Gift Cards: The Gift That Keeps on Giving

Gift Cards have been growing tremendously in the last 3-4 years and shouldn't slow down anytime soon, mostly because credit card use is not slowing down. They are quick, easy, portable, and obviously transferable.

Gift Cards can also have any look your team can create. Since they are highly customizable, they are simply used as another advertising medium and help lend credibility to your business. This is because we all assume when looking at nice and shiny, new gift cards that they is some incredible infrastructure behind it. There is of course, but the main thing is how easy they are to get and use, and how that infrastructure gives smaller businesses more weight.

Better yet is the increased sale. Besides the bird-in-the-hand principle, we generally miss something. If a wife buys her husband a gift card at a store, the store has created two customers being her husband, and now her. As well, if she gives him a $50 gift card, he will normally spend that plus an extra 10-50% more. Why? Because he doesn't want to waste any of his gift. If he only buys $48.95 worth of goods, there is money left on the card. He must throw in some extra to get the full value of the gift. What does he care? He just got a $75 item for $25 in cash.

I have dealt with several large firms in this field, but I always compare with a smaller group who can be more mobile and really want my business. There are companies out there like GiveX, Valutec, and a host of processors that already have their own deals. If you have a merchant account, ask your rep about gift cards. Then double check what they can do for you. A smaller firm that I often recommend is World Gift Card. I have personally held in my hand several of their card samples and have always been amazed at what they can put out in terms of some really fine cards.

Why Won't My Checks Scan?

Businesses are more and more realizing that checks did not completely die out. In fact, some businesses are still getting as much as 60% of their income from checks. While those may be rare, there is still a place in this old world for the custom bank note. I spend a certain amount of time on this in What About Checks? and Safer Checks, Really? However, for those of you scanning checks now, here are some answers to the questions that I have been getting. Please remember, that this is not an exhaustive list, but merely a basic set of facts to start from.

Custom Checks
One of the new reasons checks won't scan or get declined popping up these days is the use of custom checks. Everybody gets these ads for vanity checks and I have no issue with wanting Scooby Doo or Justice League/ Super Friends style checks. The problem arises in the fact that these tend to be of lesser quality than those you get from your bank. That is because your bank wants to double-down make sure your checks go through so they purchase from very high quality check makers like Harland. You see a check has a magnetic ink number on the bottom. Check readers known as MICR (mag ink character recognition, pronounced: "micker") readers basically work like a VCR reading the mag ink numbers. If those are not done well, the check will either not scan or simply get declined.

Number Scratch
Sometimes these mag ink numbers get drawn or scribbled through when one signs their name. Depending on how hard your customer writes their name, the quality of the check (such as a vanity check), or whether a ball point pen's pressure scratches off part of the ink can affect the check's viability. Suggest the customer signs a check not touching the number with their signature.

Checking History
Your customer's check writing history will affect whether or not a check goes through. Now this speaks more to Check Guarantee and does not affect Remote Deposit at all. Remember Remote Deposit is the same as going to the bank without physically going there at all. However, Guarantee is asking for the ISO or Processor to front you the money and collect the payment from the check writer. That means risk. The customer might only be writing a $10 check against a bank account with $10,000 in it, but if they have a history of bouncing checks, it will most likely be declined. If that sounds like a credit history, it is. It's simply using paper instead of plastic and you are not even at the grocery store.

Not Enough Money
OK, I had to say it. The main reason we all know a check won't scan or get an approval is how much they have in the bank. This is a direct check and they will look.

These are still just the basic things support systems look for when a business is having trouble scanning checks. There are always more. If you think your business has seen a unique situation, I'd love to hear it. Post your query and maybe we'll send you a free ad that we get every week in a Value Pack for some checks with your favorite cartoon on it.

Sky Miles Cost Your Business... Not Delta

It's amazing what this industry does and who really pays the bill. If you are a business owner that has a merchant account, then it's you. Sorry to break the bad news. But let me give you an example.

Rewards Cards.

