Here are some other things that are part of the untold or half told
sales story. I can’t believe people can still sell like this, but over
promised debit use still has some big sizzle. Everybody knows that 95%
of credit card transactions are actually debit cards that can be taken
at a flat 60 cent fee! NOT…. In reality there are many variables that
dictate debit use. First, what’s the merchant’s average ticket? If
it’s less than $20 it really doesn’t make financial sense and if it’s
over $150 then debit use begins to drop off. Remember that debit cards
are used in place of a check. So the folks that think the furniture
store with a $2000 average ticket is going to be doing lots of debit
transactions for 60 cents is nuts. Next, debit use takes additional
training and equipment for smaller merchants, therefore the clerk
usually has to ask and the customer has to agree. If they’re like me
they wouldn’t know their PIN # anyway.
The one rate credit card processing is always popular and of course
it’s always the lowest rate possible. Only 1.33% to process your
credit cards. No need to mention downgrades or any other fees for that
matter. The scary thing is that there are actually merchants who still
fall for this. It’s usually because the person selling this is “direct
with Visa and can offer lower pricing than everyone else”. Does anyone
think anyone else could be in business if someone could under sell them
by that much and still provide the same service?
Speaking of things that I can’t believe merchants fall for… The old
“You can cancel the lease anytime you want” or “You can take the lease
on a trial basis”. Forget about the fact that the lease paperwork says
in BIG PRINT that it’s NON-CANCELABLE. But that doesn’t seem to stop
some people. I actually knew a guy who used to tell merchants that if
they ever needed to get out of a lease that he would get it reassigned
to another merchant. He used to tell merchants that his company had a
whole department that was dedicated to reassigning leases. Hey I
wonder what it pays to reassign a lease? Oh it’s NOTHING, ZIP, NADA,
ZERO. The very same reason that if anyone finds someone who wants to
lease you can bet it’ll be a new one.
Speaking of leases. How many times do merchants hear “you’ll own the
terminal at the end of the lease”? Like on the 48th month a magic wand
will stop the lease payment and transfer ownership to the merchant.
Well folks that would be called a LOAN. Leases are distinctly
different and the merchant will not own anything at the end of the
lease except a continuing month-to-month lease payment. The
month-to-month continuation is if they’re lucky. I’ve seen leases
automatically renew for another year. But let’s say the merchant
remembers the lease term is up, they will have to pay a buyout that is
normally 10% of the total they have paid the lease company, plus a
buyout fee. For example if the lease were $20 for 48 months, the
merchant would have paid $960. So we’d take 10% of that and for $96
plus at $50 acquisition fee the merchant can own that 4 year old Tranz
330. What a deal!
How about the people that split fees to one small component when
quoting them? We all know, or at least should know, that a
transaction fee of 25 cents is broken down into several components.
For example, let’s say that interchange is usually 10 cents and the
processor’s authorization, capture and settle is an additional 7 cents.
This would leave a profit of 8 cents. There are plenty of people who
sell merchants on just one component of the transaction fee without
disclosing what a total transaction will cost. Here for example
someone would quote the merchant a 15 cent transaction fee, while the
fine print would say plus interchange that would add another 10 to 15
cents. So, Mr. or Mrs. Cheapo merchant buys from the 15 cent guy,
stiffs the honest 25 cent guy and ends up paying the same or more.
Ahhhh let the buyer beware. The same is often true with debit
transactions. A debit transaction is usually split into two
components, the processor’s transaction fee and debit network fee.
Once again I’ve seen people sold on a 20 cent debit transaction fee,
not knowing that an additional 20 to 30 cents would be assessed on any
transaction they did on this planet.
Last, I want to wrap it up with the old FREE SUPPLIES bonus. I’ve seen
merchants make up their mind on a company because free supplies were
offered. As usual “The devil is always in the details”. I’ll send
you 10 rolls of paper for FREE if I can charge you a $10 handling fee
and $10 shipping fee. They just paid $2 per roll for paper they could
buy for 50 cents from legitimate supplier. So let’s see $20 for FREE
paper or $5 plus a $3 UPS ground fee for a whopping $8 if you pay for
it? Boy oh boy things are not always what they seem.
The scariest thing is that all too often I run into MLS or salaried
sales reps. working in this business that actually believe some of this
stuff. They just don’t have any idea about the details of their own
programs. Some of these folks I’m referring to have been selling for
years and have never taken the time to learn more. These are just some
things to educate merchants about to set yourself apart. If you’re
like us you’ll end up with happy merchants that will give you referrals
and stay with you for years.
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