Your Merchant Account Blog

The 6-Second Audit

2010-08-02T11:55:00.000-07:00

Nobody reads their merchant statement anymore... nobody. The number of times I have been told that [a client] doesn't have one and a half, two, or four hours to take a calculator and decipher their monthly statement is larger than I can count; and quite simply, is a fair thing to say. Granted, it's one's business and one should make time, but the monthly report is made to be so complex that it's actually designed not to be read.

Why? Because whatever gets measured gets improved. If one were to be able to quickly read through and understand their merchant statement, the travesty that would befall the industry would be great. The industry doesn't like a business to understand its fees, so they design it to be glanced at, (it seems to spill everything before you), and then be tossed aside. 84% of all businesses do not read their statements. This includes people that open it, copy a couple of numbers into a spread sheet, then file it forever. This is no reading. This is being a stenographer. Stenographers are great I'm sure. So are phlebotomists and sketch artists, but neither of these jobs help here. These should be read. If you can't do it, call the group that set you up and have them explain it ... line by line. If they won't do it, fire them and call me.

However, there is another way. It is not perfect, but it can help you keep an eye on what you do and where your money goes and all without you taking hours to decode, decipher, learn and re-learn how to do it every month when the new statement comes in. Here's how:

1. Start a file marked "Merchant Statement"

2. Put your copy of your merchant account contract in it. Don't have one? Don't be embarrassed. OK, be a little embarassed, but don't dwell on it. Maybe you have taken over for someone else and their records weren't the best. Call your group and have them send you a copy of the signed agreement, not a blank document. Do not re-sign anything. This is just for good record keeping and to establish a base line.

3. Take your monthly merchant statement and have someone you trust (I can even do this for you. Simply fax it into me and me and my team will help you track this at no costs. We just think you're that neat) circle your discount rate, per transaction fee, and monthly fee. This is the most important step because if you get this wrong, everything else is worthless.

4. Highlight those numbers in a bright highlighter. I Like Pink or Green as they fade very little over time. File it in the front of the file.

5. Every month, use the last month as a template and highlight those same numbers. File that month's statement in the front of the file.

6. Every month grab the last three or four statements. Flip through them and see if your numbers are descending as you flip through them. If they do get smaller, then you know your rates are increasing.

If you like, you can even write your starting numbers from your contract on the outside of your file. This will make it so you may compare immediately your original vs. current rate.

Warning; Do not drink anything while you are doing this. Neither I, nor Meridian Merchant Services are responsible for any fried keyboards, monitors, nor office cleaning, nor ruined documents when you spray everything with spewed coffee when comparing the differences.

Cut Lines to Cut Cost and Save $720 Annually

2010-07-06T06:17:00.000-07:00

Over and over again one of the number one questions I get asked is how to cut costs. It makes sense that there are some things a business must have and are simply the cost of doing business. However, they simply want to go to the horse's mouth and say, "what would you do?"

Simple: Remove a land line.

Phone line that is. Most businesses have their lines set and really have no choice in the matter. However, times they are a changing. No longer does one need a dedicated line for their credit card machine. They just need the internet. This makes sense for businesses that are all cell phone and don't need a hard line at all, and also for businesses that have everything through their internet. Some businesses just need to remove one of their land lines. Either way, the savings are real.

One example is that of a mall style kiosk. For them to have a phone line, the phone company will charge them a minimum of $60 a month before any calls are made. They can simply use a wireless terminal. Most companies are not in the mall in the middle of the aisle, but instead have a hard and fast location. In this case, use a splitter and run the credit card terminal and the fax though the same line (both are considered seldom use items compared to a phone).

One can also route their credit card terminal through their internet connection. This is not hard to do, but you must tell your provider that you want an internet setup and you will need a piece of Cat5 or internet/ network cable (Cat3 is a regular old phone cable). This can be bought at Wal-Mart, Best Buy or where ever for $10 (better yet, ask the group that set you up to bring you the cable and set it up for you. We do it for our clietele, and yours should do it for you....) Then, simply plug your credit card terminal in to your switch or hub and you can have the old phone line removed or used for another system or phone.

If you really want to spice it up, remove the terminal altogether and get a virtual terminal that resides on your computer. If you are retail you will need a mag-swipe (magnetic stripe credit card swipe). It's about the size of a candy bar and plugs into the back of your computer. Using this method, one doesn't even need to plug into the switch/ hub, the computer does that and your virtual terminal sits on the computer.

It's cheap. It's easy. It leaves you with more money at the end of the month.

Hablo Espanol? Your Merchant Account Does...

2010-06-14T10:41:00.000-07:00

One thing that has been asked for years is, "Can we get that in Spanish, Chinese (Traditional and Simplified), and any other number of languages here in our great melting pot? Oddly enough, it's not the businesses that ask that. It's us the ISO's (independent sales organizations) and MLS's (merchant level sales) that are asking that of our processors for our businesses. Unfortunately for years the answer has been a nearly unqualified 'No'. I say nearly, as the main issue has always been the big one: the contract. Contracts are the hinge pin of the whole environment and incredibly important. After all, 99% of my business is not brand new customers opening doors for the first time, but cleaning up the train wrecks business owners have gotten themselves into. Let me say that in another way: 99% of my business is cleaning up the train wrecks that native English speaking business owners have gotten themselves into after signing contracts written in English. The contracts that processors use have spent years in legal being constructed, reviewed, refined, and re-refined to the point where they are at now. To get them in other languages was always presented as a Herculean task, and was not made an actual labor of Hercules as Zeus thought it would have been unfair to ask the mythical hero to perform such an impossible feat.

