The Scams

As a business owner, you must find it difficult to sift through all the phone calls and processing companies walking through the door talking about saving you thousands of dollars a month.  Which one is actually telling you the truth and which ones aren’t?  I want to break this down for you into 3 categories:

  • Phone Call
  • Walking through your door #1
  • Walking through your door #2 (you’ll understand in a minute)

Lets start with the phone calls.  First off, the person you talk to is trying to accomplish 1 of 2 things.

A) get you to send them a statement for review

B) set an appointment for Walk through the door #1


Typically the phone calls are trying to accomplish a couple of things.  They are using ’emotion’ to try and convince you that something is wrong with your current processor and that you need to change right away or you business will die a slow, painful death.  The other is trying to convince you that your current processor is charging you an arm and a leg for processing fees and it’s because of XYZ.  Let me further break down some of the things you might hear:

  • Hi Mr./Mrs business owner, we have been reviewing your account for the last 6 months and have noticed that you have been in good standing with no chargebacks and you now qualify for corporate wholesale pricing.

This is ridiculous.  They don’t have access to your account and have no way of knowing if you have had any chargebacks!   Do you think your current processor is going to allow other companies to view the details of your business with anyone?  The next part of bogus info in that statement is the ‘corporate wholesale pricing’.   If you’ve read my other BLOGS, you already understand that every processor out there has the same rates. It’s completely up to the company how much above cost they want to charge you.  They would like you to believe that by doing business with them you are going to get some great rate that can’t be given by anyone else.  Well, frankly that’s just untrue.

Next, you might hear something like:

  • Hi Mr./Mrs. business owner, after reviewing your account, it appears that you are not PCI Compliant. If you check your statement, you are most likely being billed a $19 a month Non Compliant charge and you are currently running the risk that your account will be terminated.  Please fax me a statement right now so we can review this for you and remove that fee.

Fact is, you may very well be being charged a $19 fee for non compliance but that doesn’t effect your account status in the least.  What it actually means is that you haven’t filled out your PCI form, which is required annually, and since you haven’t, your current processor is trying to entice you to do so by charging you a fee in hopes of getting you to do it.  IF you don’t, nothing will happen but your processor will continue to charge you that fee.

Regardless, both phone call scenarios above start with lies to gain your attention.  Often using scare tactics to drive emotion and garner a reaction.  Hence, getting you the business owner to mistrust your current processor and potentially switch to the company calling you.

Walking through your door #1 – Phone Call

  • Hi Mr./Mrs. business owner, after reviewing your account, Blah, Blah, Blah…We have a representative in the area and I’m going to have him stop by to review all the things wrong with your current statement. He will be able to cut your processing costs by 15-20%.  Does this Thursday morning or afternoon work best????

At the very start, I talked about ‘Walking through your door #1’.   This is that guy.  He doesn’t live here.  He works by traveling the country from city to city signing new business owners to contracts at high rates all day, every day.  This guy doesn’t want to do anything but make as much money as he can off of your business. He’ll lease you terminals for ungodly rates, lie about savings and pricing just to get you to sign the contact.   Because once you do, he’s going to make a killing and disappear into the wind.   Next month when you get your first statement and realize you DIDN’T save 15%, it’ll be too late and he’ll be in the next state working over his next victim.

My recommendation if you get nothing else from reading this, don’t do business with anyone in this industry if you can’t shake their hand this month and then shake it again next month and the month after that.

That, my friends is the details behind MOST phone calls you’ll get.  Now, when I started in this business, what seems like back in the Carter era, I used to make those phone calls and set appointments that I would go to.  So at least it was me you would talk to and then see.  Regardless, I don’t do that anymore.  If I could be completely honest, my business model now consists of 2% random meetings and 98% referral.

But, this is not supposed to be talking about me, it’s educating you…

Walk in your door #2

Let’s move on to the guy that does just walk in your door. He does live in your city and you can shake his hand.  How do you trust him?  How do you know if he’s telling the truth when you can’t understand what he is saying?  Truth is, you don’t. Unless he can explain everything to you front, back and sideways, put it down on paper and prove to you in some way, you can’t trust him.  That’s why I make sure my clients are educated and inundated with information to the point of overload.  My goal is to make sure they have ZERO reason not to trust me.  Then, and only then, do we move forward.

