Let me just jump right in and share with you a story that became the inspiration for this post. A local retail merchant (who owns a comic book store) recently shared a story with me that seemed relevant to share here.
About a month or two ago Mike called to let me know that “someone” walked into his business and said they could save him money on his credit card processing fees.
Okay, that’s no surprise. Lots of sales reps go door to door looking for new business.
But, here’s the thing..
He wanted to stay with his current provider and asked me to look over his review as an independent third party. Since he’s a friend of mine I say “OK.”
Phony merchant account comparisons exposed
The next day I stopped by and picked up their “analysis.” And it took all of 5 minutes to see what they were really “proposing” to him (and, by the way, why I became so hopping mad).
Now, I won’t tell you the name of the company using this tactic, because, to be fair, it is more common than you can imagine.
For starters, they misrepresented his actual costs.
On a side note, this is more common than you might think. Lots of merchant services providers use this tactic in order to get you to sign a long-term contract.
On the “worksheet” they indicated that I was charging him 50 cents per transaction (it’s 16 cents). They also misrepresented his actual processing rates, and failed to disclose additional “surcharges” (he doesn’t pay any surcharges with me).
Additionally, for those of you who may not know this, there are actually several different pricing models possible for an account, which will affect what you’ll pay for each processing category.
So I pointed all this out to Mike he was, understandably, furious.
Needless to say, he decided not to make ANY changes to his account.
Had he switched over it would have cost him roughly 250% more each month on processing fees, instead of saving $150 per year which they were “projecting.”
So what’s the moral to the story?
Well, if someone comes along and performs and “audit” of your account, make sure the numbers, rates and fees they say you’re currently paying match your existing merchant statement. If they say you’re paying $400 a month, check your statement to see whether or not that’s accurate.
If they can’t get that right, they are over-inflating your projected savings to “steal” your account.
It’s a question of integrity, plain and simple…
I hope you found this information helpful. Please feel free to share your comments below.
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