However, it has been done.

After years (actually going on four now of Meridian asking its processors to produce), a customer can get their contract in Spanish as well as Merchant Support, Tech Support, and even their credit card machine prompts, menu items, and read outs in Spanish. This is a coup of an extraordinary level.

It is also well timed. The Southeast has many businesses that are native Spanish speakers and this level of Business-to-Business support is a great boost. It allows business owners to read a contract in their native tongue lifting their comfort levels immensely, as well as allowing them to have exchange program students and employees such as from Armstrong's H.O.L.A. (Hispanic Outreach & Leadership at Armstrong) program to come in and not have to concentrate on the machine's prompts and messaging, but to fulfill orders and demands of the business.

Meridian's own due diligence in this area over the years has always shown a large need. This is because Savannah has distributors that service 3,000 Mexican restaurants in the Southeast alone. As well, many of our referrals come from CPA's that want us to review their clients' merchant statements. A follow up of this showed a CPA firm that had added a single Spanish speaking accountant, who once hired had more business than he could possibly handle. Add into the mix L.A.S.O. (Latin American Services Organization), and Savannah's own La Voz Latin periodical, and you have a business case for some real business.

Now forgive me if this part sounds like a commercial, but due to the years invested in getting this done, my own firm was rewarded as the first group (and so far only) that has this capability to provide for their Spanish speaking clients in the Southeast. We would have been happy just to get the contracts translated. However with the addition of Merchant Support and Tech Support being in Spanish so that any questions from day-to-day operations that come up, a business owner does not have to fear that they will not properly explain the issue properly. After all, it's hard enough for native English speakers to explain a merchant account issue due to the technical language barrier, much less explain it in one's second language. As well, add the fact that the machine itself is available to have all of its menu and actionable items come up in Spanish, and you have a business owner which is empowered to achieve their American dream.

Questions From a Reader:

2010-05-26T11:06:00.000-07:00

QUESTION: Why is there so much data needed from me? They are going to be processing my money, shouldn't I be getting 30 pages of data on them?

This is a great question that is so often echoed in the frustration of people and businesses while setting up a merchant account. Yes, there is a lot of information required of you. Be happy of that. Why? Let me give you a scenario...

I am a crook and I want money. How do I get it? Well, I have a computer, an internet connection, a camera, and a merchant account. I go trolling for old cars. I find a 1968 Dodge Charger with a Straight Six in triple black sitting in someone's driveway. I get a good picture of it. I then go home to my den of crime and upload my new photo on my computer and post it in eBay. I say that it's my recently deceased grandfather's; and though I love it, I cannot bear to have it around now that he is gone and I put a price of $5,000 on the car. As that is a fraction of the car's worth, it is snapped up immediately, they pay via credit card, I get my money in 48 hours and the buyer wonders where the car he just bought is. Why? I am gone. Long Gone. I am a crook after all.

Now it is not as easy as that for one important reason: it isn't that easy to get a merchant account. That is because one doesn't need a mask, a horse, a six-gun, and an empty sack with a dollar symbol on it to be a crook anymore. You just need a computer, an internet connection, and a way to process money (hint: insert the term merchant account here). Merchant accounts deal with money; and that's the one thing everyone wants. More importantly, it deals with the way money is passed from Person A to Person B. My father is an attorney and he has always said that, "99% of all laws are about money, and 99.99% of those laws are about Person A passing money to Person B. Because THAT is a taxable event."

Not to mention, there is substantial underwriting and risk involved in merchant accounts due to possible fraud. Although the world will tell you that credit cards aren't real money, they are magical gift making machines that taste like happy; in fact someone does have to foot the bill. If a credit card transaction goes bad, either the issuing bank (the company that created and sent out the credit card), MC, Visa, Discover, American Express, the business where the bad transaction happened, the Fed, or the card holder is going to foot the bill. Somebody, and I do mean somebody is absolutely going to have to pay it. Whether it's for $1.35 or $50,000, somebody must pay the bill and generally that someone is the business involved and their merchant account.

In fact, we normally think of the majority of all credit card law protecting the card holder. That though is patently un-true. They protect in this order: the Fed, MC/Visa, the card issuing bank, the card holder, the processor, and finally the business. Unfortunately part of this is simply because a business can be run so poorly as to violate the system and run costs up, while the card holders are voters and their senators want sound-bites saying that they should be protected, even if they buy $100k more than they make in two years.

Finally, let it be said that the processors which are getting all of this sensitive data on you are to be trusted. They have to go through extreme measures to make sure they are protected in ways that most people could never dream of. Secondly, they have their hands all over not just the money, but the most sensitive of all: card holder data. That is to say the name, card number, and expiration date on the credit cards themselves. If they were to ever get hacked (and there have been some extreme cases), they are very liable for all of it and can be sued by each and every card holder, as well as getting delisted by MC/Visa.

In short, all that data is to make sure you are a real person and you have a real business. They are weeding out people signing up their deceased relatives with fake addresses at the mall or post office. You are real. Your business is real. You have a real address.

Welcome to the world of business.

It's Not Finding a Leak and Plugging It...

2010-05-19T13:57:00.000-07:00

It's Finding A Problem And Getting Rid Of It.

