You're Competitors Do
Succeeding in today’s economy means that you must compete on all levels, including the types of payment you accept. Customers want options when it comes to paying for things and your credit card accepting competitors will gladly give it to them if you don’t.
by Phillip Parker on Sunday February 14, 2010
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You're Losing Sales
I used to live down the street from a great restaurant called "Little Burrito Jr." that only accepted cash. The food was the best around and I would eat there often, but I would have eaten there a lot more if they accepted credit cards. In fact, there was another Mexican restaurant about an equal distance away that did accept credit cards. Even though their food wasn’t as good, I estimate that Little Burrito Jr. lost about 50% of my business to the other restaurant simply because I didn’t have cash on me when I was ready to eat. By not accepting credit and debit cards you're losing sales at a cost that will far exceed any merchant account fees, period.
I used to live down the street from a great restaurant called "Little Burrito Jr." that only accepted cash. The food was the best around and I would eat there often, but I would have eaten there a lot more if they accepted credit cards. In fact, there was another Mexican restaurant about an equal distance away that did accept credit cards. Even though their food wasn’t as good, I estimate that Little Burrito Jr. lost about 50% of my business to the other restaurant simply because I didn’t have cash on me when I was ready to eat. By not accepting credit and debit cards you're losing sales at a cost that will far exceed any merchant account fees, period.
You're Losing Customers
Losing sales and losing customers may sound like the same thing, but losing customers is far worse. When you refuse to take a credit card from a customer, and the customer has no other means to pay, it leaves the customer feeling embarrassed and rejected. The likelihood of that customer returning in the future diminishes drastically. There are several businesses that I refuse to patronize because of their no credit card policy, even though I like their products and services! I often wonder if they have any idea the number of customers they have lost forever.
Losing sales and losing customers may sound like the same thing, but losing customers is far worse. When you refuse to take a credit card from a customer, and the customer has no other means to pay, it leaves the customer feeling embarrassed and rejected. The likelihood of that customer returning in the future diminishes drastically. There are several businesses that I refuse to patronize because of their no credit card policy, even though I like their products and services! I often wonder if they have any idea the number of customers they have lost forever.
You're Losing Big Ticket Purchases
How many people do you know who always carry more than $200 in cash? The fact is that most people don't. Whether you sell food or furniture, you've just lost any sale over $200 if the customer isn't carrying a checkbook. And, who carries a checkbook anymore? Just about no one under 30 years old.
How many people do you know who always carry more than $200 in cash? The fact is that most people don't. Whether you sell food or furniture, you've just lost any sale over $200 if the customer isn't carrying a checkbook. And, who carries a checkbook anymore? Just about no one under 30 years old.
You're Losing Impulse Purchases
When McDonald's decided to take credit cards, they found that their average sale went from around $4 to around $7. Studies show that people spend more freely when using a card. I wouldn't doubt that your own spending would reflect the same findings.
When McDonald's decided to take credit cards, they found that their average sale went from around $4 to around $7. Studies show that people spend more freely when using a card. I wouldn't doubt that your own spending would reflect the same findings.
You're Paying more in Bounced Checks
The average fee a business incurs for a bounced check is $25 per check, and that's not even figuring in the time and money lost trying to get your money from the customer afterwards. Credit and debit cards don't bounce.
The average fee a business incurs for a bounced check is $25 per check, and that's not even figuring in the time and money lost trying to get your money from the customer afterwards. Credit and debit cards don't bounce.
If you would like to learn more about accepting credit & debit cards for your business, please feel free to contact me.
by Phillip Parker on Tuesday February 09, 2010
no comments
The most common reason some business owners do not accept credit cards is because of a scary word known as “fees.” There is no doubt that if you are not careful, you will pay more in processing fees than someone who is. How much more? That depends on a couple of factors, but the difference between a good rate and bad rate is usually no more than 2%. We could get into the nitty-gritty of fee types (I may in future posts) but I calculate what I call the "average cost" because it's easier and gives a better overall picture.
The average cost looks at all the fees that are included in your merchant service fees and combines them together to look at the average cost percentage. It's important to look at merchant account rates as an average cost because every company structures their fees in different ways. Some charge high monthly fees and some don't, some charge different rates for different types of transactions and some don't, and it goes on like this forever. This can can make comparing merchant account providers very difficult.
Calculating the average make things easier.
So, how do you calculate the average? Generally it's only possible if you are already accepting credit cards. Take three of your most recent statements and add together your total credit card sales and then add up the total fees you paid. Finally, divide the total fees paid by the total sales and multiply the total by 100. The final number is your average cost of accepting credit cards for your credit card sales. (Example: $350 in fees divided by $10,000 in credit card sales multiplied by 100 equals an average rate of 3.5% or, $350 / 10000 x 100 = 3.5%).
Keep in mind that the percentage we just calculated is only the cost of accepting credit cards for the credit card sales, not the cost of accepting credit cards for the overall sales. To get a better picture of the actual cost, calculate your overall sales, including cash and checks, then divide the total by your merchant account fees. Obviously the average cost will drop significantly for most business.
