Quantcast
Jump to content

Recommended Posts

Posted

I get the daily calls of wanting me to switch CC processors and with MUCH (misplaced) confidence, I refused to have a discussion with any of these guys, because I already had great rates.   Then, I had a persistent one call me back and ask why I didn't want to talk.  She said enough right things that I let the salesman come visit me.  

My rates were and supposedly were going to get better over time as I built up history.  Original Quote:

  • Credit Card Rate - 0.05% + Interchange (AMEX 0.055%)
  • Debit Card Rate - 0.05% + Interchange
  • Credit Transaction fee - 0.05 cents per transaction
  • Debit Transaction Fee - 0.05 cents per transaction
  • PCI Compliance-$9.95/monthly
  • Chargeback fee-$10.00 (VISA, MC, Discover) $30.00 (AMEX)
  • Paper Statement-$5.95 monthly (online statements free)

The other guy comes in and tells me that my current processor increased my rates and added numerous junk fees.    The rate raised to 0.25% for most cards and .75% for AMEX and now have a $34.95 platform fee and numerous other fees.   At this point, I stand to save $250/month minimum by switching CC vendors.     I did confirm that on day 1, my bills had way fewer fees.  The bills also stated that they were raising rates along the way, so they were disclosed and allowed by contract.  I'm halfway thru a 3 year contract with a $495 cancellation fee.   This is what I'm paying now with the same processor: 

  • Credit Card Rate - 0.25% + Interchange (AMEX 0.75%)
  • Debit Card Rate - 0.05% + Interchange
  • Credit Transaction fee - 0.05 cents per transaction
  • Debit Transaction Fee - 0.05 cents per transaction
  • PCI Compliance-$9.95/monthly
  • Annual PCI Audit Fee - $99
  • Chargeback fee-$10.00 (VISA, MC, Discover) $30.00 (AMEX)
  • Paper Statement-$5.95 monthly (online statements free)
  • New Junk Fees - $41
  • To be clear, the interchange fees don't change on either deal.  We are only dealing with CC processor markup fees and junk fees.   The 0.05% is a markup fee over interchange.   

The new deal is:

  • Credit Card Rate - 0.05% + Interchange (all cards including AMEX)
  • Debit Card Rate - 0.00% + Interchange
  • Credit Transaction fee - 0.05 cents per transaction
  • Debit Transaction Fee - 0.05 cents per transaction
  • PCI Compliance - $0 (with a successful audit and $9.95/month penalty without one)
  • Annual PCI audit fee - ??
  • Chargeback fees - $25.00 (VISA, MC, Discover, AMEX) - refundable if you win
  • Monthly Charge - $10.00

As best I can tell, it looks legitimate.   I'll be carefully reading the new contract tomorrow.   So, the real question is whether or not I'm switching from one liar to another liar?     This second one is telling me that my contract will have the rates guaranteed and locked in.   If I see the right things in writing, I'll be switching.  Will recoup my cancellation / startup costs in 3 months.

I guess the moral is get an annual checkup from a competitor. 

Supposedly these rates are available as a result of being low-risk from my transaction history (or it's just marketing-speak).  I don't know.    My original deal was reasonable, but it isn't any longer.   My plans were to wait for the 3 year contract to end before shopping around.

  • 2 weeks later...
Posted

I think credit card processing is becoming highly competitive.  Your situation sounds exactly like mine, I was paying 0.25% and I just signed up with a new processor at 0.05%.  My new processor seems to be signing up everyone in town and I think there is a mad rush to be the first to sign people up at this new rate so that if they are making less per customer, at least they'll have more customers to offset this loss.  One thing I will say is that I won't sign a contract.  Obviously you have to sign up for the service but my rate is locked in as long as I stay with them and I can get out anytime without a penalty.  Also, it may not matter to some people but I much prefer the PAX S80 to the VeriFone  VX520.