All too often something happens.

A company is having their rates reviewed. They are high, sometimes really, really high. The would be new merchant services provider quotes the company that is paying too much a number that is not just lower, it's a good rate. The company that has been paying way too much reviews it, but never signs with the new firm. Instead, they go back to their existing provider, tell them the quote, and when they say, "We can match that," they stay with them.

Did you see what just happened?

The company was paying too much. They were paying too much because their current provider was rooking them on fees, or didn't monitor their account, or any number of reasons; but when the rubber meets the road, they were being overcharged. A new, prospective firm quotes them and saves them mucho dinero. Is the new firm rewarded as they should be by giving them the account and switching? No. They are used. Please understand what I am saying when I use the word 'use'. I mean it in the sense of something dirty. Like someone who had been lied to just so the user could get what they were really after. The new firm was used, because the company didn't really have an intention of switching. It's too much hassle. They just want to make sure they aren't paying too much. To them, it's like they found a leak in the roof and they plugged it.

In fact, it's more like they found a thief in their midst. Think about it. If you caught someone with their hand in the till, you don't tussle their hair and say, "OK now, I caught you. Quit stealing you little scamp...". No, you fire them. I was once in a man's office giving him his quote which apparently was much lower than what he was paying now. He asked me to wait a moment, put his phone on speaker phone, dialed a number and waited while it rang. When Bobby (the names have been changed here to protect the guilty) answered, he said who he was, and stated that he had a competitive quote on his desk from a competing firm. He gave Bobby the numbers from the quote and Bobby quickly replied in a very sunny voice, "We can match that for you", as if he was doing this man a great service for his years of loyalty. He asked Bobby, apparently just to make sure, "OK, so you can match this for me?" "Yes, of course," answered Bobby.

I couldn't believe it. I knew this scenario. This man was actually going to cut me out of the deal even though I was saving him thousands of dollars a year. His old company would have kept charging him the exorbitant fees unless I had given him a good rate to compare to. That's when it got really interesting...

"You're fired!"

""Sir?!"

"You are fired. Unless you can answer three questions to my absolute satisfaction."

(dead silence... on the other side)

"One: Why is my business only important to you now that I'm leaving you?

"Two: Why didn't you give me this rate to begin with? And

"Three: Are you going to retroactively pay me back all of this money that you have overcharged me since I opened my account with you and issue a formal apology?"

I have never been so proud of an individual that wasn't in a cowboy movie.

Your Merchant Account: Beware Any Sign Up Fee

2010-05-12T11:11:00.000-07:00

"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.

Your Merchant Account: Greater Risk Means Greater Costs

2010-05-07T08:40:00.000-07:00

Time and again when I am reviewing with potential clients about their businesses, they tell me they don't understand where the money is going, they ask why certain transactions cost more, and how to possibly track them. This is understandable. After all, the industry secretly prides itself on its ability to seemingly report everything to its customers all the while making them more confused than ever. To put this in perspective, 84% of businesses do not read their monthly merchant statement. Seriously, ...84%! People read their electric, gas, water, and phone bills, but not their bill for accepting credit cards.

Let's make it easy shall we? The riskier the transaction, the more expensive. Think of it in terms of underwriting. It costs a lot more to insure a Corvette than a Chevette. The same goes with a business's merchant account. The bigger the risk, the bigger the cost to cover it. If a customer comes in with a credit card, it swipes as it should, the planets align, God is in His Heaven, then boom: you get a better rate. If the customer's card won't swipe, then greater risks have entered in while your employee is hand-keying the card in. Congratulations, your rate just went up. It will go even higher at this point if they don't capture secondary data like billing zip codes and CV numbers (the 3 digits on the back unless it's an Amex who has four on the front). Your costs however, have not hit their ceiling. If the customer is using a Rewards card [see: Rewards Cards] such as a card that gives them sky miles, bonus points, or cash back; your rate will shoot straight into the stratosphere.

It's not all bad though. Your rates can also go down. If a customer comes in with a debit card, your rate drops. If they put in their PIN (personal identification number: in truth merely an electronic signature which is verifiable by the Issuing Bank), then the highest your company can pay is going to be about $0.87 and PIN-based debit is good up to a $500 purchase. Isn't that nice? This though is merely the other side of the coin: the safer the transaction, the less expensive.

These standards also apply not just to transaction type, but business type. In the credit card world, there are only three types of businesses: Retail, Hand-Keyed, and eCommerce. The way to determine what makes a business what is to look at how the customer pays the business. If they are face-to-face, it's Retail, over the phone it's Hand-Keyed, and online it's eCommerce. Businesses can be a combination of the three. Nowadays, many businesses do at least two if not all three options. However, I must be very clear here. In nine out of ten cases a business must have a separate merchant account for each way they accept credit cards or they are inviting trouble. This doesn't mean simply from fraud, but by possibly getting delisted by their merchant service provider. When in doubt ask your professional.

Most of my industry (which I apologize for, a lot) is kind of like speaking with a doctor, or your average computer geek (I use the term lovingly...). There is a lot of jargon that if you boil it down is mostly common sense. You, yes you, can understand it; if you make them take the time and avoid 'industry only' words when everyday language will more than suffice. Here is a good trick to know: Go to your merchant statement and look for the numbers of transactions by card type. An example of this would be: Visa Card Merit II ................236. This means that for that type of card, your business had 236 transactions. Once you have found that area, look for the card type with the single largest number of transactions. Ask your merchant professional if that is the safest card type, and what you can do to have lower cost cards make up the majority of your statement.

