The Spring Surge....NEW CREDIT CARD PROCESSING REPS...YUK!!!

Well, spring is approaching and the flowers will be blooming and all the dormant life will be springing back to life…..aaannnddd, if you’re in business, you’re going to start seeing “new life” coming forth in the form of credit card processing reps. Yep, that’s right, especially here in the Midwest and eastern states when the weather warms, even slightly, we see a new hiring frenzy in the merchant services industry.


You see, this industry has the potential to make for a very lucrative career for the successful rep. However, not many people have a burning desire to be out knocking on doors in sub zero temps and slop and slush oozing into their shoes. So, come spring time, we see a lot of adds enticing sales reps to apply. Unfortunately, the way it goes is typically, those that do get hired, receive maybe a half day or so of training, usually done in some hotel conference room. Then the trainer (sales manager) sends them to the street with their “pitch” or "deal-du-jour". They’ll attempt to entice you with what sounds like the lowest rates you’ve ever heard of. If you show even the slightest bit of interest, since they are new, they are encouraged to get the manager on the phone. It’s the typical TO (Turn Over), to the more knowledgeable (maybe???) experienced guy. Their whole motivation is to get you to sign on the spot….DON’T DO IT! Even if what they offer does, on the surface, seem to be a better deal than you are currently paying, take your time to really dig into it before making any decisions.

Usually what happens is that you will see a noticeable increase in sales calls from merchant services reps whether it be thru your door or on the phone. The biggest majority of these “newbies” don’t make it much past a couple months, if that long. It’s a very tough and competitive business and most business owners get so fed up with it that they rarely give any of them the time of day. Consequently, after a while, the faint of heart, or those that have their feelings hurt easily, decide to give up and seek out some other form of employment. They just can’t take all the rejection. Then, the same company will hire and “train” (if you want to call it that) a new batch and send ‘em to the wolves (uh, that would be you...the merchant). I can pretty much guarantee that if you were to simply collect business cards from every one that calls on you, you’ll see numerous different reps from the same company calling on you.

So, what’s the purpose of this article anyway? Well, I guess it’s simply this. I’ve been in this business for a lot of years and, quite frankly, I’m still doing business with merchants that I originally signed up over ten years ago. Why? Because I have demonstrated to them that I am interested in the mutually rewarding long-term relationship, not simply “getting the deal”. That’s what you should be most interested in too. How close of a relationship do you have with your current rep/provider? Do you see them on a fairly regular basis? Have they been willing to answer any questions you have about any of your fees? Are they responsive to you and your needs? If you can answer “Yes” to those questions, then don’t bother looking elsewhere. Every provider out there has the exact same cost basis since all the Interchange Rates are set by Visa and Mastercard. The only difference from one to the other is how much they feel they can make off of you and there is, quite frankly, no controls in the industry….yet, that is. So, if you have a good individual that you are currently working with, make an appointment to sit down with them and go over all your numbers and hey, while you’re at it, ask for a rate reduction. It will be time well spent….I promise you

Another thing that I have always strived to do with my merchants is to work with them to control their costs for accepting plastic in any way we can. In addition, I have also shown them numerous ways to help increase their sales creatively by utilizing gift cards, capturing customer’s emails for future marketing and social media marketing as well, especially of late by using Mobile Text Marketing.

Look, the bottom line here is, spring has sprung and if you’re like most businesses across this great country of ours, you’ll soon be seeing increased traffic and business. Don’t let this seasonal surge in credit card reps distract you from your main focus. Take the time to get a review from your current provider before it gets real busy or, seek me out if you feel that I may be of service to you. I wish you great success in 2011 and beyond. Don’t be afraid to think outside the box a bit going forward

Do You Understand Your Merchant Services Statement?

Each month, you receive your monthly credit card processing statement from business transacted during the previous month. Of course, when it comes in the mail, you’re anxious to open it up and see all the money you made, aren’t you? Yah right…if you open it at all, you simply cringe at all the charges that have been taken away from your sales. But hey, it is a privilege you know to accept credit cards and pay all those fees….aren’t you thrilled?

Okay, let’s be honest here for a minute. If you weren’t accepting plastic as payment for the goods and services that you sell, you would most certainly be missing out on potential business. So, with that said, let’s just accept the necessity of it all and move on to better understanding what you’re paying for. How does that sound to you?