Posted

I sure wish you would share the names of these companies. The bottom line after every fee adds up to a little over 2% for me. I tried changing but always get lied to. One guy even forged my name on a document and I had to turn him in to the state attorney general to get out of it. If your total fees are less than 1% then I'm all ears. That's alot of money.

Posted

Sorry for the confusion.  Total fees will never be lower than around 1.80% as you have to pay the mandatory interchange fee.  The .05% we're talking about is the fee the processor charges on top of the interchange.  I'm not sure if naming the company I'm now using breaks any forum rules but I wouldn't yet anyway.  I haven't been using them a month yet and we'll see if reality stacks up to the sales pitch.

Posted

My old processor was First Data.   This new one is Capital Bankcard as an agent to Paysafe.   Most of these processors appear to be "little guys" reselling for the big guys and they do markups & fees to make their money.  I had to sign a PaySafe Mechant Services agreement.

I just signed up this week, so we'll see if they live up to their promises.   They claim that I can trust them because we have no term contract and the cancellation fee is $0.   Last month I was about 1.8% in fees and if I was at the new fee structure, about 1.5%.   These percentages are Interchange and Fees.   I paid $180 for the keypad and they are loaning me an FD-130 terminal.   My existing keypad cannot be reused due to encryption.  So, I now have 2 FD-130's and 1 remote keypad.  Next, I have to pay the $495 cancellation fee to First Data.

As an addendum to my first post:  The annual PCI audit fee is $149 (so this one went up)

Posted

Okay. Mine is through my bank. Amex is the same rate as Visa mc and the money is there the next day. When I figure out the percentage each month it's about 2 to 2.2 percent. Sometime a little lower so I guess I'm in the ballpark. I've given myself the nickname Pay-the-most-Paul because I've been too trusting. Now I'm paranoid Paul.

Posted

Hey, you and me both.  That's why I shared.  I was being overcharged and possibly lied to ("we can probably lower your rates as you build more volume").   Frankly, it's difficult to read those statements.   I'm just starting to better understand them.   The layout that I presented above is a good way to compare apples to apples.   Maybe have your bank help you create your fee structure and then you can compare.  

Be aware that your mix of debit vs credit card vs reward card vs fleet card will really change up the Interchange fees.  So, I could be 1.5% with mostly debit and you can be 2.0% with mostly AMEX and we can have the same fee structure.  This table is just looking at fees, knowing that interchange is the same for all of us.

My CC mix for 2019 YTD is:   Debit Count: 39.9%  CC Count: 54.0%   Cash Count:  6.1%    Debit Volume:  35.7%  CC Volume:  60.5%  Cash Volume:  3.8%    All Fees for 2019 YTD:  1.8% (up from 1.7% for last year)

  • 2 months later...
Posted
23 hours ago, tco said:

What exactly are the costs to the merchant and to the customer?

For credit cards: Merchant pays zero credit card fees, the customer pays 3.5%  
For debit cards:  Merchant pays 1% + $0.25/authorization, the customer pays 0 fees

 

As a consumer, this is a non-starter for me.   As a business owner, I would not be charging my customers 3.5%, but would absorb this cost as we do today.     Now, my credit card costs have just risen.   I don't see this as a positive. 

Posted

3.5% is exorbitant.  If you chose to go this way it would be better to charge a 2% credit card fee on the RO just like hazardous materials and shop supplies.

  • 4 years later...
Posted (edited)
2 hours ago, DUFRESNES said:

1st of all, we all get the phone calls daily.  Our newest answer has declined immensely the calls is "We don't take Credit cards"  I still have a hard time charging the customer for the fees.  We do approx  $110,000 a month in credit cards.  The merchant we have now is Heartland.  We had him and then Key bank came in and promised us much lower fees.  So fired the Heartland and went with key bank.  Well, it wasn't what they promised by the time you added all the fees extra.  I called my Heartland guy again and said I wanted to come back to Heartland.  He did.  I did.  You have to take into consideration Customer Service and the total bill including all the fees and extras.

