Beware of Clover Station POS Scams
There’s been a lot of buzz surrounding First Data’s new tablet-based POS products: Clover Station, Clover Mini, and Clover Mobile. Bank of America Merchant Services is also heavily promoting these products. But unlike iPad POS systems, you can’t just download the app and test out the POS. You have to buy the complete hardware package to see Clover in action. This has led many merchants to eBay, looking for a deal. Unfortunately, it has also led predatory merchant services companies to sell business owners more than they bargained for.
What’s the Deal With Clover POS?
Since the switch to chip cards officially arrived in October 2015, many merchant services companies have developed new hardware solutions with integrated EMV-compliant chip card readers, as well as NFC readers for acceptance of contactless payments via digital wallets like Apple Pay and Android Pay. We recently reviewed some of the new EMV and NFC card readers on the market, which you can read about and compare here.
So it’s no surprise that First Data, one of the biggest processors in the US, has put together an attractive, EMV-compliant hardware and software bundle. Unlike standard tablet or smartphone POS software, which uses interchangeable hardware, to use Clover you must buy one of First Data’s proprietary tablet, stand, and card reader bundles. This requires an initial hardware investment of about $500 to $1,000 per station, and that hardware is useless to you if you decide to switch systems.
Still, it’s an alluring and sleek suite of products, with the Clover Mini representing competition for the similar reader and software combo offered by Poynt – another new-wave POS hardware developer. But the fact remains, it’s fairly expensive and business owners are looking for a way to get their hands on it at a discount.
Merchant Services Scams on eBay
Where do you go to buy things at a discount? eBay, of course. While researching the Clover Station POS system, I poked around eBay to see if any systems were for sale. Initially, I was impressed to see so many packages at reasonable prices. And, indeed, some of them were legitimate lightly used or new systems up for sale. Many of the listings, however, were actually for merchant account contracts, not just the hardware.
Unless you read the descriptions carefully, you might not even notice that you must sign a processing agreement in order to receive the machine. Signing on with a merchant services provider is not something to be taken lightly. These contracts can end up costing you thousands of dollars in overpayments and termination fees, as well as countless hours of headaches. Certainly, eBay is not the best forum for evaluating these services and contract terms.
What’s happening here is that resellers of First Data’s payment processing services (like Ignite Payments, a subsidiary brand of First Data Merchant Services with many independent offices and agents) are selling merchant accounts under the guise of Clover Station POS hardware. They get you to agree to the purchase of the machine, and then pressure you into signing the contract in order to receive the machine.
This practice is deceptive and unethical. Yes, in the listing they do explain that the processing contract is needed before you receive the machine, but the fact remains that the practice is predatory and not in the best interest of the merchant, who had ought to sign up for payment processing services based on the merits of the provider, not an eBay item description.
The Best Place to Buy a Clover POS System
The best way to purchase Clover POS is to sign up for a merchant account with a reputable reseller that you research in-depth. Don’t just sign up with a company because they have the lowest equipment price on eBay. Those credit card processors are just trying to trick you into signing up for a merchant account without having carefully considered your contract terms, processing fees, customer support, and other important factors.
One of our favorite providers that can set up First Data accounts with Clover POS systems is Payment Depot (see our review). This company provides transparent and fair pricing, alongside exceptional customer support, and is among our favorite providers for any system.
When you purchase a Clover Station on eBay, you are likely purchasing more than just the hardware: You are signing up for a long-term processing contract with a company you know nothing about, that is almost definitely going to include a hefty early termination fee. In my opinion, it’s a scam and a ripoff. Don’t do it.
It might be worth considering your other POS options before deciding to go forward with Clover. Check out our POS software comparison chart and our guided matching system to find other good options for your business to compare against Clover.