When I was active in the field, I found that frequently while marketing my services, merchants would hand me their unopened statements with which to do an analysis for them. When presented with a sealed envelope I would always ask if this was an unusual situation or did they simply never look at them. Unfortunately, the latter answer seemed to be the one most often received. Believe me, I understand why this is so because all too often, these darn things are downright complicated.

All right, let me scold you that fall into this category just a bit here. You absolutely must start opening and, more importantly, understanding, these things immediately. So let me see if I can break them down a bit for you here to make the process a bit easier. Most of them are broken down into several categories as follows:

• IMPORTANT NOTICES OR STATEMENT NOTIFICATIONS

Typically, this will be on the first page and will be where your provider will alert you to any changes to your statement such as pricing information changes, industry news. To me, this is one of the most important sections to always READ THOROUGHLY. This is especially important in the months just prior to April and October each year. In each of these two months, Visa and MasterCard adjust interchange rates which have a direct impact on your pricing. So, always be sure to be alert and get answers to anything you see posted there.

• TRANSACTION SUMMARY

In this section, you will typically see a total breakdown by card type of the number of transactions and total dollar volume for each. This is a good place to do a quick analysis to see what your average ticket is on plastic. Simply take your total volume divided by the total number of transactions and there you have it.

• CARD FEE SUMMARY

Not all processors will use the same terminology but, in this section, especially if you are on a tiered pricing structure, you will see a breakdown of total volume/transactions for each tier type like Qualified, Mid-Qualified, Non-Qualified or 1st, 2nd, 3rd, 4th Tier pricing. You’ll see the rate and per item fees listed. If you’re in a Cost Plus pricing model, this section will be much longer, and more revealing as it lists each card and transaction type with appropriate fees.

• DAILY DEPOSIT DETAILS

This section could take up numerous pages and really doesn’t warrant a thorough analysis on your part. It is simply a display of your daily batches per terminal and the numbers you see here, should match up with deposits made to your bank within 48 hours of each batch. If you see any descrepancies, contact your provider.

• SUMMARY OF ALL FEES

This is the section that gives you a great analysis of what you’re REALLY PAYING for this privilege of accepting credit cards. Here you will find totals for Batch Fees, Debit Access Fees, Statement Fees, Merchant Advantage Fees, Equipment/Supplies Fees, PCI FEES, Monthly Service Fees…..FEES, FEES, FEES (some of which you may not even know what they are for so, ASK THE QUESTIONS). Regardless, take the “Total Fees for all Terminals” number and divide that by the total dollar volume that you did for the month and that will give your “Net Effective Rate”. So, for example, if total fees were $1,157.72 and total volume was $41,700.85, the Net Effective Rate is 2.78%. These, by the way, are actual numbers from a statement that a merchant recently handed me saying, “I doubt you can beat my rate….I’m at 1.51% plus $.25” which, of course, is what his provider focused on when originally selling him on the relationship. As you might imagine, after giving this merchant a thorough education on this industry and customizing a proper pricing strategy for him, you know who he is processing with now.

The bottom line here is that I really want to drive home to you is this….READ AND UNDERSTAND YOUR STATEMENT, MONTHLY. Actually, processors know that a majority of merchants simply don’t take the time to do so and quite frankly use this to their advantage and get more deeply into your pocket. Keep more for you and give less to them. Until next time, I wish you a prosperous 2011.

Text Message Marketing to Drive Sales

Over the years, as a merchant services rep, not only did I always strive to help my merchants reduce their processing costs…I also shared ideas on how to increase sales. In one of our earlier emails, I shared some ideas on the benefits of building an email list and using auto responders for that purpose. Here’s another idea that you may find intriguing and, most importantly, profitable.

Text Message Marketing: Make Ineffective Advertising Obsolete

Increase sales, customer frequency and customer loyalty while slashing your advertising budget

HERE’S SOME INTERESTING STATISTICS

SMS, also known as text messaging, is built into over 95% of all mobile phones in the marketplace today

Text messages have over a 90% read rate compared to an 8% read rate of email and 2% for print media

Today, more than 92.5 million consumers actively text message in the United States

A recent Juniper Research report indicates that 30% of consumers
want coupons and deals sent to their mobile phones

No other marketing medium can compete with the cost, ROI,
read rates or redemption rates of a text marketing campaign

YOU OWE IT TO YOURSELF AND YOUR BUSINESS TO EXPLORE THIS…NOW!

