I'm sure I don't have to finish the title sentence, seeing as you all probably know it. It's a simple piece of advice to live by, and those who have the discipline to do so often save themselves $1000's throughout their life. As human beings, we all want to believe in things that seem amazing, so when someone is presented with a deal that seems incredible, it's easy to disregard logic and buy into it. Recently one of my clients called me because a salesman had come into his store and offered him the most incredible merchant pricing plan he'd ever seen... 1.69% on ALL transactions. "Yes, mr. Business Owner" he told them "with our company, you will pay 1.69% on every single transaction you take for the rest of your life and not a penny more!!!" Seeing as how my client processes about $30,000 a month and had an effective rate (total processing fees divided by the total volume) of about 2.1%, the salesman promised him a savings of about $120 a month. Sounds great, right? In this tight economy, who doesn't want to save $120 a month? My client got all the paperwork and contract from the salesman and luckily, before he signed it, said, "This looks great but I would like my current account manager, Cameron, to look it over first." Thank goodness I had built rapport with him enough to have him think of that because this is what I found when I looked over the agreement:
First of all, the salesman had been honest when he said "everything will process at 1.69%, HOWEVER he conveniently left out the fact that there was also a surcharge of 1.3% for every card that isn't qualified (because my client is a flooring company, 99% of his customes use rewards or business cards that don't qualify). ALSO, the 1.69% was if the card was swiped, however, my client key enters most of his transactions. The surcharge for key-entered was .5%. Let's do some math: 1.69 + 1.3 + 0.5 = 3.49%. He would have taken my client from 2.1% to 3.49% (costing him about $410/month more in processing fees). As if that wasn't bad enough, the shady (I'm being nice by only calling him shady) salesman also hid, in fine print, a $80/month, 60-month lease for a terminal. There was also some additional monthly fees, statement fees, wireless fees, etc adding up to $40/month, but I'll spare you the details.
Moral of the story is that there is a lot of money to be made in the merchant service industry by lying to unsuspecting business owners. Luckily my client had the sense to get a second opinion before giving his John Hancock to them. If you are thinking about switching merchant companies, PLEASE do your self a favor and take time to look over everything. YES, YOU NEED TO READ THE ENTIRE CONTRACT before signing or else you could end up putting some salesman's kid through college. We offer free contract reviews, even if signing up with a different company. Bottom line is that I got into this industry to help companies save money. I sleep at night knowing that EVERY SINGLE ONE of my clients have a better deal than they didn't prior to switching, and I want to do my part to insure businesses don't get screwed out of their hard-earned money.
Best of luck to all you out there. Please remember to always be careful and weary of false promises and any deal that seems too good to be true... It most likely is.