Why is it important to look at it this way? If a business does an equal amount of cash and credit card sales, most estimates say that a business would lose half of the credit card sales it had made had it not accepted credit cards. This is because the only other option for the customers would have been cash and most people don't carry much cash nowadays. The cost of not accepting credit cards is actually much higher than accepting them. When a business does most (or all) of its sales through credit cards, the average rate becomes much more important. A difference of 2% can add up to be a pretty substantial number.
You might be surprised to find out that your average rate is much higher than the rate your agent quoted. If this is the case, it's because your agent only quoted the “qualified” rate and conveniently forgot to mention the “mid-qualified” and “non-qualified” rate tiers that are much higher. He also probably forgot to tell you that 50%-75% of all your transactions will be charged in those tiers. How could he forget something like that? Maybe he was distracted by the money that was about to pile up in his checking account.
Businesses are charged at the higher “mid-qualified” tier whenever they run a card with rewards, like miles or points. If they run a business, corporate, or foreign card then they're charged at the even higher “non-qualified” tier. The only way to avoid these other tiers is to get “interchange-plus” rate pricing which on average has a cost of 1.5% - 2.5%, depending on the type of business. You can learn more about interchange-plus pricing here.
If you would like to learn more about how to get interchange-plus pricing for your business, please feel free to contact me.
The average cost looks at all the fees that are included in your merchant service fees and combines them together to look at the average cost percentage. It's important to look at merchant account rates as an average cost because every company structures their fees in different ways. Some charge high monthly fees and some don't, some charge different rates for different types of transactions and some don't, and it goes on like this forever. This can can make comparing merchant account providers very difficult.
Calculating the average make things easier.
So, how do you calculate the average? Generally it's only possible if you are already accepting credit cards. Take three of your most recent statements and add together your total credit card sales and then add up the total fees you paid. Finally, divide the total fees paid by the total sales and multiply the total by 100. The final number is your average cost of accepting credit cards for your credit card sales. (Example: $350 in fees divided by $10,000 in credit card sales multiplied by 100 equals an average rate of 3.5% or, $350 / 10000 x 100 = 3.5%).
Keep in mind that the percentage we just calculated is only the cost of accepting credit cards for the credit card sales, not the cost of accepting credit cards for the overall sales. To get a better picture of the actual cost, calculate your overall sales, including cash and checks, then divide the total by your merchant account fees. Obviously the average cost will drop significantly for most business.
Why is it important to look at it this way? If a business does an equal amount of cash and credit card sales, most estimates say that a business would lose half of the credit card sales it had made had it not accepted credit cards. This is because the only other option for the customers would have been cash and most people don't carry much cash nowadays. The cost of not accepting credit cards is actually much higher than accepting them. When a business does most (or all) of its sales through credit cards, the average rate becomes much more important. A difference of 2% can add up to be a pretty substantial number.
You might be surprised to find out that your average rate is much higher than the rate your agent quoted. If this is the case, it's because your agent only quoted the “qualified” rate and conveniently forgot to mention the “mid-qualified” and “non-qualified” rate tiers that are much higher. He also probably forgot to tell you that 50%-75% of all your transactions will be charged in those tiers. How could he forget something like that? Maybe he was distracted by the money that was about to pile up in his checking account.
Businesses are charged at the higher “mid-qualified” tier whenever they run a card with rewards, like miles or points. If they run a business, corporate, or foreign card then they're charged at the even higher “non-qualified” tier. The only way to avoid these other tiers is to get “interchange-plus” rate pricing which on average has a cost of 1.5% - 2.5%, depending on the type of business. You can learn more about interchange-plus pricing here.
If you would like to learn more about how to get interchange-plus pricing for your business, please feel free to contact me.
Posted on Saturday February 06, 2010
no comments
Due to the amount of referrals I get from my existing customers, I have decided to begin accepting new clients. Since I do not need this to support myself, I will be offering the best rates and lowest setup fees that I can. Generally speaking, here is the least expensive option I currently have:
Feel free to contact me.
- Setup with equipment: $200 - $250 depending on your needs
- Monthly Service Fee: $15
- Per Transaction Fee/Rate: Interchange-plus (average rate 1.5% - 2.5% depending on business type. No mid-qualified or Non-qualified transaction penalties).
- Monthly Minimum: $0
- Contract Length: One year
Feel free to contact me.
by Phillip Parker on Thursday October 15, 2009
no comments
Merchants accounts can be expensive and all too often much of the cost can be avoided. I recently posted a list at Bestcovery.com on the best tips to save money on merchant account fees. Although I didn’t go into great detail, the tips I suggest can save merchant vast amounts of money. In my future posts I will go into more detail to help merchants get the best deal.Visit my Bestcovery list here.
Contact Me
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by Mike Francl on Wednesday October 07, 2009
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Mike FranclI wanted to share with you my experience with PayJunction. It has brought me a lot of freedom and many successes and benefits.
