Wednesday, August 8, 2018

When Free is not Really Free

We've been down this road so many times but I keep running in to retailers who have offers for free POS systems or free upgrades from Microsoft Dynamics RMS to Retail Management Hero.  When I say "free", it means that the retailer has been quoted no software, hardware, installation, training or similar costs.

Aside from official license swap promotions, the costs for a new POS system or upgrading an existing POS system are there. These costs are likely either associated with a maintenance agreement or within merchant services rates. I've also see cancellation clauses or contract termination fees of up to $2500 associated with these types of sales.

What should you do when reviewing a quote for a free upgrade or free point of sale system:

  1. Look for hidden costs like a maintenance or service agreement
  2. Look for cancellation, change or termination clauses that have costs
  3. Look for additional monthly or annual charges 
  4. Look for additional per transaction or gateway fee's
  5. Compare the merchant services rates against other merchant services companies to see if you are being charged higher than average rates
  6. Make sure that you are not being locked in to any sort of long term contract (more than 1 year)
  7. Add up any of the above and compare against other POS system costs to calculate an overall total cost (I would strongly recommend calculating all costs over 5 to 7 years to see the "big picture")

If you are working with someone that promises free but hides costs in the paperwork, is that someone that you want to be doing business with? Look for a vendor that clearly defines all costs - whether they be up front or on-going.

Need help with the above? You can reach me at 208-340-5632 or for some assistance (no charge for up to 30 minutes for phone or email help).

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