International Door & Operator Industry

NOV-DEC 2012

Garage door industry magazine for garage door dealers, garage door manufacturers, garage door distributors, garage door installers, loading docks, garage door operators and openers, gates, and tools for the door industry.

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SALES&MARKETING; CREDIT CARD PROCESSING: What's YOUR Qualifi ed Rate? By Erica N. Baker By Erica N. Baker Credit card processing salespeople and business owners spend a lot of time discussing qualifi ed rates. While your qualifi ed rate is a signifi cant indicator of your overall credit card processing charges, do not mistake it as the only cost associated with your processing. A lower qualifi ed rate does not necessarily translate into a lower credit card processing bill. In fact, dishonest credit card processing salespeople may entice you with a low qualifi ed rate only to hit you with a very expensive bombshell when your bill arrives. How can business owners defend against unethical sales tactics? C ditCredit card processing di d i Your Best Defense ourBt Best D Knowledge is power. Learning the basics of 3 tier pricing programs strengthens your negotiating position while helping you sort out companies that will take advantage of the intricacies in credit card processing in order to overcharge merchants, from companies that will educate business owners so that merchants can be confi dent in their savings and their decisions. The Basics You need to accept credit cards. That's standard in today's marketplace. However, overpaying is unnecessary. Let's get you ready to negotiate pricing. Most merchants pay for their credit card processing based on a 3 tier pricing program. This program exists to simplify processing charges. You may have heard of the following transaction categories: qualifi ed, mid-qualifi ed, and non-qualifi ed. You may or may not understand how processors use these categories, or tiers. (Note that the terms qualifi ed rate and discount rate may be used interchangeably.) Processors' cost of processing is determined by interchange rates. These are rates set forth by the major credit card companies for every type of card they offer. There are hundreds of possible interchange rates. Imagine your statement detailing the rates of every transaction you process. If you fi nd a 3 tier system confusing, you will be completely bewildered by interchange rates. Instead of sending you a novel-sized statement every month, processors use the 3 tier pricing plan to ensure you pay a fair price and receive a statement you can manage. The processing company takes all of your transactions and places each one into the appropriate category. This category is also referred to as the level at which the transaction interchanges or qualifi es. A qualifi ed transaction is the least expensive transaction, while mid-qualifi ed and non-qualifi ed transactions have downgraded to a more expensive rate. The level at which a transaction qualifi es is determined by many factors, including the method of credit card number entry (swiped or keyed-in), swiftness of transaction settlement, industry type, and completeness of the credit card information. Continued on page 78 VOLUME 45 ISSUE 6 2012 77

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