Anyway, regardless of how you find yourself talking to a merchant company, whether it be on the phone or in person, you need to look at the details of what they say.  Recently, I had a chat conversation with a lady from another processing company that was trying to prove to me that I didn’t know what I was talking about.  She made a claim about what she can provide for a small business owner, I questioned it with regard to what I knew she meant, and she told me I was wrong.   OK fair enough.  Understand that we had this conversation after she asked me if I was a business owner, which I am, and I replied “YES.”   Without going into all the details, the gist of our conversation was that she made the following claim:

HER TALKING: “Unlike other companies that charge really high fees, my company doesn’t charge you fees and only charges you $21 a month for processing.”

What smart business owner out there wouldn’t just jump on this right away?   I mean, seriously, that sounds like she would be eliminating the processing fees for my business and only charging me $21 a month!!!   Is that how you read that?   Please tell me if I’m way off here.

What happened next is that I simple reiterated what she had said, but I included the real details the way I understood it.

ME TALKING: “So what you do to eliminate the fees for the business owner, you surcharge their customer like 3% and then charge the merchant the $21?”

And it just went down hill from there… Her rebuttal was that with my claim, I was stating she eliminated the fees for the merchant which I guess was wrong.   She says she ‘doesn’t charge’ the merchant fees.   I guess saying it that way is different.   Regardless, in the following messages from her, she stated the following:

  • Everyone is doing it
  • As a cable customer, you currently pay a similar fee
  • She was a direct processor (assuring me she has the best rates)
  • We are just following suit with what Europe is doing (really?)

This is classic sales right here. Look at all these reasons I should switch to her company right now.   I will tell you that the ‘Everyone is doing it” was the response directed at me because now I would be simply charging a surcharge to my customers.  Guess that makes it OK…

There is lies the problem with this program.   First off, understand that 10 states don’t want you surcharge your customers for paying with credit.   Doesn’t mean you can’t but there are some financial repercussions if you do.  Secondly, why would you surcharge your customers for paying you for goods or services your provide?  Do you charge your customers for your electric bill, internet bill and the cost to clean your rugs?   Yes, you absolutely charge your customers for that and it’s called the mark-up…   As the business owner, you add all those fees in when you set your prices.   Why then would you all of the sudden add a specific charge because your customers decide to pay with credit?

What do you think your customers would do once they realize your charging them a surcharge to do business with you?   As a customer myself, I’d probably not shop with you anymore.   But that is just me and if you want to risk losing your customers to do it, you are the business owner and that’s up to you.

However, this is what I call a SCAM.   She would walk into your store or call you on the phone and convince you she will essentially eliminate the fees paid by you, saving all but $21 of the fees you currently pay.   I have this program available to all of my merchants and I don’t offer it.  In my opinion, it’s not good for your business and if you want to do it, there are a number of reps that will offer it to you and I’ll get you their contact info.

I make it a habit to NOT do things that may adversely effect my merchants.


Someone calls you on the phone or walks in your store and claims that their company will only charge you 1%?  So you look at a statement, do some math and see that you’re currently paying 2.2%.  “I’m In…”   You say…  What you will soon realize is that the company you just signed up with is not going to charge you ONLY 1%.  But that the 1% is above cost.   That means that most-likely you just raised your rates.  You might now be paying closer to 3% or more.

This is a classic example of a company or representative that doesn’t tell you the whole story.  You must understand that there is always a cost to accept credit from customers. It doesn’t magically go away because some girl sweet talks you about how she can eliminate your fees or states she’s only going to charge you 1%.  It just won’t happen.  There is another version of this where they claim they will only charge you .25%.   Same principle applies as this fee is above cost.  I know it can be enticing and we all want to believe it, but if the cost to take just the basic Visa Rewards 1 Card is 1.64%, how would it be possible for a company to claim they will only charge you .25%???  Do you honestly think they are going to pay the difference so you don’t have to???

Most businesses are going to pay on average between 2% and 2.5% as an effective rate.   It won’t get much better but it can and WILL get much worse if you don’t pay attention to what is ‘REALLY’ be said.

If you feel that you aren’t quite sure what you are paying now or what the guy or girl is trying to sell you, reach out and I’ll be more than happy to explain it to you.

I’ve had many merchants leave because they were lied to about something better and they found out the hard way the grass wasn’t greener.  They always came back.

Until next week,

I’m Ed Craft, your credit card guy!

15 years in the business and counting.

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