Debit/Credit Cards and the Popcorn Sale

This is an updated version for 2018smart_phone_credit_card_reader_14480

One question that I am asked is if our Unit should accept credit/debit cards. The answer is an emphatic YES! For the sake of simplicity, I will refer to them strictly as credit cards. There are four main reasons a Unit should take credit cards.

  1. Ease of use – More people use credit/debit cards than use cash/checks for transactions.  This avoids the response of “Sorry, I have no cash on me.”  Now you can reply, “WE TAKE CREDIT CARDS”
  2. Safety – Using credit cards reduces the amount of cash on hand and the opportunity of theft, both externally and internally.  Every year somewhere in the country there is an incident of a Boy Scout or Girl Scout Unit having their cash box stolen in front of a grocery story.  Taking credit cards helps mitigate this risk.
  3. Sales increase – In units I have observed accepting credit card payments, there is at least a 15% increase in overall sales.  Typically credit card sales especially at a storefront are sales you would have not otherwise made.
  4. People spend more with a credit card – people are limited by the amount of cash they have on hand.  However, this is not the case with a credit card.  When my son sees the credit card come out, he immediately goes for the up-sale or asks if they want to buy another item for a family or friend.

Over the last several years, I have seen the percent of payment made by credit card increase from under 10% to nearly 60% of a Units total storefronts sales.  People are used to paying by credit card and they are getting more used to mobile versions of credit card payment.

The real question is which system you should use. Smartphones have created a new industry called mobile Point-Of-Sale or mPOS for short. These devices have reduced the cost of credit card transactions, allow several different options for taking a credit card payment, and have become more acceptable the last several years.

There are a few items I look for when choosing a mPOS service. First, I want a low processing rate. In addition, I want to be able to predict my processing fees. In most instances the credit card processing fee comes out of the profit made by the Unit.  Because I do not use this device year-round, I do not want to pay a monthly fee. I also want an mPOS device that is easy enough a Cub Scout could use and it can be used by multiple people. In addition, I do not want to pay for any hardware or terminal.  With new credit card processing laws regarding the use of EMV chips, if available, the system I choose should have the ability to take chip processing as well as Apple Pay.  Finally, with new iPhones not having a microphone jack, I need a system which can be used with and without the use of the jack.

With these criteria in mind, this is a review of the four most popular credit card readers for smartphones.

There are a few common traits between all of these services. They all have a free app that is downloaded to your iPhone or Android phone and all of them have some form of iPad or tablet use. However, some have more integration than others. These mPOS services also offer a free device once your service is approved. In most of these systems, a person can sign up as an individual or a merchant. Even if you sign up for an individual account, all systems will do a “soft hit” to your credit report. It is more to verify you are who you say you are and does not affect your credit score. To sign up as a merchant, the Unit must have a Tax ID number which can be obtained through your Charter Organization or in some cases through your local Council. There can be an advantage of registering as a merchant depending on the service used which we will discuss later. Fees below are for standard swiping of a card. Keying in a credit card number will increase this fee. Finally, all readers below are PCI compliant for security.

Below is a summary of the difference in mPOS readers.

I have used all of these readers and here are some insights.

EMV Terminal/Tap Reader Cost Rate Phone Support Access to funds
Square $49.95 2.75% X 24 hours
PayAnywhere $29.95/$49.95 2.69% X 30 min.
PayPal Here $24.99/$54.99 2.70% X 30 min.
Intuit GoPayment $19/$49 2.40 + .25 per swipe 24 hours
Clover $39.95 2.75% X 24 hours

The new readers for mobile phones are very reliable.


First, iPad integration is easy and free with Square Register for iPad. You can enter in a picture and price of the product. Then all a customer or Scout has to do is touch on the product and the amount comes up. It is easy enough for a Cub Scout to do. The second advantage is you can have an individual log in and password for each reader issued. It allows you to track which Scout sold what item based on the log in. You can also restrict access to the balance in the account and the ability to do returns. All funds go into one account. They have videos that show how to do most items on your phone.

Square offers an EMV Chip reader for $49.  In addition, the Square Stand transforms your iPad (Generation 3 or higher) into a complete POS terminal.  The slot is much larger looks more like a regular terminal.  After the product is selected the customer can swipe their card and sign the screen. Because the customer swipes the card, it is preferred over the mobile phone swipe. The device is $169 which includes the EMV Chip and Tap reader.  In addition, they will break up the payment for the device into three installments.  Recently they added phone support but it is difficult to find the number if you do not already have an account.  The number is 855-700-6000.


