Changing providers is not for the faint of heart nor is it something that can be done in just a few hours, as I found out halfway into this character building exercise. However, if you have the fortitude and tenacity to do your research, you will be able to save money on those pesky and convoluted fees.
What I found out about this unregulated industry is important to share, especially as I managed to escape a particularly bad situation that would have held me in a contract with an exorbitant termination fee.
WRONG! I quickly learned that this service is outsourced and you will always pay more than you should. The other detail that I missed on the sign up was that it was a three-year commitment! And I purchased their terminal from them, however, it was refurbished so it wasn’t the full hit. Note: anything that they say is free ~ isn’t!
First rule: Don’t use your bank; they are the middleman taking a cut of your business transactions.
Second rule: Recognize that whatever rate you are quoted, the likelihood of you getting that rate on most transactions is slim. Even Costco quotes an incredibly low rate (also a middleman), but if your clients are using reward cards, business cards, international cards and others, those transactions occur at the higher rates. If most of your business happens online or if you take online orders and then key them in rather than swipe the card, those keyed transactions also occur at a higher rate.
Then, you need to factor in transaction charges (some much per transaction), batch and settlement charges. It is only when you add up all your credit card charges (sales AND refunds) and divide that by the total fee you are charged each month, do you begin to grasp the true cost of your merchant fee charges.
Third rule: Take some time to research your provider both with the BBB (Better Business Bureau) and by googling the company’s name with the word “scam”, i.e. “MerchantNameXXXX scam” to see what others may have posted. Had I taken either of these important steps, I would have saved myself misery and time.
Fourth Rule: Don’t sign anything that looks like a contract even when the representative tells you it is an application form. I got caught in this one, missing the part on the contract that I was signing a binding contract with a three year commitment and an auto additional year or a $495 termination fee. DUH!
I only got out of the contract because I had not downloaded their programming AND threatened to file complaints with Dept. of Commerce and call the local TV station. That college business law class came in handy! I felt like a consumer protection champion, except that as retailers, we are not protected to the same extent as consumers!
Credit cards merchant fees are part of a winery’s cost of doing business. However, with some effort and knowledge, you will share money. The net result for my effort is that I will be saving close to .8% this year. Maybe that doesn’t sound like a lot, but if you are a winery taking in gross online sales* of $100,000 in credit cards, that is a cool $800. And that says iPad to me!
PS: *Gross sales include sales tax, so as an agent for the state in collecting sales tax, be aware that you will make up the 3% cost on the sales tax you collect via credit card transactions.