Clover Credit Card Machine Scams: Everything You Need To Know To Avoid Getting Fleeced

There is a lot of buzz surrounding First Data’s tablet-based POS products: Clover Station, Clover Mini, and Clover Flex. Now there’s even Clover Go, a mobile POS solution. Bank of America Merchant Services also heavily promotes Clover 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 places like eBay, looking for a deal. Unfortunately, it has also led predatory merchant services companies to sell business owners more than they bargained for.

According to Clover’s website, there are about 3,000 partners offering Clover, and it’s possible there are many more. Clover even admits that there are shady resellers undercutting their prices and that those systems are not legitimate. However, considering that a Clover Station goes for about $1,400 up to about $1,800 from Clover.com (which sells at MSRP), some merchants might balk at the price, look at eBay, and say, “These guys are selling it for a lower number, so why shouldn’t I go with them?” 

In this article, I’ll explain why you need to be very careful where you get your Clover machine from and how you can ensure you choose a high-quality Clover provider.

What’s All The Fuss About The Clover System?

Since the switch to chip cards rolled out in 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, 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 $1,800 per register (depending on which model you buy), 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 ($749) representing competition for the similar reader and software combo offered by Poynt—another new-wave POS hardware developer. The even smaller Clover Flex ($499) is comparable in form to the Poynt 5 smart terminal. Square offers a similarly priced EMV- and NFC-enabled POS (Square Register, $799) and smart terminal (Square Terminal, $399). Whichever one you use, the fact remains that these new-school POS products are fairly expensive, and business owners are looking for a way to get their hands on them at a discount.

But Can’t You Just Reprogram A Clover POS Machine?

Generally speaking, many merchant services providers can reprogram traditional terminals so you can reuse equipment from your previous provider. Clover doesn’t allow that—your device is locked to whatever merchant services provider you got the machine from. No reprogramming means you can’t buy a used device. This also means you can’t just buy a cheap machine on eBay or Amazon and take it to your MSP and let them reprogram it.

So why is that a problem?

The problem with an un-reprogrammable system is that you will be stuck with whichever merchant services provider you buy your Clover from. And well, not all merchant service providers are created equal. Some of them have good customer service, some have terrible customer service. Some charge lots of hidden fees, others are fair and straightforward about the fees they charge. Some require years-long service contracts, while others are month-to-month. As you might imagine, being stuck with a poor-quality merchant services provider is a nightmare for any small business.

Why You Shouldn’t Buy Your Clover Credit Card Machine From The Cheapest Source

Not only are Clover machines not reprogrammable, but not all Clover terminals you’ll find for sale online are even “official.” This means you may not get access to Clover’s technical support, warranties, Clover Security/TransArmor protection, etc.

So, just because a provider is promising insanely low rates doesn’t mean it’s going to be a good value in the long run — especially if you’re stuck with a junk system that Clover itself doesn’t even stand by! In fact, a low-priced Clover system (I’ve seen Clover Stations priced as low as $250 on eBay) with too-good-to-be-true rates (“starting at 0.1% + $0.04!”) is a red flag and almost certainly a scam. As I mentioned, many Clover resellers charge hidden fees, which means that the transaction fee that they advertise definitely does not tell the full story about how much you’ll really pay.

Want to leave your Clover service contract and buy a whole new system? Depending on the provider your Clover contract is with, you won’t even be able to do that—unless you pay hefty fees such as an early termination fee and liquidated damages. Potentially, you could be out many thousands of dollars if you pick the “cheapest” Clover system.

Merchant Services Scams On eBay

Low-priced Clover machines on Amazon or eBay are sold by very small payment providers using many of the sales tactics that we hate to see in MSPs, including misleading rates, and no other helpful information. Some might not even link to their own website or make mention of any kind of warranty.

If you buy a Clover machine somewhere like eBay or Amazon, unless you read the item description 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, neither eBay nor Amazon are the best forums 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.

How Can You Avoid A Scam & Get A Good Deal On A Clover Register?

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 or Amazon. 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.

The Best Clover Service Providers

So, if you shouldn’t buy on eBay or Amazon, where should you buy a Clover POS?

The first place we recommend shopping for a Clover system is on Clover.com, especially for low-volume businesses processing less than $10K/month (as Clover’s flat-rate pricing is a great deal for those businesses). Even though they charge more for their hardware, Clover.com offers the flexibility of month-to-month contracts, with a reasonable monthly service charge, and flat-rate credit card transaction fees. Clover clearly discloses its rates and terms online, with a few different plans to choose from, depending on your sales volume and industry.

