But please don't read the paperwork!
Please forgive the very insinuating picture I used with this, but many people actually believe what people in my industry say without backing it up by reading the fine print.
Buyer beware...
I recently spoke to a business and he asked me my term of contract. I told him 3 years. Standard. Some people try to slip in four, but's dirty pool. He told me that my competition said they had no term. That there was no contract period. I replied that I would bet my car against whatever he had in his pocket be it lint, a stick of gum, and a paper clip. He asked me why I was so sure and I informed him that MC/ Visa required a contract. A contract not only locks them in, but protects them in many cases as well. Imagine a customer that is told he will get 1.71% and $0.15 per transaction. It's a decent rate, but when his deposits to the bank show that 10% was taken out has has no leg to stand on... because he has no contract. The numbers changed since he signed. The real reason that MC/ Visa will not allow n account with no contract is that their would be no guarantor. The merchant could do anything and not be help responsible.
(By the way, he signed with the other guy and called me 2 months later furious that he had been taken advantage of and wanted me to explain it to him.)
Plain and simple: There must be a contract. With any contract, there is a contract term.
In the same way, people are often duped when they are told this, but unfortunately they rarely read the paperwork. One of the last cases I worked on a man was told that his terminal would have no cost, but he signed the paperwork including the lease stating that he would be charged $32.95 a month for four years. he didn't know wheat to say when I pointed it out to him except to repeat that he was told there would be no hardware fee.
As well, he was told there was no termination fee. Of course there was, and there always is. Read the fine print. Truly it is only fair for a company to charge a termination fee. Why? There is no cost to setup. More accurately, there is no cost to you the merchant to be setup, but there is a cost. If you were to leave quickly, the cost to the companies involved would stack up quickly. Most reputable firms will charge about $300 to terminate. This number however will normally degrade over time as they not only get their fees, but recoup the costs. Normally after the second year the cost is $100, $50, or nothing. The way to make it nothing is generally to call the group that has your account and ask them to close your account for you. If you call your processor directly and close your account, you could get hit with the whole fee. Call your merchant group, and they can generally get you out for free.
The real reason there is a termination fee though is this and only this: the industry does not want you hopping about like a frog on a hot plate. In the early '90's the long distance wars created such a company-hopping environment that millions were lost. Everyone started under cutting their fees so greatly just to get clients to stay that they undercut sustainability. It all eventually crashed.
The long and the short of it is this: the sales person can say anything, but paperwork is where the noose is found. Read it. Know it. Understand that some requirements and limitations are fair. Just make sure that they are no so high that you hang yourself.
No comments:
Post a Comment