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;(continued from page 77) 3 Tier Pricing Explained See the table above for a sample 3 tier pricing program. Please note that it is essential for the processor or the merchant to ensure that they choose the right plan based on how business is conducted. Merchants who make sales by phone, internet, or mail-order will be overcharged on a retail plan. Likewise, retail merchants on a MOTO (Mail-Order, Telephone- Order) plan will also overpay. Other Fees As you can see, the qualifi ed rate is just a small portion of your processing rate structure. In addition, you will probably have other fees associated with your credit card processing. For example, you may be required to pay a monthly or an annual fee. This can be discouraging for merchants because they feel like they are paying extra for their processing. In reality, these fees help processors circumvent rate increases, which mean that merchants pay less. If a processing company can employ a monthly or a yearly fee (or a combination of the two), they can ensure that they will cover certain costs associated with processing your transactions. If processors did not charge monthly or annual fees, 78 they would have to raise your rates considerably. Depending on your volume, this could mean the difference between one-hundred dollars and one-thousand dollars (or more). Conclusion The fi rst step in negotiating credit card processing pricing is choosing a merchant service provider that you trust. Processing providers who encourage unethical sales tactics do not provide fair processing or benefi ts to their clients. Secondly, understand the pricing structure that your processor will use. Be sure you know why the plan they have set you up with is the best plan for your business. Do not be fooled by statements like "We offer a qualifi ed rate of 1.62% and no monthly fees!" Just because you have a low qualifi ed rate does not mean you will pay less. For example, if you have a low qualifi ed rate on a retail plan, but you are keying in most transactions, you are always paying the non-qualifi ed rate (which is the qualifi ed rate PLUS the non-qualifi ed rate). Remember that a lack of monthly fees can be made up by an unreasonably high monthly minimum and a higher rate. We have not discussed International Door & Operator Industry™ equipment, but free equipment usually comes with an unfair price as well. The cardinal rule of negotiating credit card processing pricing is to educate yourself, even if you think you understand all the details. Many savvy, and intelligent business owners have been fooled by a slick salesperson after assuming they understood the details of their contract. The fi nal step in negotiating pricing is following up regularly. Review your statement and ask questions. If you're happy with your service, but you think you can get a better price, talk to your provider. They may be able to adjust your plan. Remember, you may be processing transactions differently than when you signed up for your processing plan. A trustworthy credit card processing salesperson or account manager should be able to review your statement with you and make changes. If after following these three steps, you are happy with your processor, you have chosen the right credit card processing provider. Erica Baker is the Marketing Coordinator for Electronic Data Payment Systems. She can be reached via email at IDA@edpaymentsystems.com for questions or comments.