Here are a few more things to like about purchasing a Clover POS from Clover.com directly:

• Interest-Free Installment Pricing Available: This is not a lease; you own your system outright after you pay all your installments. For example, you can purchase the Clover Station for $1,399 outright or pay three installments of $466, after which the hardware is yours.
• Easy Returns & Refunds:  You can return your Clover hardware for full refund within 60 days—You pay only for return shipping and there is no cost to exit your contract (even after the 60 days are up), which you can do at any time.
• Discounts On Additional Devices: For instance, on the “Register” plan for clover Station, you pay $39.95 per month for your first device and $9.95 per month for each additional device, per business location.
• 24/7 Support: Contact Clover’s support team to troubleshoot hardware, software, or payment issues anytime, day or night, either via phone or email.

As mentioned, there are also other reputable Clover resellers who provide good rates and terms on Clover systems—some examples include Payment Depot, National Processing, and Dharma Merchant Services. Some of these resellers provide interchange-plus pricing, which might make more sense than flat-rate for higher-volume businesses. To get a better idea of which specific merchant services companies to buy your Clover from (and which companies to avoid), read The Best (And Worst) Companies To Get a Clover Credit Card Machine From.

If you’re worried about costs, it’s important to note that POS equipment is a business tax writeoff; small business loans can also be an option for purchasing POS equipment. Whatever you do, just don’t lease or rent a POS terminal, as you’ll end up overpaying and stuck in an ironclad contract with a system you’ll never even own outright.

Not So Sure A Clover System Is Right For You? Try These Options

Clover is powerful and flexible, and the all-in-one hardware designs are a major part of the appeal. But other providers can offer a similar experience, perhaps without as much headache and maybe for less cost. If you’re open to POS options other than Clover, read The Best Clover Alternatives & Competitors For Any & Every Type Of Small Business.

Also, read about a few specific providers below that are popular alternatives to Clover.

Square

Free merchant account alternative

Square is another easy-to-use small business POS, but it’s more flexible than Clover in that it doesn’t require a merchant account and you can use it with any device. Square offers flat-rate pricing with no monthly fee. Like Clover, Square is also suitable for virtually any type of business but works best for low-volume businesses. If you prefer an all-in-one hardware setup like Clover offers, Square has the Square Register, which is comparable to the Clover Mini, and Square Terminal, which is most similar to the Clover Flex. Or, you can use the proprietary Square Stand (pictured above) with an iPad setup. If you’re considering Clover, I would definitely do some comparison shopping with Square to see how they stack up in terms of their hardware, features, and pricing.

ShopKeep

Alternative POS software using Clover hardware

ShopKeep is an interesting option because it is the only other POS software that runs on Clover hardware. If you like the Clover hardware but operate a quick-service or specialty retail setup, you might prefer to use ShopKeep over Clover’s software, as ShopKeep offers some useful features for these industries, with colorful buttons and an intuitive UI. However, you also have the option to use ShopKeep with an iPad or Android register setup. ShopKeep also offers affordable monthly pricing and in-house payment processing with interchange-plus rates. As for the quality of ShopKeep itself, they are reliable and known for their strong customer service. If you’re interested in alternative POS software that runs on Clover hardware, I recommend downloading a free ShopKeep account to test out on your iPad or Android.

SwipeSimple By Payment Depot

Budget-friendly POS with high-quality merchant services

As mentioned, Payment Depot is a quality merchant services provider from which you can buy Clover. However, Payment Depot also offers a less-expensive system called SwipeSimple that runs on Apple and Android devices with either a free Bluetooth reader or an all-in-one PAX terminal (pictured above), which is similar to the Clover Flex. Low-volume merchants can get their own merchant account with flat-rate pricing for just $10/month; higher-volume merchants can qualify for interchange-plus pricing. Payment Depot is a more basic system than Clover, but if you just need quality payment processing services and don’t need advanced features or snazzy register hardware, SwipeSimple By Payment Depot could be perfect for you.

The Bottom Line When Shopping For A Clover Credit Card Machine

Clover can be a good fit for a variety of small businesses in the retail and restaurant industries. It’s a good general all-in-one system and is super easy-to-use for POS newcomers. However, it can be expensive, and its feature set isn’t that advanced out-of-the-box. You also can’t reuse the hardware with another system of your choosing if Clover doesn’t work out for you. If you are on a budget, have industry-specific needs, and/or want a more flexible system, I’d recommend taking a look at some Clover alternatives and seeing how they compare.

The key takeaways for navigating the sea of Clover resellers are as follows:

• Don’t buy on eBay or Amazon, opting instead to purchase from Clover directly or from a well-vetted merchant services provider.
• When buying a Clover system, don’t settle for less than a month-to-month contract, flat-rate or interchange pricing with no hidden fees, and the option to purchase your Clover system outright instead of leasing or renting. 

The Best Clover Service Providers

Here is some further reading you should do as you continue to shop for a POS system:

• How Much Does Clover POS Cost? Everything You Need To Know About Clover Pricing
• Square VS Clover
• The Smart Merchant’s Guide To Credit Card Machines & Terminals: What Do Small Businesses Really Need?
• Why Flat-Rate Credit Card Processing Works Great For Some Businesses (And Not Others)