Your Merchant Account: Beware Any Sign Up Fee

"This is great. How much is it going to cost me?" This is a question I get asked over and over. Bear in mind that the business owner/ manager already knows all the processing fees. What they are asking is in fact: "How much do I have to give you to enact all of this?"

Zip. Zero. Zilch. Nada... Sorry, but there were no more 'z' words.

They don't understand. It can't cost nothing, so they re-ask. "I know, but how much is it going to cost me to get started?" Nothing. "OK, but if I were to say right now, 'Let's sign the papers', How much would I have to write the check for?" The only check you should give your merchant provider is a VOID-ed check so that they can send the money to your bank account. "Yes, yes, but how much do I write the check for to you?"

Here's the issue: These poor souls have been rooked for years by salesmen that charged them a fee to get signed up. A fee that does not exist. On many of my competitors' contracts though it has areas for sign up fees. They will be called anything from contract fee, paperwork fee, assessment fee, debit network sign up fee, installation fee, or just about anything else. They are not real. Back in the 80's there were fees when quite simply the infrastructure was not really in place, and even into the 90's, but now they do not exist. There are only two reasons the fees are still in certain contracts. The first is so that a salesman can look you right in the eye and say something like, "You know what? Just because you are the handsomest devil (or prettiest/ sweetest business owner) I have ever seen, and just because I like you and we went to different high schools together, I am going to waive this fee." Then they strike through it, or write in zeros. This is to make you feel very good that due to your size and importance (which mean very little to MC/Visa), and because of your business knowledge and influence ...and let's face it: sheer, magnetic power, they gave you the inside deal. Everyone loves the good old boys network who's in it, and now you are.

The second is the real culprit. This salesperson has been chatting you up with more enthusiasm than a kid trying to explain to his mom that he really, really needs a chainsaw and a motorbike, and he senses that he's got a whale on the hook. Not a small fish that you would have to tape several together just to get a fish stick, but a whale. All he has to do now is real you in. That's when he explains that there are some fees to get you setup, but the savings he is going to give you will more than offset that, and you'll be richer than Midas in no time. After all, if you balk at the numbers, he can always go back, and if you are willing to sign today, probably get his boss to waive those (nonexistent) fees. Problem is, most people don't balk. They don't jump the hook. They pay it. I have seen businesses pay anywhere from $200 to $900 in these bogus fees and it stinks.

Let's put this in perspective. If I am selling you a car for $22,000 and I look at you and say, "OK, now before you give me the $22k, I am going to need you to give me $400 so that you have the honor of paying me $22,000 in order for me to sell you this car." Would you laugh at me? Would you get angry and explain that one of us is waisting the other time? Would you look for something to throw? All of these answers would fit someone. The truth here is that you wouldn't accept it. However, you might when it comes to your merchant account. After all, only nuclear physicists with advanced math degrees really understand the numbers involved in the world of accepting plastic. Easier just to pay the bill and make it go away.

Wrong. Dan't pay it. Throw them out and never let them back in your doors again. I believe this is such an unforgivable sin that my company will write no contracts for any processors that have a section where a fee could be written in. As well, if an agent ever tries to add a fee to ours for any reason they are terminated and they lose their residuals stream. Why so fierce? The money goes to one person and one person only: the salesman; and it is something that when the customer finds out will create a lot of bad blood and probably make the customer leave. Any salesman who is willing to jeopardize my company, our integrity, and our income for a couple of hundred bucks has no place working for me.

Don't let them work for you either.