Let's say a customer with a Delta Sky Miles card comes in to your shop. Yay, money! Actually, it's less money than you think. You see Mr. Customer comes in and uses his Sky Miles card and makes some purchases. Well, because he used that card, he just got a bonus. Well bonuses ain't free my friend. So who paid the bill? Well duh, it MUST have been Delta. After all, it was a Delta Sky Miles card, right?

Wrong, wrong, wrong.

Your business paid it. The customer got the sky miles, Delta got the glory, and you got a sale, minus your credit card percentage AND minus the rewards card percentage that was used to pay the customer (which was at the time of this writing which was 0.3%). That's not so bad... is it?

Of course it's bad. It's more and it's way, way more. If you were a retail shop and you had a good rate of let's say 1.76% then you just paid 2.06% so Delta, or whomever, could reward their card holders with your profits. That's what it really comes down to is profit sharing, they just do it with other people's money. After all Tom Sawyer only got everyone to do his chores by convincing them it was fun. If he saw this ring, he would be so proud.

Here's the worst of it: There is nothing that you can do. This article is merely an eye-opener. You must be aware of the problem. However, one's business cannot refuse a credit card or they can possibly get delisted. After all, why do you think Discover cost what it did? They would give rewards to their customers by charging the businesses a premium. Unfortunately it's our society driving the sales which hurt the companies. They want rewards, so you foot the bill.

Percentages can Grow Overnight... not just Beanstalks

"But I'm in a contract..." is a phrase that never gets un-funny to me. The number of times I have consulted people and groups that said they were fine as they were "in a contract" is difficult to be counted. The number of those groups that were paying too much is easy. It's over 99%. Seriously, with the cell phone companies out there now, does anyone really think a contract protects them?

Sadly, many do and the industry is glad of it. In truth, the rate goes up constantly, but here is the good news: You can have your account reviewed once a year. That's right. Once per fiscal year, you may request that your account and its rate be reviewed even if you're in a contract (By the way, everyone is in a contract that has a merchant account).

Here's the bad news: So what? All they have to do is say that the Fed Rate and MC-Visa went up and that you just hit a brick wall. This is why you need an advocate on your side. A group that cares more about your account, than they do the processors. This is because of two things. 1)They should be the ones automatically asking for a rate review, and 2)They can say to the processor, "They have been quoted a better rate and are going to leave unless you drop the rate back down."

It's really that simple.

I have seen rates in a single year go from the 1.7%'s which is good for a Retail account to 1.83 % and even 2.3%. One customer in a two year period went as high as 3.1%. Now for those of you who do not know this, the riskier the business, the higher the percentage. 3.1% is getting into the realm of adult media. The only reason I would pay anyone 3.1% is to keep my mother out of the hospital.

There was a book out called A Father's Wisdom . It was full of many pithy one-liners that held great value, but one of my favorites was this: 'Have two keys made to your house and give them to your two best friends. If this makes you uneasy, get new friends.' The same applies here. Your account representative is your advocate, not the processors. If they are not able to argue your account down to a reasonable rate at the end of the year, and every year, then get a new one.

Offshore Merchant Accounts

A question I am often asked is about offshore processing. This has come up enough so that I have to say here, "Pay close attention".

Offshore processing is by definition risky and is only used in environments where traditional US Domestic services will not handle it. The main thing you should ask yourself now is "Why would a traditional US Domestic service not handle this type of transaction?" If you did, you've earned a cookie. Answer: too risky and the processor generally can't get underwriting for it. Underwriting is basically insurance, and as you should know insurance companies rule the world.

Offshore is generally for things such as adult material, time shares, gambling and other things you wouldn't go to with your four-year-old daughter. However, if there is a demand (and there is), then there will always be supply. Enter: Offshore processing. Offshore means any processing bank that is not on US land and is therefore not restricted by US banking regulations. Trust me on this one. The US knows what to do and what not to do (making us the supreme financial super power on the globe) and this is why people leave and go off shore to avoid restrictions like Jonah fleeing God. Remember what happened that time?

I have had a chance to consult for several non-adult themed accounts that were high risk such as time shares and I had to tell them that if they wanted a merchant account to accept credit cards they were going to be forced off shore. There are not a lot of groups that have both.

