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Mike Anderson

mike anderson autobody newsMike Anderson is the president and owner of Collision Advice, a consulting company for the auto body/collision repair industry. For nearly 25 years, he was the owner of Wagonwork Collision Center, an OEM-certified, full-service auto body repair facility in Alexandria, VA.

 
Friday, 01 October 2021 20:59

From the Desk of Mike Anderson: Auto Body Shops Can Take Control of Credit Card Processing Fees

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...61%. Limits of either $1,000 or $2,500 were the most common.

 

But you might also consider under what circumstances you accept payment by credit card. Some insurance companies have pressed their direct repair shops to accept payment from the insurer by credit card. Shops that recognized what that 2% or 4% off the bottom line could mean for their business often found they were successful in requesting other forms of payment from the insurer.

 

Some of those shops also said the insurance company allowed them to add the credit card fees to the amount they were being paid. I’ll discuss this later in this column, but I want to note here that is not something we confirmed ourselves, and neither Mark nor I are offering any legal advice here.

 

But here’s another scenario Mark and I have been hearing about: tow companies who want to pay the bill at the shop by credit card when picking up a total loss vehicle. I just have to scratch my head thinking about any shop agreeing to that, particularly when our “Who Pays for What?” surveys consistently show more than half of shops are not marking up tow bills---that’s a topic for another column.

 

When that tow truck driver pays that bill with a credit card and you’re not marking up the sublet tow charge, you’re not only not making any money on that tow, you’re actually losing money---the 2% or 3% or 4% you’re paying in credit card processing for that transaction. That just makes no sense.

 

So those are some ways---aside from shopping for lower processing fees---to limit or reduce how much accepting some payments by credit card is costing your business.

But Mark also did some more digging into some other cost-saving possibilities for shops.

 

“We found some processors allow a shop to offer what’s called a cash-discount program,” Mark said. “It implements a service fee on all customers, while giving a discount to the customer who pays in cash or check.”

 

There’s an important caveat, Mark said...


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