April 1st, 2014 by Jamie Estep
Problems with used credit card terminals on eBay and craigslist
Many business owners sell their used credit card terminals on ebay to other business owners after they upgrade or no longer need them. These terminals often go for a fraction of the retail price even if they are relatively new.
Buying a used terminal has always been a bit of a gamble since it’s unclear how the terminal was treated and how much life it possibly has in it. Even so many times the price is good enough to take a chance with it.
However, we are increasingly seeing problems with used terminals on ebay and craigslist that prevent them from being used at all by the purchaser. Many, if not most, merchant account providers have free terminal programs for their retail merchants. What merchants may not know is that they do not actually own the terminal that they’re given to use and they’re supposed to return the terminal to their provider if they switch processors or cancel their account.
What’s happening is that many of these terminals are not being returned and instead being sold on ebay or craigslist or other marketplaces. These terminals are usually locked at a hardware level so that they cannot be used with another provider, and the processor will not unlock a terminal that they were supposed to get back as they technically still own it. This is to protect the processor from losing a $200 – $500 terminal every time they lend one out. But, as a purchaser there is virtually no way of knowing if a terminal is locked until your own provider tries to program it. By that time you may not be able to get a refund or even find the seller if it is on craigslist. As far as ebay goes, if they seller states it’s a working terminal, it doesn’t actually have to be usable with your processor, and it is very difficult to win a dispute through paypal’s dispute resolution system in this case.
Unless you are 100% certain that a particular terminal is not locked with any provider, we strongly recommend only buying equipment that is new or manufacturer refurbished and is not proprietary to any particular company. This will save money and a huge amount of wasted time if you accidentally purchase a locked terminal.