Now, what to expect. Generally one is going to pay a higher Discount Rate which is a percentage. This is due to the risk nature of the business. For example: a business that has a charge-back rate of 1% in the US will get delisted. A charge-back is not a refund. It is when your customer calls their bank and says that they never purchased the item or service that your company sells that is on their credit card statement. 1% may seem small, but think about your business. Should you ever really get a charge-back? Only in rare cases.

The adult industry; however, can get a charge-back rate of 50%. Half of all purchases are claimed as never made! Imagine this scenario. A wife looking at a credit card statement asks her husband who made a $39.99 purchase from "Ladies Who do Something I won't write here.com"? Her husband creates the best clueless face he can, says it must be a mistake, and while she sits there, calls the bank who issued his card and says that he never made such a purchase.

Just to be fair, there are many times when the man is actually innocent. Companies do make mistakes.

Anyway, these high risks put a premium on the service. Not to mention, as they are off shore and not restricted as American banks are, there are less securities for your money earned. This is where a good relationship comes in. Call. Contact them and see. Talk to an agent and ask what type of assurances do they have from their Offshore Groups. Do they require money down as a security measure? How much higher are the rates than a normal transaction? How long have they worked with that particular offshore processor? What is the normal gripe (there is always a gripe whether offshore or Domestic) about that particular group?

Finally, put in an application and get some more data. Most groups are simply looking for better rates and you want to do plenty of scouting before you jump into high risk ventures. It's better to have friends in the industry with these types of things. OK, I'll be one since you asked. Maybe Ms. Merchant Account can be the other.

If you have any questions on offshore/high risk topics, feel free to post a comment and we will follow up.

Safer Checks, Really?

Will, Will, Will, I get bounced checks all the time and Timmy's stuck in the well! Save us!

I hear it all the time. How to fix it though...

Check Guarantee. By the way, the name says it all. Not really anything complicated there. How one gets to it is another matter entirely. You see, in today's modern world the facsimile has helped us more than most know. Nowadays, when you get your checking statement at the end of the month, you don't get your checks back anymore, you get a facsimile of them copied right onto the back page of the statement. Nifty huh?

Just the fax, ma'am.

Well this is also how we can present checks. It is slightly more complicated as there are magnetic ink numbers on the bottom of the check, but most check scanners people use now are combinations of M.I.C.R. readers (mag ink character recognition, and pronounced "micker") and little fax machines that copy the check and send an image along with it to the banks. Using this advancement, we now have things like Remote Deposit (which I cover in What About Checks?), Verification, and yes, Guarantee.

To get these you must sign up for them and there is a fee. Sadly (and in total keeping with the industry), most groups and banks charge the same rate for Check Guarantee as they would a credit card. One should be able to talk them into significantly lower rates for the check, but that is up to you. Verification will go out and magically check to see if there is enough money in the person's account at that time. However, they can still go out and write a hundred checks before that one ever makes it to the bank.

Guarantee will, ...well guarantee that the check is good. Duh. It will not do this for all checks. It will however, go out and check the system and based on the person's history decide whether or not to pay it. If it declines, ask for another type of payment. If it accepts, then you are good as paid. This is because whomever guaranteed the check (the processor) is now going to pay you and the actual check will pay them back. Woe be to the person that bounces a check to an ISO or a processor. I have seen them chase a customer for 4 years over a $10 check. The check writer by then had over a $100 in fees accumulated over the one bad check.

Check please...

Why Your Restaurant is Paying Through the Nose... Part 2

Last time we spoke (I've missed you ever so much since Why Your Restaurant is Paying Through the Nose... Part 1), we went at length about how the industry often charges you for your getting the nice equipment. But there is more than one way to fleece a restaurant...

Another way is with their cash. Most restaurants use more and more credit cards these days because credit cards aren't real money. They are magical gift cards that taste like happy. Still, many people spend plenty of cash at bars and restaurants and every time the owner takes the cash to the bank, they get taken to the cleaners.

Why?

Banks charge for cash deposits. Oh yes, they surely do!

Now most people actually never see this charge as we deposit anywhere from twenty bucks to a few hundred. After all most of what we deposit is a paycheck. However, places that see a lot of cash, pay to deposit it. This is because a bank has to pay a cashier to sit there and count it all by hand. Think of it as a handling fee when you pay Shipping and Handling. The shipping fee is to get it to you, but the handling part is to pay someone to box that sucker up. Isn't this fun?

