Wednesday, 26 January 2011 19:17

Credit Card Processing Fees—Dings, Dents, and Crashes at Your Bottom Line

Written by Walter Danalevich

As we all roll into the New Year with new personal, business, and profit projection goals, many of us are asking ourselves what business operating expenses we are able to reduce which would result in added profits to our bottom line? This is especially true during these tough economic times.

Personally, I make it a practice at the conclusion of each calendar year to review our body shop’s financial reports by searching out unnecessary expenses. My objective is to reduce all wasteful expenses which have occurred during the day-to-day rush of conducting business.

One category of expense which recently struck me as needing some attention is the credit card processing hosting fee. Yes, that little box from which you hear the sweet sound of ‘Cha Ching’ each time a customer pays their deductible and/or decides to deposit the Insurance check in their personal bank account (with intentions to accumulate additional “Reward Points.”)

Take a minute to do some simple math. How many credit card transactions does your business process on average per month? Now look at your monthly Credit Card Host processing fees which were deducted from your bank account, multiply by twelve months and ... holy $! ... thousands, right? How many of you are saying OMG? Did your bottom line get Dinged and Dented or was it more like Crashed and Burned?

Here are a few credit card processing tips to improve your Business’s monthly bottom line.

Most of us have received at one time or another cold call telemarketing inquiries. Hearing well-rehearsed sales hooks by credit card telemarketers who make promises stating only their company can provide you with the lowest processing rate on Earth.

Unfortunately, most business owners and managers are taken advantage of by fast talking sales representatives. There is so much more to take into account for business owners then what is initially portrayed by the sales rep. Many business managers are lulled into security by hearing a well recited sales pitch for the lowest Merchant processing fees.

The problem which often occurs is the business manger does not read further into the contents of the “TERMS AND CONDITIONS” agreement from the credit card hosting company, which usually is written in a size 7 or smaller print.

Instead the manager is lead to believe he or she is receiving the “lowest credit card processing rate available. Here is a condensed list of a few “STANDARD FEES” applied by most credit card hosts. I highly recommend that, if you are interested in retaining more income from each credit card transaction, you be sure to take the time to understand the “Terms and Conditions” of the Credit Card host agreement before you proceed with your signature of acceptance.

● QUALIFIED Transaction Rate: Remember that lowest price rate you were promised by that sweet talking sales rep? Well if the customer’s credit card happens to be a “REWARDS” card you need to know your bank account will be “dented” on the average of at least one percentage point higher than the lowest rate you were lead to believe you were receiving. CHA CHING!!!

● Equipment fee: Normally Credit Card Host requires leasing, purchasing or supplying the credit card terminal. You may save at least $600.00 for a credit card terminal by shopping for the best deal. Be sure to check the equipment return terms if leasing the equipment to avoid your sales income from being severely dented!

● Fees: Set-up fees, Training Fees, Transaction fees, Multi location fee, Chargeback fee, Retrieval fee, Pin pad debit fee, Equipment fee, Nonqualified transaction fee, Processing fee, Per item fee, Return draft fee, Voice Authorization fee, Account management fee, Monthly minimum charge fee and of course when you get sick of paying all those fees and decide to change to another credit card host there is a CANCELLATION FEE!

● Term & Termination: Often overlooked by most business managers is the automatic term renewal. The Credit Card host has no obligation to contact you or offer advanced notice about service terms and termination procedures.

This article does not begin to cover every aspect of credit card processing fees. Rather it is written to open your eyes to the potential “unnecessary fee expenses” to your business which can lead to hundreds and in some cases thousands of dollars in bank processing fees “taken” from your annual income. In business there will always be some merchant processing fee to pay. However, let us all make an effort to close up the leaks applied to the profit goals we work so hard at to achieve!

Walter Danalevich’s shop, Santa Barbara Auto Refinishing, is at 402 Nopal St. Santa Barbara, CA 93103

Visit his website HERE

Read 4412 times Last modified on Wednesday, 14 December 2016 00:26