Things are constantly changing over time when it comes to payment.  Who pays by cash or check anymore?  Few, if any.  99% of our invoices were paid with plastic.  Because we were a transmission repair shop, our average sale was over $1.5K.  We shopped around at first but finally settled on a company that charged us .5%.  (I can't remember who.) With the annual volume we were doing, that still worked out to about $500/mo.

Edited by Transmission Repair
Added a sentence.
Posted (edited)
1 hour ago, DUFRESNES said:

How can that be on 1.5 million .  We pay 2500 -3000 a month

That was about 10 years ago before we sold our shop and retired.  We are doing similar figures in plastic sales.  We were grossing about $1.3-$1.2 million a year in sales in the last 3 years we were in business.  $1.5 million with our processor would be about $7.5K/yr.  You're paying what works out to about 2% while we were only paying half of 1%.

$2,500/mo. X 12 = $30K.   $30K divided by $1.5 million = 2%.  I would think you are paying a higher rate because your average sale is much smaller and more numerous than ours.  We only wrote about 80-90 tickets a month, but they were often really big tickets.  Perhaps things have changed in the last 8 years since we sold our shop, I don't know.  But judging from Bantar's posts from 2018 at the beginning of the thread, he was paying even less.

 

Edited by Transmission Repair
Added sentence at the end.
Posted

In an attempt to understand this junk fee ridden business, I did quite a bit of analysis.  In the end, I found that the Interchange fees are the biggest factor.   They will eat, let's say about 1.5% and rising.   Can't duck or hide from these fees.  The CC Processor will then tack on an addon to pay for their services.  This can range from a low of about .20% to 1% or more.   This is the fee that you want to manage.  Now, just like us, if you have a provider that is giving you good service, it might be worth a few more pennies.

To further add to the Interchange fees, I found that my fees went up and down with the mix of Debit to Credit cards.   Debit cards are practically free and CC's are costly.   Usage depends on your customer mix.   This can't be controlled.   It's builtin to our labor rate.  Charging the customer for using their CC leaves a sour taste, so most people don't do this.   It doesn't make for good repeat business.

Once I grasped this, I've ceased the detailed tracking and analysis of my CC's.    I'm lightly tracking now....  For the past 11 months, I've had a low of 1.32% and a high of 2.08%.   The average for the last 11 months has been 1.83%

What is interesting is that the low was on a big month.  Must have had many debit card transactions that month.  My current processor 360 Payments, does not show debit vs credit transaction counts, so this is just a guess.

Posted
43 minutes ago, bantar said:

In an attempt to understand this junk fee ridden business, I did quite a bit of analysis.  In the end, I found that the Interchange fees are the biggest factor.   They will eat, let's say about 1.5% and rising.   Can't duck or hide from these fees.  The CC Processor will then tack on an addon to pay for their services.  This can range from a low of about .20% to 1% or more.   This is the fee that you want to manage.  Now, just like us, if you have a provider that is giving you good service, it might be worth a few more pennies.

To further add to the Interchange fees, I found that my fees went up and down with the mix of Debit to Credit cards.   Debit cards are practically free and CC's are costly.   Usage depends on your customer mix.   This can't be controlled.   It's builtin to our labor rate.  Charging the customer for using their CC leaves a sour taste, so most people don't do this.   It doesn't make for good repeat business.

Once I grasped this, I've ceased the detailed tracking and analysis of my CC's.    I'm lightly tracking now....  For the past 11 months, I've had a low of 1.32% and a high of 2.08%.   The average for the last 11 months has been 1.83%

What is interesting is that the low was on a big month.  Must have had many debit card transactions that month.  My current processor 360 Payments, does not show debit vs credit transaction counts, so this is just a guess.