So what's the fee? Most banks charge about $1 for every $1,000 in cash that you deposit. This may seem like a small amount, but when your restaurant deposits $2,000-$8,000 a day in cash everyday, it gets expensive. This is why I like small banks. In most cases they have every real affinity you need on a day to day basis, but often do not have the fees some of the larger banks do as they are trying to cultivate business. If you deposit $2,000 a day in cash your savings would be over $700 a year.

Check around and see.

Before You Open That New Business...

Oh the trials and travails of opening one's doors for the first time. It's a shame that something which holds so much joy and excitement of the freshness and fervor of hanging one's own shingle, can so quickly get mired down in headache and heartache. This entire blog could be dedicated to just this topic, but as I focus on merchant accounts, let's discuss how your business should accept credit cards.

Should you or shouldn't you?
Depends, how much business do you want? My grandmother always said that a business fights for too long and too hard to get each and every customer in the door that they do not want to turn away a single customer because they cannot take that form of payment. Nowadays a business that does not accept credit cards loses over half of its potential business. To have to carry cash, and as much as you need highly limits shoppers. You should give them every opportunity to buy from you.

Should I Buy Equipment?
If you are a retail location, of course not. At least not new. There are places where one can buy refurbished terminals for under a $100 and that fits just about any shoestring budget. As well, most companies will give you a terminal if you are going to do at least a $1,000 in credit card sales a month. If you are not at that level yet, buy a refurbished until you can do that much.

Upfront Fees
Anybody that tries to get you to pay a setup fee of any sort should be shown the door. All they are doing is putting a bonus in their pocket Read my post The Painful Truth. Do not fall for it. It's your business and they want it. Make them fight for it.

Checks
There are multiple ways to accept checks. One is to use Remote Deposit (See: What About Checks?) and the other is to use something such as Check Guarantee. Remote Deposit uses a machine through your computer to deposit checks directly to your checking account just as if you went to the bank, but offers no additional protection and they require a certain amount to be left in your business checking account. Check Guarantee (See: Safer Checks, Really?) offers just that and you get it through your merchant account. Like a credit card there is a percentage taken out, but if the check is accepted, you are guaranteed the funds and the check cannot bounce.

Fees, Percentages, and All that Jazz...
How much is too much? What is fair? Hard to say as this is a highly mercurial industry. However, at the time of this writing and assuming you sell very safe items (no pornography, diet pills, hair loss treatment, timeshares, male enhancements, yadda, yadda, yadda...), Retail should be around 1.77%. Card-Not-Present environments (such as over the phone/MOTO, or over the web/e-Commerce) should start around 2.1% and climb. Make sure to read What Fees are Inescapable and Everything Else.

What are the Hidden Things?
Well that's the real question, isn't it? There are several things that I could go on and on about, but here is where you need an advocate. An advocate represents you, speaks on your behalf, and should have your best interest at heart. My Dad always said 'Vote with you feet'. If your merchant rep does not have your best interest at heart, leave and get another one who will. A good example of this is the constant rate climb of your account and the management thereof. This is one of the biggest ways that businesses get taken to the cleaners. Read: Percentages Can Grow Overnight for a more complete discussion.

Another hidden little item is when your customer uses a Rewards Card at your business. They get the sky miles while you foot the bill.

The Wrap Up...
Most anything here quickly gets in depth. This article links to several more fulfilling, but by no means exhaustive, discussions. Read and be wise. Better yet, post a question if you are curious or contact me at willb@merchantconsulting.com and we will probe your ideas further.

What About Checks?

Oh the lonely check...

Long since we thought it would go the way of the Dodo Bird, it still has its place in our lives. Still the main thought on most peoples' minds are how they can stream line the process.

I'm glad you stopped by. I can help.

First we should talk about making it easier. Now this mostly depends on how much one's business does in checks. If you do three checks a week, well there is not a lot to do in the first place. However, if you are very check oriented, and you need a way to ease up on the man-hours, then this is what you need: Remote Deposit.

