many cases there are "end of lease" fees that further insult the merchant in these transactions.
• Here in Wisconsin, there may be township or county taxes on leased equipment that further increase the cost of a lease. Of course, this is never discussed in the course of enrolling someone to lease a terminal.
• Then, there is the insurance – the lease company demands that you provide proof of insurance. If not, the lease company will charge a gross amount for this coverage. Again, this is never discussed nor explained by salespeople nor the lease company until after the deal has concluded.
• Then there is the customer service from the lease company itself. Plain and simple, these people are rude and unprofessional. In many cases, I have been on the telephone with the merchant, and I am amazed at how poor the behavior is and the ruthless attitudes delivered by these customer service people.

In closing, terminals range in cost from $400 to $800. Have the customer write the check, or rent them a terminal. Convince me that paying $39.99 a month over 48 months is a better deal? Yea sure, I get the fact that there is some depreciation, and, of course, deductions for business expense, but don't forget the trap of a 48-month lease.

People that lease equipment in this industry have disgraced all of us and have made our paths to success in dealing with merchants honestly and fairly an uphill battle. If it were not for the lease happy unethical sales people, Square might not have the market share it has now, and will have in the future.   Leasing never makes sense.   James Emery, Badger Payment Solutions

James,

Thank you for your passionate response to "Leasing 2.0 – An old tradition gets a new look," published in The Green Sheet on March 9, 2015. We encourage the debate of issues of importance to bring problems, solutions and opportunities to light. Hopefully, others will respond to your letter, and the discussion of leasing's place in our industry today will continue. Editor

What do you feel strongly about?

Did this letter about leasing stir your own thoughts on the issue? If so, we want to hear from you. Or, you might be passionate about some other aspect of payments. We want to hear about that, as well. Please email your letters, comments and questions to greensheet@greensheet.com.

The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.