I would trust your research a lot more than my 8-year-old dated experience.  Using your 1.83% figure, we would have been paying about $1982.50 per month.  Charging extra for plastic goes against the written merchant agreement.  I believe you have the best idea for covering the cost in the shop labor rate.  Good job on the research! Thank you.

Posted (edited)

large.PropertyTaxFees.jpg.a528264f9efcaaaa83c588b7b1d0bd91.jpg

21 hours ago, Transmission Repair said:

Charging extra for plastic goes against the written merchant agreement.

Well, I guess I'm wrong about charging extra for plastic.  We recently received our property tax notice and they charge extra for paying our property tax with plastic.  They call them "bank fees" and charge 2.45% for credit cards and 1% for debit cards.

Edited by Transmission Repair
Added property tax notice.
Posted
1 hour ago, Waynes Garage said:

What about shop supplies, if you charge them, if you see fit, to raise it by 1 - 2 % to cover cc fees?

This is a quote of mine from another post I made...

There were several items I "buried" in either parts, labor, or both because listing them separately would raise eyebrows.  Items like...

  • Shop supplies
  • Waste oil disposal
  • Towing (because we advertised free towing)
  • Chemicals
  • Gas in customer's cars
  • Credit/Debit card fees
  • and other incidentals...

were never listed separately, but the customer did pay.  I never had a problem doing it that way."

Posted

I have a great processing company that charges a flat fee of 2-2.25% (depending on monthly volume) so it’s really easy to keep track of. We used to have interchange plus and it was really confusing to make out what was being charged for what. No cancellation fee and a reasonable annual PCI charge if you do the periodic compliance surveys. Don’t know what the rules are but I’m happy to share their contact info. 

  • Like 1
  • 2 weeks later...

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Available Subscriptions

  • Have you checked out Joe's Latest Blog?