What is Remote Deposit? This is where you get a machine from the bank, hook it up to your computer at the office, and deposit checks written to you from the comfort of your office. generally there are some requirements. The basic is that you either pay the bank $50 monthly or you keep $25,000 in your business' checking account. Doing the latter makes it all free.

I like free.

Now I have been pushing this on people for some time and just now are some of the banks starting to really push it. It saves man-hours as people do not have the added drive to to get to the bank, plus it is safer as there is less chance of getting held up for a bank bag that is all checks anyway. This again though, is why I like smaller banks. Whereas the bigger guys have been holding that secret for special customers for the past couple of years, the small, local banks often encourage it to their clientèle just to get them in the door.

So what do I do with the checks? Keep them... for about 45 days then destroy them. Totally. The real thing to remember here is that this saves time and trips to the bank, it does not, I repeat NOT make the check any safer. I cover that in another article
Safer Checks, Really? It does however add to the bottom line by saving your precious man-hours and having staff do the real work, not the leg work.

Check you later...

How Can I Get it FREE?

Free is one of my favorite words. Except in this modern world I am always looking for the catch. Where's the hook, as it were because this bass doesn't want to get reeled in and left flopping on the deck. The main thing that people can get free is their terminal that they use to process credit cards. There are catches, but if you go in eyes open you can avoid the hooks.

So how to do it?

Well the first thing you have to do is determine what your monthly credit card sales are. This may be harder to do if you are opening a new business, but this data should still help out. Here is your magic number, so have it engraved in your business mind: $1,000 per month in credit card sales. Actually, in most cases it is less than that and is in the $820 per month range, but $1,000 is both a nice round number and gives you some flex room. Knowing this will make your decision for you.

If you make at least $1,000 per month in credit card sales (not all sales, but credit card sales alone), then you can get your terminal for free. If the group you are speaking with will not give you one for free, show them the door. You see they should be fighting for your business. The only hook at that point is that you have a minimum $25 per month fee charged to you; however if your business does $1,000 in credit card sales monthly, then that minimum is paid in your fees taken out via normal charges.

Sound complicated? Remember that every sale your business makes via credit card two charges are applied for the use of a merchant account: a discount rate (a percentage) and a per transaction fee (a flat number). In terms of your monthly minimum, you will be charged at least $25. If you do $1,000 in credit card sales in a month, a little over $25 comes out in those two fees, if you do not do the $1,000, then you will be assessed the difference.

Now let's say you know that you will not do $1,000 a month, but much less. OK, you don't actually have to say it out loud, but you know what I mean. In that case you may not get it free, but you can darn well get it pretty cheap. There are several spots that will get you a good, refurbished terminal for under a $100 and they will last several years. That's even better as most small and new businesses are duped into paying a monthly lease that is anywhere from $39-$48 a month. To put that into perspective that's about $480-$600 per year every year. Even if you had to buy a refurbished terminal once a year, since they are generally around $85 each, you would still save around $395-$515 a year.

I'd take that choice any day.

Still, if you are anywhere near $1,000 a month, a minimum $25 fee contract can be quite helpful. You get a brand new, high tech, Star Trekkie looking machine, you often can get free paper, and generally if the machine is damaged, they will replace it up to twice a year for free as long as it is not a total loss as in by fire (because then they can refurbish that sucker and resell it). In either case here's what NOT to do:
1) Do NOT sign a lease for a terminal (buy a refurbished unit)
2) Do NOT deal with a company who is not prepared to give you a free terminal if you sign a monthly minimum
and this is a big one...
3) Never, NEVER sign with a company that wants to charge you a sign up fee (as discussed in the Painful Truth)

What Fees are Inescapable vs. Everything Else...

SO one of the first questions I am often asked is simply, "What do I absolutely style="font-style:italic;">have to pay?" Not a bad question, so let's jump right in.

