You need to have a few fundamental things if you want to run a business. Obviously, a location, merchandise, and paying customers are all essential, but merchant services are almost as important. After all, how do you store the money you earn if you don’t have a merchant account? How can you accept credit and debit card payments if you don’t have a payment processing plan?
While you may not be able to run a business without these tools, you should still be selective when you choose them. A bad merchant services agreement can create unnecessary expenses and subject you to severe limitations. Under the wrong circumstances, it can even compromise your financial reputation.
This threat may seem disproportionate for many businesses, but it’s definitely real for car dealers. Unfavourable deals can create unnecessary hassles for otherwise prosperous vendors. In many cases, these impediments can become insurmountable financial roadblocks that may wreak havoc on bottom lines.
So how can you avoid these problems and get the services you need? After all, if these resources are so important, there must be some way to get a fair shake. Thankfully, there is.
Read on to learn about what you should avoid to get the best car dealership merchant services for your needs.
Profit-Draining Processing Fees
Some things are simply unavoidable. The sun will set at the end of each day and everyone will eventually grow old. In the same way, processing fees are inevitable. If you want access to merchant services, you’ll need to pay these costs, whether you like it or not.
Unfortunately, these charges are especially tough on car dealerships. That’s because processors charge based on variable rates instead of flat fees. Their clients’ bills will vary depending on how much money they make from debit and credit cards. If a processor’s rate is one percent and a merchant makes $100 from a credit card transaction, the processor makes $1.
This may not seem like a major expense, but it is when every product you sell costs tens of thousands of dollars. Car dealerships can lose hundreds of dollars on each transaction, but that’s not even the worst part. These businesses suffer from slim profit margins, so even small losses can have a major effect on their bottom lines.
You can mitigate some of the damage by restricting credit card payments to 50 percent of an order. However, customers will likely want to pay for some of their orders on debit, so you’ll likely be stuck paying these rates no matter what.
Cluttered Monthly Statements
High fees are enough to turn any businessperson off of car dealership merchant services. But opening up a monthly statement only to find it barely legible just adds insult to injury. Many dealers sign processing agreements based on a desirable rate, only to find that their first bills are inundated with hidden fees and unexpected costs.
This doesn’t just confuse merchants. It also makes it more difficult for them to budget their resources effectively. Dealers should review their agreements before they sign and inquire about things like administrative, paper, and transaction costs before they sign.
If car dealership merchant services sound needlessly unpleasant, you’re in luck. There’s a better way to ensure that your business gets the utilities it needs when shopping for a merchant services provider. An all-inclusive plan eliminates hidden fees, simplifies monthly billing, and ensures that you only pay one rate. With these deals, you’ll gain greater financial control over your company while still offering your customers the services they expect.