         0 comments
      The Technician Shortage Is Our Fault, And It's Time We Own It
      Nearly every day, I hear shop owners complain: "There's a technician shortage. We can't find qualified people. There's no one out there." If that's true, then who's to blame?
      The industry? The schools? The government? I don't know how you feel, but who promised us an endless supply of qualified technicians?
      Another common complaint is that young people do not want to work in the trades. Well, if that were true, then why are other trades such as HVAC, electrical, and plumbing growing? What are they doing that the automotive industry is not? 
      Here's the reality we need to face: We do have a problem, but we shouldn't look for someone or any entity to rescue us. Not the government. Not the trade schools. Not the recruiting companies. No one owes us a workforce. If we want great people in our industry, it's up to us. At some point, we need to own up to the truth: Building a pipeline of qualified technicians is our responsibility.
      In this blog article, I will break down the key reasons we are in this situation today and what we, as an industry, can do to solve the technician shortage. Are you ready to look in the mirror?
      Have We Pushed Technicians Away?
      Let's take a look at flat-rate pay. True flat rate, which pays a technician only for the hours they produce, is a controversial pay plan that emphasizes high production levels and creates a competitive work environment that, if not properly controlled, can lead to increased mistakes and a decline in morale and team spirit. Additionally, the stress and physical demands placed on technicians as they age are not favorable to long-term employee retention. What do we do with technicians as they grow older into their fifties and begin to slow down? 
      I have heard all the arguments and pros and cons of flat-rate pay, and I am not going to judge any pay plan. Let the facts speak for themselves. True flat rate has changed in most areas around the country and has evolved into a pay plan that gives technicians some pay guarantee.
      Many shop owners have learned that team morale, along with the opportunity to earn income, is important to technicians and to the company's long-term success. But let me ask you: how many technicians have left or been pushed out over the years because of the old flat-rate pay system?
      Another issue is the workplace environment. I remember being grateful to be hired as a young technician at a local repair shop. While very thankful, the work environment was not ideal. The shop owner kept the bay doors open year-round (I am from New York) unless it rained or snowed. He felt that if the bay doors were closed, customers might think we were closed for business. We had no heat and no hot water. Many of the jobs were done outside, year-round,  in all types of weather. The starting pay was minimum wage, with no benefits, sick days, or vacation pay. 
      Now, again, I need to point out that I was truly grateful for the opportunity this shop owner gave me. I learned a lot working there, and the experience was pivotal in my career. But looking back, I wonder how many people were discouraged by these working conditions?
      While the physical demands of the repair workplace are daunting, perhaps even more critical is the culture. Too many of my generation shop owners preached the mindset of "my way or the highway." We were the business owners, after all. We started our companies, took all the risks, and provided jobs. Why shouldn't we be the ones to set the ground rules our way?   
      Many of us found over the years that the "my way or the highway" mentality was a sure way to isolate employees and make them more likely to look over the fence for greener grass. In other words, it led many technicians to seek employment elsewhere, where they felt they could be appreciated and recognized for their hard work. The issue, however, was that there wasn't much green grass around. Disappointment after disappointment, bouncing from repair to repair shop, eventually led to despair. So, I ask you: were workplace conditions a contributing factor in today's technician shortage?
      Another factor that we are all well aware of is the complexity of the modern automobile. When I started, the work was mostly physical, and you were required to master essentially three vehicle models: General Motors, Ford, and Chrysler. Let's fast-forward to today. The evolution of automotive technology, along with the extensive training and tools required, has outpaced the typical technician's pay compensation, with no clear career path. Again, leading to frustration and insecurity about the future.
      Here is the bottom line: people don't leave their job; they leave their experience. We must do a better job. 
      The News Isn't all Bad; Your Next Steps to Fix the Technician Shortage
      To fix the technician shortage, it will take a combined effort from everyone in the automotive industry, particularly automotive shop owners. Shop owners are in the perfect position to make the greatest impact, not only on their businesses but also on the future automotive workforce.
      First, shop owners must become better leaders and understand that their ultimate success is directly dependent on the people they assemble around them. Any shop owner who mistakenly believes they can build an empire solely on their abilities is destined for serious disappointment. Business owners who think like this will eventually plateau. Without the collective contributions from a team of qualified people, your business will stall; it will not continue to grow.
      Create a workplace that attracts top talent: a clean, professional, well-equipped facility designed to support productivity, teamwork, and a career, not just a job. Build a great reputation in your community by getting involved locally. Become the auto repair shop that people take notice of as "the" place to work.
      Next, shop owners must become more financially knowledgeable. Knowing your numbers and what you need to achieve for a strong bottom-line profit is essential to paying technicians the money they need and deserve. Profit will also allow you to compete with other trade industries by providing a benefits package that has real take-home value and security.
      When it comes to culture, this is where the rubber hits the road. People crave recognition, praise, and a sense of purpose. Despite what you hear, people are not just money-motivated. Once people feel secure in their financial situation, retaining and motivating technicians can only be achieved by connecting with them on an emotional level. You cannot show enough appreciation. Give out praise for a job well done as if your business depended on it, because it does.
      As technicians age, we need to have a place for them. Expecting a 58-year-old to perform like a 35-year-old is unrealistic. We need to be more focused on career pathing. Provide training, skill development, and coaching to develop leaders and mentors within our older workforce. While their bodies may have slowed, the knowledge they have gained is priceless. 
      Our future is dependent on young people entering our industry. We need to give more young people opportunities. Every shop owner across the country should consider hiring an apprentice, then build an apprentice training plan and career path for them. If every shop did this, we could solve the technician shortage within five years. Get involved with the trade schools and high schools in your area. Look into the NAPA Apprenticeship Program. Don't sit on your hands with this one. Do it today.
      Lastly, don't get left behind. Commit to ongoing training for all your employees. Keep up to date with tools and equipment tailored to your business model. Don't try to be all things to all people and all vehicles. Identify your core profile customer and the vehicles they drive, and become an expert on those vehicles and the services you offer.
  • Similar Topics



  • Our Sponsors

×
×
  • Create New...