Basic Fees
On each and every transaction there are two fees: a Discount Rate which is a percentage, and a Per Transaction Fee which is a flat number. One cannot avoid these two costs. No matter what these will always, always be charged. The main thing one has to do with these are to minimize them. If you do a larger amount per item, but not as many items per day, your Discount Rate should be proportionately lower, while your Per Transaction fee is less important. However, if you do small dollar amounts, but you do a whole lot of them the Discount Rate affects you less, but your Per Transaction Fee is critical. Examples of these are almost anything for the first category such as car maintenance, bedding, home entertainment, while the second is more like convenience stores where they sell under $10 per customer, but sell several hundred times a day.

Equipment
Most of the time, you can generally wrangle a free terminal or software setup out of the company that is setting up your merchant account. Here is where bids help. If you cannot, one can almost always get a great discount. If not, walk away, because something is rotten in the state of Denmark, Hamlet. Read my How Can I Get It Free? for extra meat on this, but here is the main point: They want your merchant account as that is where they make money. All else is gravy, and gravy is highly negotiable.

Industry Traps
The worst thing about accepting credit cards is that it seems there is little method to the madness, only more madness. I spend a lot of time on how Rewards Cards put the screws to the merchant in Sky Miles Cost Your Business, and it's all true unfortunately. The short of it is this: if a customer uses a rewards card at your business, you pay an additional 0.3%. That may seem like chickenfeed, but that chicken eats good, ...really good and all on your dime (sorry about mixing the metaphors. I get emotional).

Getting "Ding'ed"
A 'ding' is any fee that the industry tacks on after the sale. Rewards Cards are one, but the most common is poor data collection and entry. In short, the transaction cost your business more, because there was not enough information, or not enough good information to be able to charge you less. The most prevalent and worst example is entering the wrong zip code that your customer's card is billed to. You get ding'ed by having the authorization go through not as a qualified sale, but at a higher fee tier called a 'Mid-Qual' or a mid qualified rate. Sadly, you may have gotten this information AND have put in in correctly, but the customer simply gave you the wrong data. You would not believe how many people do not know where their card is billed to. Is it home? Work? Or that address where we signed up for the card seven years ago, but haven't lived at in three?

Monthly Fee
OK, so everybody has a monthly fee, but they should be fairly innocuous. Here's the rub: if it's any more than $10-12, someone is getting a bonus and needs to bee shown the door. These are small fees and if they want your merchant account, they should hand that to you at cost.

Everything Else
That's about it guys and gals. Everything else is, well ...everything else and is very negotiable and dancing around the "show them the door" policy. Sign up fee: Bogus. Show them the door. Set up fee: Bogus. Show them the door. Annual fee: door. Report fee other than the monthly statement fee: door. If your business does a $1,000 a month in credit card sales and they want to charge you for equipment: door. Contract longer than three years: door. Contract three years, but equipment contract four years: door and a boot in the tuckus.

If you have seen any odd fees and you have a question, please post it and we will dedicate some time to it.

Why Your Restaurant is Paying Through the Nose...Part 1

I love going out to eat, but then I am an omnivore in the truest since. The things I don't eat on this planet can be counted on one hand not using your thumb or pinkie. One of those things is a lassie (pronounced: LOSS-ee). It's a Middle Eastern warm, thin yogurt drink traditionally served salty. I have had one (mark that: ONE). I am not a fan.

But I digest...

I love restaurants and have consulted with more than I have ever eaten at and it still stuns me how they are taken advantage of and both involve payments. First and foremost, most restaurants have a POS (point of sale) system that is made to greatly boost their efficiency. One of the largest systems out there for these restaurateurs is the Micros System. Micros is wildly popular, expensive, and just like Darth Vader is big, mean, and very, very good at its job. (Unlike Lord Vader, Micros is not Luke's father.)

So then what's the problem, Will? Funny you should ask. The problem is that many processors add a surcharge to a company that uses Micros because Micros connects via the internet. Now don't tell anyone, but all systems out there connect to their respective processors via the internet one way or another. This additional fee tends to be $0.05-$0.06 per transaction and is simply often added directly into the Per Transaction Fee (read my blog: What Fees are Inescapable vs. Everything Else) so that you do not even see them.

OK, here is where you should start acting like Gollum and thinking of your hard earned money as your precious. Remember, it wants your precious. But your precious is yours. After all, you wouldn't buy a car if the dealer said that they would charge you, over and above the cost of the car and the gas prices, a Per Transaction fee every time you used the car to drive to work would you?

