It may be that time of year that you are thinking you would like to trim costs in your business. Your Merchant Service account is an excellent place to start. Many businesses are overpaying thousands of dollars yearly for their merchant service account. Here are a few tips to get you started
1 – Understand Cost (Interchange) – First it is important to understand that there is a cost to accepting credit cards. The major card networks charge fees and those fees are charged to merchants. Understanding the cost of the credit cards that you are accepting is a great way to find out how you can negotiate a better deal. For example, if a customer buys a dress from you for $100 with a visa rewards card that they get 1.5% cash back you can be sure that the cost(interchange) is going to cost you at least a $1.65. That is not negotiable. That is what we call cost or interchange. Having a good understanding of that is a good start. This is a good article to help you understand cost or interchange. If you are not on an interchange plus pricing structure you should ask to be put on one. This will help you determine your cost.
2 – Schedule a time to call your merchant service provider. – Set aside anywhere from 30 minutes to an hour to call in to your merchant service provider. I know that business owners have limited amounts of time and that may seem impossible, but saving money is where you make money. When you call make sure that you ask the right questions. Have a monthly statement in front of you and go through it with a service representative. Make sure to ask the right questions. For example:
Can you tell me what my interchange cost is on this statement?
What are my transaction fees per swipe?
Some processors show you clearly what cost is while others hide cost. Ask if they can put you on Cost plus pricing. This is a more transparent way to see how much you are paying. If you feel like you are not getting anywhere don’t be afraid to hang up and reschedule a time to call in a few weeks.
3 – Don’t be afraid to delegate – Nobody cares more about your bottom line than you as a business owner. However, if you have a loyal employee that you trust it might not be a bad idea to delegate your merchant service account to an employee. Some of the best negotiators I have dealt with have not been business owners but office managers. Make sure you don’t sign a lease on a credit card machine and that you still look up the merchant service provider reviews. However, this may eliminate an extra area of stress for you as well as empower your employee. Make sure you can get a no early termination fee addendum. Coach them through the process, but allow your employee to deal with the headache.
These are a few tips when negotiating when you open a merchant service account or for your already existing merchant service account.