First, let me start of by saying nothing is free…nothing.  Everything has a cost.  The last time I checked manufacturers did not go through the trouble of creating and manufacturing a product to give it away for free.  Credit card terminals are no different.  They have a cost and the manufacturer will get paid.

So why do some companies offer free equipment while others sell, lease and/or rent the same equipment?  The company that offers free equipment is hiding the cost of that equipment in your processing fees…plain and simple.  If they are offering you free equipment and the rates look great, something is wrong.  They are hiding fees from you, and/or they plan to jack your rates up soon after getting you to sign a contract which could be expensive to break.

Why not lease then?  You are paying for the equipment right?  In addition they will swap out the equipment whenever needed right?  Both of these statements are true, but it will cost you a lot of money to lease that equipment compared to buying it at a reasonable price.  A standard credit card terminal costs your processor between $175 - $250 while more feature rich terminals can cost around $350 - $550 and on the very high end you have wireless terminals which cost around $675 - $725.  That is your processors cost. 

An average lease payment is around $45/month for an average terminal.  It is a 48 month lease which cannot be broken for any reason, which means you are paying that 48 months x $45 (plus tax, but to keep it simple we will leave the tax out) = $2,160.  If you can get that same terminal for say $200 you could have bought it over 10 times.  How many do you think you would go through?  Most businesses keep the same terminal for years and years.  I have seen terminals that have been used for over 10 years.  Never lease, it is a big rip-off!

So what about renting equipment then?  Renting is still not as preferable as purchasing the terminal, but with a rental there is normally no contract attached to the rental so you can return it at any time.  I still think it is a big waste of money.  If you are unsure if you will be taking cards for long and are thinking of renting consider this… If you buy a terminal for around $175 - $250, you will be able to resell that terminal to another business and recoup all or most of your money if needed.  Just make sure you clear out the memory prior to selling it.

Without a question, the best option is to purchase the equipment.  Make sure you get a good price.  Yes, you can buy equipment on the shopping sites, but you must be careful there too.  There are sites that trick you into signing up for their merchant services by getting cheap equipment.  There are also people selling equipment that is broken or that will not work with your processing company.  The best option is to buy it through your processor at a reasonable price.  Ask them if they have any kind of swap program if something happens to the terminal and how long it will take to get the replacement.

Personally, I sell equipment at my wholesale cost.  I also have a swap program so that if something happens to the terminals, other than intentional damage, I can swap the terminal out with a like model for $75.  It is a deal I worked out with my equipment supplier.  That saves my clients from having to buy a new terminal in the unlikely event something does happen to their equipment.



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