You should be aware of this

     Well, it's been a couple months since I posted last. As you can see from the picture, I've been quite busy. My family and I spent two months in Costa Rica so my mind was elsewhere. However, this business that I'm in (merchant services) is in the blood and I have never really strayed too far away from the pulse of what's going on in this industry.

     As one that's always been concerned about long-term relationships with my merchants, I feel compelled to bring up areas of concern that I feel you should be aware of. You're probably aware of the new credit card laws that went into effect in February. Well, along with that, many card issuers have increased interest rates and consequently, many card holders have reduced their spending. So, the card issuers are coming up with some programs to encourage consumer spending, once again.

     There are some that believe that the economy is starting to show some signs of recovering from our most recent sluggish past. Many of the credit card issuers are now ramping up their rewards programs. Some are offering double reward points on purchases in general. Still others are offering more frequent flyer miles for each $1 spent. You may also see that some card companies are offering increased points or "rewards" for purchases at "partner" merchants. No matter what their doing, the bottom line is that these new purchases will affect your bottom line.

     Here's what to look for on your end. First, if you're priced on a three tier pricing structure, thes "rewards" type cards fall into your Mid-Qualified or Non-Qualified category. There are numerous types of rewards cards offered by Visa and MasterCard so, you need to call your provider and ask them point blank, which level these rewards cards clear in. Honestly, the processor can, at their will, determine which category to put each card type in and if you aren't informed thoroughly, you're needlessly giving up profits. I know of a processor, that not long ago, informed their merchants (you know, in that little paragraph or two on the first page of the monthly statement that nobody seems to read) that they were "reclassifying" Visa Rewards 2 cards and moving them from Mid-Qualified to Non-Qualified (at rates that are, at a minimum, 1% higher). If you're on a four tier pricing model, these reward cards will be in either Tier 3 or Tier 4....make sure you ask where your transactions are priced.

     Now, if you're in a Cost-Plus pricing model, you don't need to worry about being priced in a "bucket" where you don't need to be. All of these rewards cards will, by their very nature, simply be routed to the proper category and pricing. The bottom line is that if the credit card issuers ploy to increase rewards to their card holders, encourages them to spend more, then you reap the benefits of increased business. You simply want to make sure you absolutely know what you're paying for these transactions. After all, who is most interested in the profits and viability of your business....you or your merchant account provider?

     Being in business these days is tough enough as it is. Anything you can do to cut your costs and, subsequently, increase your profits is a good thing to do. With that in mind, knowledge is king and the kind of knowledge that I offer to you, is typically not offered up by the majority of credit card processing reps. So, if you want to really stack the cards in your favor, GET EDUCATED. I have prepared a 40 page eBook on the topic and will give you the A-Z's of how the credit card processing industry works and how it affects you. Take a spin on over to my website and check it out for yourself. I'm confident that you won't be disappointed.

How To Give The Gift That Keeps on Giving

Okay, it's the holiday season which is, of course, a time for giving.  Do you have people on your shopping list that are always hard to buy for?  By chance, are any of those people business owners?  Well, I've got a gift idea for you that will blow their socks off.  Let me tell you a little about it.

You see, for those of you that have read this blog for any length of time, you know that I am a 61 year old retired merchant services rep.  I owe my to success to always taking the time to thoroughly educate my merchants on how the credit card processing industry works.  I educated on the three main pricing models that exist today and we discussed which was absolutely best for their business.  Each program offers benefits differently to each business based on how they typically transact business and what their average ticket is.  My huge client base was directly as a result of building mutually rewarding long-term relationships with them.

Did you know that every merchant services provider has the exact same cost basis?  It's called Interchange!  Do you know what interchange is?  Ask any business owner you know personally, or wherever you shop, if they totally understand all the rates and fees they pay for the "privilege" of accepting plastic in their business.  I'd venture to say that the majority, if not all, will answer with a resounding "NO". 

Well, since I'm no longer active in the field seeking new business, I decided it was time to give back.  So, I created a 40 page eBook on the topic of credit card processing.  It is so thorough that even new reps to the industry, have used it to get their education.  This is precisely the kind of information that your provider doesn't want you to know....for obvious reasons.

Do yourself, and your business friends a favor and send them on over to MY WEBSITE WEBSITE so they can check it out.  How often to you get to give a gift (My eBook) that keeps on giving and giving (in reduced costs and increased profits)? 

CLICK HERE TO START SAVING NOW

LET THE GIFT GIVING BEGIN

How much are you paying customers to shop with you?

There isn't a week that goes by that a new credit card offer doesn't show up in the mailbox. Credit card issuers are constantly trying to lure new customers to transfer balances or, at the very least, apply for a new and improved credit card. New and improved in that every time you use it, you will earn some form of "reward". Sounds good to the consumer who uses plastic anyway so why not get paid something back for doing so.

But, here's the issue. These newer breed cards are great for the consumer but not so great for you, the merchant. Every time you accept one of these cards for payment, you are paying an increased discount rate over what you would pay for a plain old "generic" credit card.

Today, I met with a merchant (hair salon) that is currently on a Four Tier pricing model. Thirty two percent of her volume is in Tier Three which is clearly rewards type cards. She is paying over 3.08% + $.03 for each of these sales. Also in this category would be card not present type transactions which she says, they do maybe ten of those a year. In taking a look back during the same time period last year, her Tier Three volume was a much smaller percentage of the total. So, it's obvious that more of their customers are receiving, and using, these cards for the perks they receive.

So, obviously, we'll be moving her over to a Cost Plus Pricing model so that at least, since she's already receiving these cards, she'll be able to pay less for them. It's a tough game out there these days people, just trying to stay profitable. You need to look at any way you can to reduce your cost of doing business.

Let me encourage you...take a detailed look at your monthly credit card processing statement...EVERY MONTH. Compare to the previous month and even, take the time to compare to the same time period a year ago. Look for any noticeable changes. Also, make sure that you totally understand all the fees that you are being charged. Ask your rep, if you can even find them, to explain in detail what everything is. If they don't know, themselves, which isn't too uncommon, find someone that can enlighten you. My contact info is also available here if you so desire.

The bottom line here, and in all my posts is to GET EDUCATED. Accepting credit cards for payment in your business is a necessary evil. You must, therefore, do all that you can to ensure that you are paying fair and accurately for the "privilege" of this service. Thanks for reading!