Beanstalks Aren't the Only Things That Grow, Jack...

2010-04-30T06:56:00.000-07:00

I apologize for my industry... a lot.

One of the things that is often the toughest point to get across to potential clientele is that the rate they signed up for a few years ago, is not necessarily their rate now. I often have to show them their current statements showing what they are paying last month and compare it to the contract that they signed three, two, even one year ago. It's often much, much worse when they have not switched for four or five years.

"But I have a contract...?!"

Unfortunately people believe two things: 1) that just like leasing an apartment, that rate is the rate for the term of the contract, and 2) that if they look at the sheet with the rates on it, they do not have to read the rest of the contract. The problem is that the contract says the rate can change. It might as well say that the rate will absolutely change, and that right soon. When businesses have our firm review their rates they are often aghast at what they see and how much they save. Most often it's between $500-$2,000 annually, but in the past fiscal year we have seen businesses overpay by $4,000, $8,000, $11,000, and $22,000+ for a single year. What's worse is that while some are large, others are just average size businesses paying through the nose and not even knowing it.

In these cases we tell people that they more than likely weren't duped, and probably had a fine rate in the past, but they didn't watch it. Well my grandmother had a saying, "Whatever gets measured, gets improved." Boy howdy. Our industry shows that on average 84% of businesses do not read their statement. They throw it in a box, a drawer, and say that eventually they are just going to plow through it. They never do. Included in that group are the 'stenographers.' Bookkeepers and business personnel that open it, but all they do is copy two or three numbers to a spreadsheet, but they don't read it.

An industry paper (which is a VERY boring periodical... avoid it) reviewed a senior man who has been in the industry for about the past thirty years or so and is richer than Croesus where he spoke of his one main job which was the creation of his company's monthly merchant statement. The thing that really made the article interesting was his statement that [he] "couldn't read his competition's statements." In other words they are made to contain as much data and as little information as possible. This is because it is to work hand in hand with the knowledge that no one reads their contract. Well guess what? If you don't read your contract, and you don't read your monthly statement (which is designed not to be read), then when your rate is climbing up, you'll never know it.

Again, I apologize for my industry, but a lot of the burden is square on the businesses' shoulders. They should read the contract and they should read the monthly statements. If you can't read your statement, ask your merchant account rep to come over and explain it to you line by line. If they don't have the time, channel Donald Trump, fire them right then, and get someone who will. My firm actually helps our clients by auditing their account for them every 11.5 months; however, we are not the only ones. I have heard of two other groups that also do this and that's only counting North America. The objective is to allow the business to do what they are in business to do, and take some of the work off their plate.

Responsibility though always rests with the business and they need to learn what they need to do. Education as always is the key. Most do not read their statements as they are designed not to be read, but you do not have to spend three hours with a slide rule and an advanced mathematics degree breaking down your statement every month. There are two methods that we call the '30-Second Audit' and the '6-Second Audit'. Anybody can do either, and both should be done every month. Do them both every month and you will see the spikes as they happen in your account. The rest is up to you.

Call or email us and even if you are not with our firm we will teach you these audits at no charge.

Bigger Doesn't Always Know Better...

2010-04-26T11:48:00.000-07:00

I have spent so much time talking to people and their companies, from large to small, that I really don't get shocked anymore. We often deal with significantly larger groups and I have to warn junior agents that just because they are bigger, doesn't mean they know better.

"But they have people."

I have spoken to numerous groups at length and just last week spent time with a company that had 500+ stores; and they did the unthinkable: they leased their machines. What is worse, they were setup on a monthly minimum which is only done when you are given a free terminal placement (opposite of leasing a terminal wouldn't you think?), or in essence were double-tagged for the same machines I would have given them for free. In short, they paid a little over $100k in four years that they didn't need to pay.

And it happens everyday.

I use it to help train my people to shoot for the rafters. After all, the brass ring is only there for one reason, so that you will reach for it. However, I also warn larger groups that there is always room to sharpen the pencil. After all, the only way I was in front of a 500+ store company was that they were over paying in the first place.

Per usual there are multiple places to look for corrosion:

Terminal Fees

Terminal Fees for out of date machinery

Contract fees

Additional lines that are unneeded

3-Tier vs. Interchange Plus

Multiple income streams smashed into one account

Mid Qualified Charges

Non Qualified Charges

and finally...

Discount Rate and Per Transaction Fee

Know what you process, how you process, and look for overages. If you can't read your statement, get your merchant provider to explain it and the overages to you. After a while, they will starting popping out at you.

The Painful Truth About Signing Up...

2010-04-26T11:06:00.000-07:00

...Reprinted from 2007 by popular demand...

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? Because they make money by up-charging you the client. This is not always the case, just in 99.99999999% of all cases I have everseen. 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.

Cut Your Phone Bill With Wireless

2010-04-26T08:01:00.000-07:00

Now, this is sadly not a solution that works for everyone, but for those it does it's gangbusters.

When wireless first starting hitting the market, it had a limited niche. It was for trade show people and traveling salesmen. Later even contractors jumped in on the game as now they could get retail rates by taking the terminal to the client on site. However now there is a whole new list of retail clientele lining up to get wireless where you would have never thought.

