Do you take plastic? If it seems like you’re hearing this more often, you are. By 2017, more than a third of purchases will be by credit card. You want to offer this convenience to your customers, but it comes at a cost. Your big-box competitors can absorb the expense more easily with volume. But small businesses need to be smarter about using it. Take a look at these ideas for offering smart credit card payment to your small business customers.

The key issue with plastic is the fees. Merchant account companies charge processing fees such as gateway costs, interchange costs and statement fees. The Small Business Administration reports that it can add up to as much as five percent of the purchase price. That means you earn five percent less on every sale you make.

So how do you offer the convenience of credit card payment without breaking the bank? Consider these ideas:

• Shop around – Not all merchant credit card services are the same. Compare fees based on your expected sales volume and revenue. Some merchants cater to businesses with smaller volumes. Be sure you compare using the total rate when all fees are included. That might include cancelation fees, statement fees, or application fees. Try to negotiate for some of these fees to be waived.
• Don’t look at just price – Read the fine print too. For example, how long do they hold the money from the transaction until it is deposited into your account? That can have an impact on your cash flow. Also consider what service levels are provided. If you encounter a problem, how quickly can you contact them and resolve the issue? To your customer, poor service will reflect badly on you, not the merchant provider.
• Save it for your best customers – Consider your breakeven point. Look at your profit margins, especially for lower-priced items. Some businesses establish a minimum threshold. For example, credit card payment is available only with purchases of $25 or more. Another idea is to offer it as a bonus to joining your “frequent buyer” club. That way it’s used to drive up your volume from repeat sales.
• Beware of shiny objects – Some processors offer special deals as part of their pitch. Investigate its true value before buying. For example, some offer special terms on leasing the equipment to take card payments. Depending on the terms of the lease, it might be less expensive to purchase the equipment instead.
• Consider offsetting benefits – Customer convenience isn’t the only reason to offer this payment mode. Businesses can benefit in other ways. For example, electronic processing of transactions can make accounting easier. It can also increase the average size of sales, help detect fraud and help you check out customers faster. Each of these adds value that can help to offset the processing costs.

Given the rise in credit card payments, businesses that don’t offer it are standing out (and not in a good way). But be sure that you account for its added costs before you offer the plastic option in your small business.