It can take up to 24 hours for the funds to post to your checking account especially on a Sunday. This can take a couple of days for the first deposit to go through.  The final disadvantage is the reader. While the processing is good, the other readers have a tab so that the reader does not swivel. Square can tend to swivel.

PayAnywhere has quickly become attractive for Units.  The new devices are much larger and do not swivel on a mobile phone.


PayAnywhere has the lowest rates. However, remember the difference of the cost on a $10 item is 1 cent, so do not have that be the deciding factor. The same device can be easily used on a mobile phone and tablet.  This device can be use on Apple and Android tablets.  PayAnywhere has both phone and live chat support. Reports are easy to read especially on the mobile device. They have videos that show how to do most items on your phone.


PayAnywhere has by far the most complicated processing fee structure with their standard plan.  While their website states as a low as 1.69% processing fees, theses fees vary by what type of card is used (Visa, MasterCard, etc.) and what type of method is used (EMV Chip, Swipe, ApplePay, etc).  There pay as you go is better at 2.69%.  Finally, if you are set up as an individual account instead of a merchant account, one can only take charges of up to $500 in one day. If you do not use the device in a 12 month period there is a $3.99 monthly inactivity fee. Finally the cost of the devices is not on their main web page.


PayPal has some brand recognition and is an extension of a Unit PayPal account.


The biggest advantage is that PayPal Here is an extension of your PayPal account. Because of this, Units can also take check images as well as credit cards. In addition, the Unit can get a Debit Card for the PayPal account to use the funds immediately. They also have phone support and have quick access to funds.  In addition, PayPal Here has one of the smallest EMV chip reader devices available.  I also like the separate Bluetooth indicator light on this device to know you are connected and it has a power button to conserve the battery.


The biggest disadvantage is that PayPal Here is an extension of your PayPal account. It takes extra effort to have the funds transferred to a Unit checking account. There is an additional fee to set up items for display on an iPad. Similar to PayAnywhere, a Unit can set up multiple readers with the same account but you cannot sort who sold what unless something is typed into the description. In addition, everyone has full access to the account.  The cost is the most expense of these options and charging station is an additional $20.  Finally, I find the device to twist when not swiped correctly with the mobile card reader.  A bit more difficult for a Scout to use.

Intuit GoPayment –

Intuit is the system used by the Girl Scouts


This is the best option if your unit uses Quickbooks, but most do not.  The next advantage is they offer two different options for the device.  The EMV Chip and Magnetic Swipe device is $19 and the one which takes those and Apply Pay/Android Pay is $49.  They may be a bit more cost effective if running multiple locations.  In addition, the web site states the device will stay charged for up to one week.  I have only used it over the weekend and put it pack on the charger on Monday


The biggest disadvantage is Units must set up a Merchant Account. You may be able to maneuver around this if your Council is willing to set this up for you like the Girl Scouts do. They also have no phone support. Finally, payment can take as long as 24 hours to deposit.  In addition, I do not like systems which charge a per transaction fee.  It is hard to budget the cost of the processing fees.

Apple now has partnered to offer their own all in one credit card processing device called Clover.  It uses Bluetooth to pair to your iPhone and allows Swipe, EMV Chip, and Apple Pay through a phone or Apple Watch.


Clover is the same rate as Square and the one device which allows all of the payment functions is nice.  They also have a website which can be used for tracking online inventory or online sales.  In addition, they have 24 hours customer support.


The main disadvantage is they only offer the one all-in-one processing device which runs $39.95.  This is an upfront investment for a unit and may be too costly if running multiple show and sell locations.  In addition, the device needs to be charged between uses.


A Surcharge is when you pass on the processing fee to the customer. There are currently 11 states and territories with laws that prohibit surcharges of any type. The following states do not allow a surcharge by law: California, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts, New York, Oklahoma, Texas and Puerto Rico. As of this blog post proposals to outlaw the fees are pending in Arkansas, Hawaii, Illinois, Indiana, Kentucky, Maryland, Michigan, Missouri, Nevada, New Jersey, New Mexico, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont and West Virginia.  You should continue to monitor this issue if you plan to charge a surcharge.