Ever been to the mall?

Mall kiosks can be great business these days. I know of several people that have several each. They do well, but they have their own trials and tribulations as well. One such issue is the cost of a phone line. This particular customer happened to serendipitously mention that it cost him $60 a month just to run a phone line to his kiosk. That's $60 a month before any phone calls are made whatsoever. What's worse is he had family with kiosks in differing malls, some of whom had monthly phone rates as high as $75. We even saw one that paid (those with sensitive heart should leave the room...) $120+ a month before any calls were made.

Wireless is a good choice for these merchants as even though it's more expensive than a standard terminal due tom its $15 per month wireless fee and $0.05 extra per transaction, it saves bucket loads of cash for otherwise unnecessary expenditures.

The reason it even has the $15 a month wireless fee added as it is basically a credit card terminal with a cell phone Frankensteined in. The $15 pays for an unlimited cell phone plan. Before you ask, the answer is an emphatic "No". You cannot use this terminal to call home or order a pizza. It is an unlimited cell phone plan, but the only calls it makes is to the processor you work with. No one else.

I have to say, I always love it when a customer is overjoyed at the good news you have for them such as, "Besides all the other fees I am reducing, I am dropping your phone line costs down from $60 or more a month to $15."

I have been promised that they would dance at my wedding...

Paying for Someone Else's Coupon

2010-04-26T06:54:00.000-07:00

You clip a manufacturer's coupon for a $1 off a gallon bleach. You go to the store. You select the bleach which is $1.79 and take it with your coupon to the cashier who then subtracts the $1 and the new bill before tax is $0.79.

Who pays for the coupon? The store? No. They electronically capture all the coupons for the month and forward them to Johnson & Johnson or Proctor & Gamble or what have you. Then they get a check for the amount of the coupons that were offered by the manufacturer, and the process repeats. Not the circle of life Elton John sung about, but still the world goes on turning...

However the story changes completely if we change one thing. You go to the store, you buy whatever you buy with no coupons. You go to the cashier. You give them your Sky Miles card, Rewards card, Bonus back card, Cash back card (whatever) and give it to the cashier who rings you up. You get your sky miles, bonus points, cash back, whatever, the company who gave you the card gets all the glory, and who foots the bill? The card company right? After all its their card, kind of like going in their with their coupon right?

Wrong.

The business where you bought your groceries, gas, meal, clothes, crafts, insulin, business supplies and everything else just picked up the check. And they had no choice. If they take Visa and a customer goes in with a Visa rewards card of any type, it cost them substantially more money than if you had a regular card. Why is this? Why is the local burger joint where you go every Saturday about the crack of noon paying for your Delta Sky Miles? If you're using your Delta Sky Miles card shouldn't Delta be picking up the extra?

If you are a business beware. Better yet, be aware. Be aware of where your fees are going. This is not your merchant services group gouging the day lights out of you. It's the deals made with MC-Visa, Discover, and Amex. What's worse if you take Visa at your place of business, you CANNOT turn away a Visa Rewards card without running the risk of being delisted. Delisting means your merchant account just got cut and you can no longer accept credit cards. It is a damning process at best.

Be aware. Know that your business pays for someone else's coupon. Know that your Rewards card punishes businesses you like to shop at. Be aware that people are foolish and make bad decisions that look good for the present and are very bad for the future. We are continuing this trend of punishing businesses by now making Rewards debit cards. The cards that used to save businesses money will soon help tighten a stranglehold.

If you think this is OK, go back and look at the housing market over the last four years. Predatory lending was great for the people doing the lending, but a beast can only be beaten so many times before the back is broken. Forgive the ugly sentiment.

And forgive me for editorializing, but America's businesses have always been the ox that pulled us out of the mud. We can strangle them or reward them. One gets us out; the other drowns the ox with us.

Double-Tagged for Fees

2010-04-26T06:22:00.000-07:00

I apologize for my industry. A lot.

This is one of those cases...

I am with a customer and I am looking over what they are doing now; as in how they process and the fees they pay before I take it over. In the course of the conversation, the customer tells me about how they are paying a lease for a machine. I explain to them how this is unneccessary as there is a way to get a free machine [see: Terminals are Generally Free] if they will sign up for a minimum, which I know they will easily clear as I have already reviewed their monthly numbers. That's when they inform me they pay a minimum.

Let's review that a moment: (Lease) + (Minimum) = Fees Double Tag

How? Simple, but we have to understand the components.

Lease: A monthly fee for a specified term which pays for the usage of a credit card terminal which a business does not own. Example: $48 a month for a terminal for 48 months.

Free Placement Credit Card Terminal: A credit card terminal given to a business to use which the business does not own. Paid for by a Minimum set on the account which is garnered generally from fees that the business would pay anyway. Example: If a business does a $1,000 a month in credit cards, they would generate about $25 in fees for the processor. The processor then gives them a machine to use for the duration of the life of the business as long as the processor gets its $25 Minimum a month in fees.

Account Minimum: A base dollar amount guaranteed to the processor for the usage of a credit card terminal which a business does not own, and is gathered first from processing fees of the account. This generally works hand in hand with a Free Placement Credit Card Terminal to pay for its use.