If you answered yes to that question, please call me on my cell. Have your credit card information, social security number and Mother's maiden name ready...

The way to avoid this is to ask. Unfortunately many on-the-street sales people are afamiliar (that's just a fancy version of unfamiliar, but with the added bonus of making me sound like a professor) with Micros fees that their ISO's and/or processors may add. In that case, and just to be sure, ask them to give you a copy of the would-be contract way ahead of time so that you can read over the fine print. this must be done as all this adds up. I have seen restaurants with a hundred credit card customers a day get charged because they used a Micros (which is like a gas station charging you more just because you are a Cadillac Man). That means they were paying around $1,500 a year in fees that were unnecessary.

There's an old saying: Fool me once shame on you. Fool me twice, shame on me. Fool me many times a day and charge me for each one and I must run a successful restaurant that uses some of the best equipment money can buy because you slipped something in on me.

There's something rotten here, and it ain't from the kitchen...

See you next time in the further misadventures of people's restaurants getting fleeced in... Why Your Restaurant... Part 2.

Gateways and You...

What is a Gateway? Sounds like something from a Transformers movie.

A gateway is a way to process credit card transactions. Simply put, it's the medium used to get your customer's credit card data to a processor, so that you the business can get the money. generally it comes with what's called a virtual terminal that sits on your computer. You open up the virtual terminal, put in the credit card info and send it through the gateway.

Sounds like magic. Lost yet?

Well the industry is generally hoping you are. To speak plainly, it should be called a Tollbooth, not a gateway as that is what is really happening. Why? Because every time you cross it, there is a charge. By the by, that charge is OVER AND ABOVE any other charges you have in terms of your basic fees. What's worse, is you can never make enough purchases to own the gateway. Think of your cell phone. If you called Japan 23 hours a day from the States, every day, you would never make enough calls to own Sprint. Gateways are simply going to make a per click every time you use it.

What if the gateway goes down? I have literally seen customers rabid and foaming like a chained Schnauzer watching cats dipped in bar-b-que sauce run by because their gateway (and thereby their business' ability to accept credit cards) was down for two weeks. Two weeks?

Would I lie to you? Come on, we went to different high schools together...

Don't get me wrong. Gateways have their place, I just tend to think that 99% of them should be in my backyard near the trashcan so I can take it out once a week. Still, if you are launching an e-commerce sit, and do not have the full ability to set up your own system and shopping cart, a gateway can be used as a crutch to get you through. But remember, you are paying to use it even above your already negotiated fees.

What About Macs and Credit Cards?

Do you like your Mac? Of course you do silly goose, it's a rhetorical question.

Why? Oh for silly reasons like you enjoy having a computer that works. You do not have an affinity for computers that write packages like Vista that shut down really useful things like Adobe Photoshop, and write in non-backwards compatible word programs. Oh, and you do not love to spend the majority of your day chasing down viruses.

Little things...

Sadly though, there is almost no business software out there for your trusty friend the Mac. Especially when it comes to credit card software. There is simply no real answer out there. Back at the turn of the millennium there was a package called Mac Authorize, but it has since gone the way of the Dodo bird. Gone. Extinct. Finito.

There are some gateways that will work with a Mac, but gateways as a whole do not help the consumer. (For more on that look up my blog on Gateways and You.) So what are you left with.

Well here is where some smart cookie jumps in and handles the niche market (shameless plug) such as the guys at my company that make
TakeCharge software. Luckily this current only game in town for Mac guys. It actually runs on both pc's and Mac's, but the important thing is that it runs on a Mac.

Better yet, when ordering one does not have to say send me the Mac version. Oh no. All you have to do is to purchase a copy of TakeCharge as there is only one flavor. It will simply, magically run natively on either Mac or pc.

The only downside is that there is more Mac work to do. It is growing in popularity and so we are adding for all our Mac guys out there things like Candy Appliquettes, Dashboard, and AppleScript (and the crowd goes wild). However, if you are one of the business people out there frustrated at the lack of Mac in the workplace and lack of workplace Mac stuff, we are there for you and growing.