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Increase Sales on Slower days

Sell excess items and stock

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Use Gift Cards to Drive Sales

Use Gift Cards to Drive Sales and Reduce Processing Costs

As the holiday shopping season winds down, I reflect on some of the activity that I witnessed. Specifically here, I'm really just talking about how I saw Gift Cards being used. This year, unlike many in the past, there were several large retailers as well as national restaurant chains offering things like "Buy a $20 Gift Card and we'll add an extra $5 on us", or, "Buy a $50 Gift Card and we'll add an extra $10". Obviously, if the big national chains are doing it, then there must be excellent benefits to it driving future sales. Let's take a look at some ideas that you may be able to incorporate into your marketing that maybe you aren't utilizing yet in regards to Gift Cards. All of this, of course, takes into consideration that you are currently using Gift Cards in your establishment.

GIFT CARDS TO CAPTURE PINNED DEBITS AND SAVINGS:

If you have a pin pad in your establishment, then savings on your processing costs are available right at your fingertips. If you haven't already been enlightened, pinned debit transactions save you money over running them as credit transactions. But, many merchants, and their employees, don't do a great job in attempting to get customers to enter their pin number. I recommend to all my merchants that they put up a counter top sign that says something to the effect of "if you're paying with a debit card today, please enter your pin number as it saves us in processing costs". Or, of course, you could come up with something to that affect. But, here's a way you could utilize Gift Cards to help in this endeavor. Get yourself a fish bowl and preload a bunch of your Gift Cards with values ranging anywhere from $1 to maybe $20 (you can decide the values but just try and mix it up some). Then, put a sign on the counter that says "Enter your pin and win" or "Enter your pin and take a dip"....something along those lines. So, once they enter their pin number, they get to pull a card out of the bowl and it will be good on their "next visit". The obvious goal here is to get them back into the store again and they will virtually always spend more than the value on the card. National averages indicate that gift card holders tend to spend at least 20% more than what's on the card.

GIFT CARDS TO INCREASE YOUR AVERAGE SALE TODAY:

Here's an idea that could help boost your average sale today. Everybody likes a deal, wouldn't you agree? Let's say you have a customer comes to the counter and their purchases come to $42. Why not put up a sign that says something like "Purchases over $50 earns a $5 Gift Card" or "Purchases over $50 earns a 10% bonus on a Gift Card". It may just be an enticement for them to go back and find something else to add to their purchase today. And, of course, the Gift Card they are awarded is good towards their "next visit". Let's face it, if you're keystoning everything in your store and you give a $10 Gift Card, it's really only costing you $5 and will bring in more future sales.

GIFT CARDS ON RETURNS:

This is a strategy that could always be used when someone comes in with a return. Most often, buyers or recipients of gifts simply want a credit to their credit card or cash whichever is more appropriate. Of course you want to be accommodating to whatever they want. But, doing either of the aforementioned returns sends them packing with what was once a sale and money in the till. Offer them what they want but possibly give them an alternative such as "we're happy to refund your money on this transaction, however, as an alternative, we'd like to offer you a Gift Card for your refund with an additional 10% bonus, or $5 bonus, or whatever". Again, the idea here is to try to get them back in the store and respend what was originally spent and hopefully, more. Actually, they may come back, use some of the Gift Card and not deplete it completely which would bring them in again. The more often you can get them in your store, or restaurant, the more likely you are to do future business with them.

GIFT CARDS AS LOYALTY CARDS:

Some merchants use Gift Cards as a form of Customer Loyalty card if they aren't actually using real loyalty cards. For example, tell your customers, or display in your establishment that "all purchases over $20 earn a reward of some percentage automatically added to a Gift Card". And, once again, this Gift Card is good towards future visits. The difference between using Gift Cards as a form of "rewards" type program over using an actual Loyalty Card is that Gift Cards are in dollar denominations and loyalty cards can be either dollars or points. You get the idea...just keep looking for ways to drive those sales.

Well, hopefully these ideas help to get your creative juices flowing. My goal is always to go above and beyond in trying to help my merchants to save on their costs and increase their sales, I pray that 2011 will be a prosperous year for you. Have you capitalized on the phenomenon of mobile text marketing yet to drive sales? I can share ideas with you on that subject as well that will blow traditional marketing methods out of the water at a fraction of the cost.