Confused? Let me say it like this: a business needs one, or the other. Not both. A lease pays for a machine. A minimum pays for a machine. If a business pays for both, they are paying twice for the same thing. Imagine getting an electric bill and a power bill in the same month for the same service. If your business leases a machine, the machine is paid for via the lease. If you add a minimum, then you are guaranteeing you will give them money for a machine that is already paid for via the lease. If you have a Free Placement machine and they put a minimum on your account to cover it, AND try to add a lease, the lease would be there to pay for a paid machine.

Simple Rule: Minimum or a Lease. Not both. And a Minimum should get you the machine for free. Always get a free placement over a lease.

The reason there are all of these double tags is quite simply that the merchant company gets a bonus if you sign a minimum. If a business is doing $10k monthly, then they obviously do more than $1k a month required to get a free placement. However, the merchant company makes a lot more money if they sign you to a lease. The problem is people get greedy. They want both.

They shouldn't get it.

No Contract Term, No Cancellation Fee...

2010-04-23T13:37:00.000-07:00

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.

Terminals Are Generally Free

2010-04-23T12:48:00.000-07:00

Free.

That bears repeating: Free.

Why do I take the time to say it like that? Frankly, in my industry I setup two types of businesses. One is opening its doors for the first time and has never taken credit cards. The other has been open for years and has taken plastic for years. 95% of what I deal with is the latter. They are in business now, have a history of card usage, and unfortunately a history of over paying for their hardware.

One of the last businesses I have spoken to had a chain of 500+ stores and most of their machines were still on (all had been on at one time) a lease. The lease was for $48 a month per machine for 4 years. they could have gotten their machines for free, but instead they paid $26,736 a year or $106,944 over the course of the 4 year agreements when they could have gotten it for free.

How it works

First of all, almost any merchant service provider worth his salt (or her salt ladies) will get you the machine for your business for free if you process $1,000 monthly. They do this by giving you a monthly minimum that you must meet of $25. That does not mean you only have to process $25, it means the processor must earn $25 in fees. That means if you process $1,000 in a month you should have about $25 in fees more or less (as always it depends on your rates: higher rates earn the the fees more quickly, lower rates more slowly, ...but you knew this already didn't you?).

Now this is different from a lease in several key ways:

A lease is for a set period of time. Even if your business fails you have to keep paying a lease until your four years run out.
If you have a lease you pay for your terminal no matter how much you do a month. Seriously, if you have a lease of $48 a month and you process $5,000,000 a day; you will have to pay all the fees on the $5m + the $48 lease.
Most leases are non-cancelable. this is so that if you find a better merchant rate, your still stuck paying your old company for your lease.
Leases often have provisions stating that non-performance is not an option for cancellation.
Leases are often significantly higher per month than rentals, flat out purchases, free placements, or anything else.

The only real provisos I can mention here are these: First and foremost, does your company do $1,000 per month? Are you close? If so go for free placement, because unless you melt it down to slag, they will generally replace it free twice a year (ask your provider to make sure). This includes if you drop it, fry it via a lightning strike, or spill coffee on it. The second is: do you need more than one machine per location?Normally they will give you one for a $25 a onth minimum/ $1,000 a month in processing dollars, but most will only place a second one for free if you process $100k monthly. I know it doesn't make sense, but it's their ball game. Either way, most businesses need one and can get it.

Free.

What is Check 21? (Does that mean it can drink?)

2007-12-11T06:29:00.000-08:00

So more and more people are saying Check 21, but what does it mean?

Well it doesn't mean checks are legal now, but it does mean that they are all grown up. Known originally under several names such as the Check 21 Act or the Check Clearing for the 21st Century Act, or any one of a dozen other names that did not launch; Check 21 was signed into law by Bush on Oct. 28, 2003 and launched exactly one year later in 2004. It allowed for a paper 'substitute check' to be the legal equivalent of the original. However since then the second clone check which was greatly speeding up the process and was being used for presentment and returns has had it's paper buttocks been dumped like a girlfriend after graduation. This is because the speed and usefulness of the scenario has led to the ability to simply have the check's image. Not a second paper check, but a second digital check in image or soft copy only. That's why more and more people do not get their check's back at the end of the month, but a copy of the check on the back of their statement. The amount of money this saves in paper alone is astounding, but what it really has been doing goes sight unseen.

First of all, with the faster clearing of checks, fraud has been dropping like a... (insert some plummeting mental image here). Secondly, there are less issues with the fact that one no longer has to transport the check physically, but if the image is bad the original bank is able to resend and correct the data. However, the biggest impact this has on the individual depositor is this and this alone: extended deposit deadlines. Haven't you been wondering why you don't have to have the check in the bank by 2:00 o'clock anymore? Well the faster clearing times, and the ease of presentment and representment have made the deposit time not such a factor anymore.

All in all, what Check 21 means is that the modern check has had a digital face-lift. That process is easing tensions on a lot of us, speeding up the process, eliminating a lot of costs, making banks more green, and in the end, continuing to provide a real niche for checks in the modern world.

There's only one drawback: I don't get the same float I used to...

Wireless Can Mean More Money

2007-12-10T08:21:00.001-08:00

What used to be a very expensive and more difficult option is really starting to wade into the deeper areas of the pool. A couple of years ago, wireless had about 10% of new shipment revenue, whereas today it commands about 30%. Why the jump?

Cost
Cost has helped. It has gone down precipitously and many groups that offer their sales teams and MLS's free terminal options, now are offering free wireless terminal options as well. This evening of the playing field helps move what used to be a beast in a niche market to a streamlined trick pony that can do multiple sets of chores.