And the world has taken note. Normally to get an article in MacWorld Magazine one must be advertising with them first (advertising starts at $20,000). However for us, they said they would give us a free review.

What's that, you say? Support from rabid capitalists? Absolutely.

Mac themselves have even jumped in the game and had their M.U.G. (Mac User Group) affiliate contact us to give us free listing in their publications to 10,000 MUG's across the globe.

OK, now I'm swooning. (Swooning? When is the last time you saw that in a sentence?)

Now we cannot take all the credit here. Mac and pc (Microsoft) have helped. Every time Mac runs another commercial (I love those things), we sell more. Every time a new pc goes out with Vista and a business owner takes a hammer to his monitor, we sell more. Mac's percentage of the market has gone from what would be under 2% to over 7% in the last year. Please do not quote me on that as those numbers were collected in a completely unscientific way and using very little empirical knowledge. Still one can tell the growth.

All I can say to all of you very monogomous Mac users out there is: More and more is coming. Keep a good grip on that Apple.

The Painful Truth About Signing Up...

OK, so maybe you signed up for a merchant account a year ago and your business is already taking credit cards or you are just now looking into it. Either way, learn for the next sign up or the first one. Sit down, and oh... you may want a drink.

First and foremost one of the worst things about the industry is the salesmen. Chuck, Alicia, whomever I'm sorry but it's true. 99% of merchant account sales people give the rest a bad name. Why? They make money by up~charging you the client. This is not always the case, just in 99.99999999% of all cases I have ever seen. After all, there has to be an incentive plan for keeping these guys and gals hitting the bricks.

Well here's an incentive: a sign-up fee. A sign-up fee? Are you kidding me? You want me, to pay you, in order for you to make money off me? I am supposed to pay you for that?!

...Anyhoo, this is a fee that goes one place and one place only: the saleman's pocket. Oh yes, make sure you know this. The only reason that it is on the contract is so that they can scratch through it with a pen and say, "but because it's you, we are going to waive that fee". How sweet. However, if they think they have a nice, fat fishy on the line they will charge it and simply put it in their pocket. Yay! Sushi's on me tonight!

This I cannot be clear enough about. If you have someone who wants to charge you a fee to get set up when their company will be getting a percentage of your hard earned money for the rest of the contract you need to introduce him and his plaid, reversible, polyester jacket to the door. Would you pay a fee to a car company in order to be able to pay them for a car? "OK, let's see... that Ford costs $26,000, but I will need you to pay us a $100 fee in order for us to be able to give you the privilege of buying from us." Goodbye and get out.

I have seen so many established businesses doing high sales that have paid this fee that I cannot imagine the level of salesperson that would actually charge it . Seriously, their bio would have to start, "Leaving a trail of slime wherever he goes..."

Bottom line: your business is worth something and there are fifty other companies out there willing to take very good care of you simply in order to beat out the other guy. My daddy always said, "Vote with your feet." In other words, if you don't like it, there are a lot of other choices out there.

Why You Sould Read this for Your Business...

I work in a dirty industry and have to spend a lot of time apologizing for it. The industry? Credit Cards and their Merchant Accounts. If you are wondering, "What the heck is a Merchant Account?", don't be embarrassed. Most do not know. Simply put, in order for a business to accept credit cards, they must have a Merchant Account.

Having spent years involved in Master Card-Visa Law and the Credit Card Processing Software industry, I have people and companies call from across the country that ask advice on certain topics. Having done that, I would like to share the ups and downs of this secret knowledge with you. After all, though it's made to be overly complicated (and on purpose), most of it is common sense. My Daddy always said, "Most medical jargon is just common sense. Doctors just like to inflate it to earn a paycheck." Well, that is true here as well.

There is no charge for this data, and I have little to nothing to gain from sharing except that maybe when I am sitting in my house eating take-out Chinese and watching a movie, I can say 'I helped another one' as opposed to avoiding thinking 'another one got duped.'

That being said, there is no quiz later, but you should still pay attention. The real test is the business world and the grade is how much or how little you paid. Feel free to refer back often and send in any questions. You may be thinking a question that a thousand others would like to know.

Read up and be safe out there...