I started my career in the telemarketing industry as an Account Manager. During the years I was promoted to Director of Client Service and was making some pretty good money; however, right about that time new rules and regulations caused many layoffs. This was just the beginning for me. In fact, I went through three jobs in three years. It could not have happened at a worse time. My wife and I had triplets just a year before and I had no idea what I was going to do and I did not have much time as I needed to start doing something to pay the bills.
I came across PayJunction and was really intrigued. My wife and I sat down and talked about this as a potential career. We looked at the advantages and disadvantages of being self employed and naturally our main concern was not having that pay check come in every two weeks; however, I would be able to set my own hours and be home to help out. So I decided to give it a try and today I am so grateful that I did.
Like most of you, I knew absolutely nothing about this industry when I started four years ago. In this short amount of time I have built a business that will net me over six figures a year. I will be the first to admit that I am not the best salesmen on the face of the earth, in fact, far from it. This is a result of nothing more than hard work and being Pleasantly Persistent with my constant follow up. As a result of this hard work and follow up, I can now take anytime I want to do things with my kids while they are out of school this summer and occasionally take a Friday off to play golf.
This job has given so much to me and my family. We are able to afford to send them to a private school (they just started kindergarten). I get to wake up and have breakfast with my kids and not have to rush out the door to get to work on time. I get to pick them up from school and most of the time I take Friday afternoon off to do something with them. A lot of days, my wife and I go out to lunch together.
One thing I attribute to my success is the AMS system. This is a very valuable tool and should be used accordingly. You should have all your leads loaded in there and update your notes every time you talk with a lead. You must keep in touch with potential clients and be pleasantly persistent. Find something in common with them, build up a friendship. This allows you to qualify your leads. My leads will eventually buy from me. Either they don’t know it yet, or they are not ready at the time to move forward, and that is my job to move them along.
To really be successful at this job, get to know this product and what it can do. Spend hours on the demo site. This gives you a great opportunity to develop and practice your presentation. Spend time on the phone charge system and get familiar with the support site. There is a lot of valuable information on that site. People buy from people who are confident, articulate and know their product.
I am just finishing up my fourth year with PayJunction and in that short time; I was able to grow this business from nothing. You have to remember that this takes a lot of hard work and patience. If this was easy, everybody would be doing it. When I first started, I was told by the people at corporate to keep in mind that “this is a marathon and not a sprint” meaning that you are not going to be sipping drinks on a resort island in two months living off the residual income. If you work hard and smart at this job, you will eventually get to that point. I will be there soon waiting for you to join my family and I.
I started my career in the telemarketing industry as an Account Manager. During the years I was promoted to Director of Client Service and was making some pretty good money; however, right about that time new rules and regulations caused many layoffs. This was just the beginning for me. In fact, I went through three jobs in three years. It could not have happened at a worse time. My wife and I had triplets just a year before and I had no idea what I was going to do and I did not have much time as I needed to start doing something to pay the bills.
I came across PayJunction and was really intrigued. My wife and I sat down and talked about this as a potential career. We looked at the advantages and disadvantages of being self employed and naturally our main concern was not having that pay check come in every two weeks; however, I would be able to set my own hours and be home to help out. So I decided to give it a try and today I am so grateful that I did.
Like most of you, I knew absolutely nothing about this industry when I started four years ago. In this short amount of time I have built a business that will net me over six figures a year. I will be the first to admit that I am not the best salesmen on the face of the earth, in fact, far from it. This is a result of nothing more than hard work and being Pleasantly Persistent with my constant follow up. As a result of this hard work and follow up, I can now take anytime I want to do things with my kids while they are out of school this summer and occasionally take a Friday off to play golf.
This job has given so much to me and my family. We are able to afford to send them to a private school (they just started kindergarten). I get to wake up and have breakfast with my kids and not have to rush out the door to get to work on time. I get to pick them up from school and most of the time I take Friday afternoon off to do something with them. A lot of days, my wife and I go out to lunch together.
One thing I attribute to my success is the AMS system. This is a very valuable tool and should be used accordingly. You should have all your leads loaded in there and update your notes every time you talk with a lead. You must keep in touch with potential clients and be pleasantly persistent. Find something in common with them, build up a friendship. This allows you to qualify your leads. My leads will eventually buy from me. Either they don’t know it yet, or they are not ready at the time to move forward, and that is my job to move them along.
To really be successful at this job, get to know this product and what it can do. Spend hours on the demo site. This gives you a great opportunity to develop and practice your presentation. Spend time on the phone charge system and get familiar with the support site. There is a lot of valuable information on that site. People buy from people who are confident, articulate and know their product.
I am just finishing up my fourth year with PayJunction and in that short time; I was able to grow this business from nothing. You have to remember that this takes a lot of hard work and patience. If this was easy, everybody would be doing it. When I first started, I was told by the people at corporate to keep in mind that “this is a marathon and not a sprint” meaning that you are not going to be sipping drinks on a resort island in two months living off the residual income. If you work hard and smart at this job, you will eventually get to that point. I will be there soon waiting for you to join my family and I.
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