Technology
Simply put, the machine is more advanced than it was back in the day. Basically these guys are normal terminals + a battery + a cell phone. The battery is charged daily by plugging it in at night and going home. The cell phone half works on either GPRS or CDMA formats that deliver Internet Protocol (IP) connectivity to merchants that can put it to good use. Some have Wi-Fi options as well, but most importantly, Pinocchio's strings are cut in both instances, and yet he is still dancing.

Safety
Along with the IP ability, merchants are also getting their security needs met. This is done through SSL or the industry's standard for safety in a Secure Socket Layer allowing them secure transactions though encryption on both public and private networks.

Sprint
Sprint was the first wireless carrier to put a cellular base station in one's business or home. This not only helps the wireless advance, but is clearly showing a demand for the technology. In all fairness though, that technology has been around for a while. It's called a repeater. Ever been to Vegas? In Vegas I get five bars on my Sprint phone. Odd, as I can't get five bars if I am standing at the counter of a Sprint store. In Vegas, in a casino, I can be at the bottom of a lead-lined vault and get all five bars. Repeat after me... Repeater.

I consult for businesses all the time and I often suggest wireless. Here in Savannah, Georgia's historic district we have the Savannah River and all the shops a tourist could want. On first Saturday's many of those shops set up booths so that people do not need to come in, but simply walk through and hopefully purchase. Many of these merchants have moved to wireless as they can walk right out their door with no strings attached and sign up right there. Same goes for the guys that have to go to trade show floors. They take a wireless with them and as long as they can get a signal or a Wi-Fi, they're in business.

Contactless Makes Contact

2007-12-07T10:38:00.001-08:00

One credit card to beam up, Scottie.

Yes, the future is here, kind of. But it will take a little while for us all to catch up making it really sometime in the ...well, future.

Just what is Mr. Black talking about today? Contactless systems and they are available now. These do not require your customers to actually swipe their card and this is part of a long progression. First you had the old knuckle-buster where one would put the card in, lay over it a receipt and carbon copies built in, and manually run the card over. Then came the old black box terminals. You hand the card to the cashier, they swipe it, and hand it back. However with fraud on the rise and the presence of credit card processing software and even the gateways and their advances and woes, the terminal had to buck up and get with the program.

First what they did is started making self checkout kiosks which are especially popular in supermarkets. No longer does one hand a credit card over, but they swipe it themselves. Next was simply contactless. This means that the customer no longer swipes the card but waves it in front of the contactless reader and the reader 'pulls' the information like Luke Skywalker desperately trying to reach is lightsaber which has been conveniently thrown just out of reach.

Pros
Here's what I like about this. First of all, it's pretty neat. The gear is all very Star Trekkie and looks good on the counter. This is good for business especially for smaller businesses because people like shiny, new things. When they see something of this nature it gives one's business more credibility as the customer assumes you have a larger infrastructure in place whether you do or don't. Not to mention, it has a small footprint leaving your business more counter space.

Best of all, it preserves the credit card. Cards these days simply cannot take the strain that once they could. This is because they are used multiple times a day instead of once a week, and they are coming apart at the seams after the first year. It's not because they're cheaper, but it's like a football player with a bad knee. The player is healthy. Heck, the knee is still healthy. It just cannot take the continual strain of burst speed runs carrying a 250 lb. man for on and off intervals over a two hour period. Like Indiana Jones once said, "It's not the years, it's the mileage..."

Cons
We ain't there yet, Skipper. The real problem here is that this really requires a contactless card. This means a card that has a smart chip in it. Some do today, more will have it in six months, and in two years it should be on the way of a pandemic. Fortunately what will boost smart chip style cards which in turn will push contactless ability is the fraud issue. Smart chip cards carry data on them which makes them safer and often has more and more of the customer's data held on it in a highly encrypted little vault making forgery very difficult.

In fact, we should all be looking towards the day when you swipe your card, and your name and picture pops up on a screen at the business where you are making the purchase. I think that will be just before we get the flying cars and his boy Elroy has an automatic dog walker for Astro.

But it's coming.

Discover Changes With Your Merchant Account

2007-12-07T07:21:00.000-08:00

OK, some good news for all of you that keep saying I'm all doom and gloom. Sadly in this industry, it will often seem as if I am because of all the issues out there to be faced. At least I am trying to do something about it, so don't judge me. You should be sending me birthday cards instead.

Discover has now changed it business model. Formerly, when one wanted to accept credit cards, They would get MC and Visa, then opt for Discover and/or American Express. The problem is that though they could negotiate low fees for MC and Visa. They could not do so for Discover and Amex. In fact those two set their own individual prices, which were non negotiable, and they were very high for industry standards. The main reason Discover was always so high was that it was a cash back card that paid the card holder a bonus to incentivize them to always use that card. Well someone has to foot the bill and it's always the merchant (for more painful truths on this read about Rewards Cards).

Well with all the changes in the cards out there and everyone getting rewards back one way or another, Discover just about got priced right out of the industry. What to do? Become a third link in the MasterCard/Visa chain. They dropped their rates to be the same as the main two and even if you already take Discover your rates have recently dropped. However, don't take that on faith. Pull a merchant statement from last month. If you do not see Discover's rates in line with MC-Visa, call your MSP (merchant service provider) and tell them that they will drop your Discover rate to MC-Visa levels, or you will find someone who will.