If you decide to apply a surcharge it is your responsibility to meet all legal and card network requirements which include the following:

  • Surcharges may only be applied to credit card transactions, not debit cards or pre-paid cards.
  • You can only charge your customer as much as you are charged for processing the credit card transaction.
  • The surcharge has to be disclosed to the customer before the transaction via prominent signage.
  • The surcharge must be listed separately on the transaction receipt. An option is to use the tax feature on most apps for the fee.
  • The surcharge must be applied universally to credit cards from all payment Networks (Visa, MasterCard, American Express, and Discover).

If you intend to enact a surcharge policy, you must first provide notice directly to both Visa and MasterCard.


4 thoughts on “Debit/Credit Cards and the Popcorn Sale

  1. Hello,

    I have a question of two if you have the time….

    – Does the EIN or Federal Tax ID used to open the Square account belong to your Charter Organization?
    – Is your Charter Organization a Church or another type of 501(c)(3)?
    – Who receives the year-end 1099 tax document?
    – Does the Charter Organization’s accountant need to be involved at tax time?

    The pushback I’m getting from my committee is that the Church will appear to have made “income” as a result of Troop Sales (dues, summer camp, popcorn, etc). Does this income become an issue for the Church?

    – Can the Troop Treasurer use their personal home mailing address to open the Square account, even though they’d be using the Church’s EIN or Federal Tax ID?

    Thank you very much for your time!


    Charles Sciandra
    BSA Troop 172, New Paltz, NY
    Treasurer – Eagle Coach – Webmaster

    1. These are great questions. Let’s take them one at a time.

      1. Yes, the EIN or Tax ID Number should come from your Chartered Organization. This is similar to needing this information when opening a bank account.
      2. Yes, my son’s Troop is chartered by a church.
      3. I need a bit more information regarding the 1099 Form. Do you receive a 1099 from the council? Square does not give a 1099. They only provide a report with the charges and the resulting processing fees.
      4. This is a loaded question. All Units should meet with their Chartered Organization at least on an annual basis. We have a good relationship with our Chartered Organization and give them financial statements once a year. This also give us the opportunity to review the responsibilities of the Unit and Chartered Organization and any needs the Unit may have in the future (additional tents, trailer, Pinewood Derby track, storage, setting up a uniform bank, etc.)
      5. Unit Popcorn Sales are income to the Chartered Organization. Tithing, thrift shops, and pancake breakfasts are also income to a church. However, all income is used for its membership and fall under the 501(c)(3) status. There are no federal taxes on this income. You will have to look up state taxes in your state.
      6. Using a personal mailing address to open the Square account is allowed, even when using the church EIN or Tax ID. The same rule applies regarding bank statements mailed to a personal address. This is an issue to discuss with your Chartered Organization. However, most do not have an issue with this.

      I appreciate you trying to do the right thing regarding the finances in your Troop. In most instances, popcorn sales have no impact on the 501(c)(3) organization. However, it is best to discuss this with the Chartered Organization and their tax accountant.

      1. Thank you for your thoughtful and detailed answers. Since originally asking you my questions I’ve learned that all credit card processors including PayPal, Square, etc. are required by law to send the IRS and the merchant (in this case the Charter Organization/EIN provider) a year end 1099-K…only if the following thresholds are met or exceeded: $20K in annual credit card charges processed -AND- 200 transactions.

        So in our troop I suppose if annual dues, summer camp, all popcorn and candy sales and a trip or two were paid via credit card we would hit the threshold. An unlikely scenario considering at our last meeting I was handed a bag of quarters from candy bar sales! 😀 Thanks again for your informative article.

      2. You are correct. Credit Card Processing companies with send out a 1099-K to the organization if the thresholds you mentioned are met (The aggregate value exceeds $20,000 in a calendar year AND the number of transactions exceeds 200).

        Understand, Form 1099-K is an information return. This means it is used to help an organization file their taxes. My understanding is the IRS uses the information from 1099-K to compare the total credit card payment dollars received and the total gross sales for your organization. Of course your total gross sales should be equal to or higher than your total credit card payments received.

        An organization does not file a 1099-K with their taxes. It is used for information only.

        Again, this is another reason the Chartered Organization’s Tax ID should be used used when applying with a credit card processing company.

        I actually hope you receive a 1099-K. This means you had an outstanding popcorn sale. Good luck.

        For more information on 1099-K for 2014, go here.

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