Beware the Buyout

2007-12-07T06:58:00.000-08:00

In your merchant account agreement there is an option for you to cancel your contract before its due date and there is no fee of course, right? Of course there is! This ain't the March of Dimes, baby. You want out early, you pay them. It's part of the convenience principle which means to make it easier it costs you more.

Take care. There are many groups out there that will say they will buyout your cancel option (they will pay whatever fee is charged). This may be true and it may be bogus. Unfortunately I hear of too many cases where it is bogus. As for the ones who will pay the fee, do not expect this unless you are doing some kind of great numbers every month.

Now for those that say they will and do not, there are plenty.There is an industry magazine that I do not suggest you read. If you are not in the industry and attempt to read this periodical, you will spontaneously hemorrhage from your eyes out of boredom. We who are in the business are inoculated against this, but the reading still hurts. Anyhoo... There are often cases cited where some group said they would pay the fee for the customer and never did. Unfortunately, this leaves the customer with two sets of bills every month and not a lot to do about it. It is a big industry no-no, and legal clamps can come down upon them for doing so. The problem is that those clamps take far and long to activate and they have to have done it to a bunch of customers.

In the end, just be very wary of such an offer, especially if you are not doing a lot of credit card sales each and every month.

QuickBooks Can Mean Quick Mistakes

2007-12-07T06:24:00.000-08:00

No, no, this is not another doom and gloom article. However its is a "You better have your eyes open" article. I have no real beef with QuickBooks. As a whole I think it is a fine product, it just has a major issue when it comes to credit card use on your merchant account. Namely, if you have QuickBooks with a merchant account, and you run a credit card on it, you're fine as long as you NEVER have a declined card.

OK, so that's not the end of the article. I would like to be able to leave you just with that single tidbit, but I guess it needs some explaining. You see QuickBooks is a little over eager. If you run a credit card, it posts the sale to your ledger. Now here's the rub: it posts it whether or not it was accepted or declined as if it were accepted. Now I do not know about you, but here in the business world, the real business world, cards get declined, and that right often. If every time I got a decline card my ledger balance falsely stated that I had the money, my business would bounce more checks than I would know what to do with.

All in all, QuickBooks is still not a bad deal, and is a competent product. However, until such time that it is fixed, I would not use it with a merchant account. I would have a merchant account that is not automatically tied to it and manually post entries.

Is Paypal Your Pal?

2007-12-03T10:54:00.000-08:00

Where to start, where to start?

This is really such a topic as I could give real meat and sustenance for days. Rather than do that let's just jump in and hit some of the basic points. Please do not raise your hands if you have any questions. This is a blog so I couldn't see them any way...

Rates
Seriously, Paypal's rates are through the roof. Unless you merely have a personal account which is highly limiting, getting paid through Paypal starts at a 1.9% Discount Rate and a $0.30 per transaction fee. That's if your customer pays you with a Paypal Balance. If they use a credit card your Discount Rate shoots to 4.9%. 4.9? If any of you are used to reading my blog, then you would know that I wouldn't pay 4.9% to keep my mother out of the hospital. OK, maybe Mom because of all those times I was sick, but Dad would have to fend for himself.

Security
What security? They are plagued by spam and phishers and all of them are better at it by the day. Not to mention the fact that the biggest thing you are not secure from is Paypal themselves. Paypal can retroactively go back and yank money from your account. They become judge, jury, and profitability executioner in all matters and there is no arguing. In fact, their Terms of Service basically says that you waive all rights to credit card consumer protection laws. Here's an example: a chargeback. A Charge back is when you say there is a fraudulent charge on your credit card. If you do this, Paypal can terminate your account.

Account Freezes
This is part of the last discussion, but it's a really big issue. Again they make themselves the only deciding factor and can terminate or freeze your account (and the money) for almost nothing and hold it indefinitely.

There is so much to discuss here that several avenues should be looked at. One is to go online and look at some of the resources such as NoPaypal.com which has been used by government agencies such as the NY Attorney General's office for evaluating complaints against unfair Paypal practices. They have an entire forum of people that discuss the issues. However, they and I warn that some of the language is very emotionally based and therefore gets rather colorful. But then, it does deal with people's money.

Another is to get the book the Paypal Wars. They go so in depth on this issue that once you're convinced to not use Paypal, the only reason to read the book is to see how bad it really is. Kind of like rubber-necking at your local car wreck.

Gift Cards: The Gift That Keeps on Giving

2007-11-26T11:50:00.000-08:00

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?

2007-11-23T09:41:00.001-08:00

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

2007-11-19T07:38:00.000-08:00

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

2007-11-19T07:10:00.000-08:00

"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

2007-11-13T11:13:00.000-08:00

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?

2007-11-12T13:02:00.000-08:00

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

2007-11-12T12:30:00.000-08:00

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...

2007-11-12T11:57:00.003-08:00

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?

2007-11-12T11:57:00.001-08:00

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?

2007-11-12T11:56:00.000-08:00

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...

2007-11-12T11:55:00.000-08:00

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

2007-11-12T11:52:00.000-08:00

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...

2007-11-12T11:51:00.000-08:00

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?

2007-11-12T11:47:00.000-08:00

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...

2007-11-12T11:43:00.000-08:00

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?!

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.

Why You Sould Read this for Your Business...

2007-11-12T11:37:00.000-08:00

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...