SIGN UP FOR THE WORST SALES GIMMICK OF THE YEAR! Get Free Interchange! Make Your Customers Pay For You to Operate Your Business! Lose Customers Fast!
I’ve been selling card-not-present payment solutions before Amazon was born…before google was, too.
I was very unique in the merchant business.
“I’ve never sold a swipe machine in my life. I’m an expert in card-not-present.”
Both were true until a year ago. Today I have my own ISO and I NEED swipe accounts to maintain a stable portfolio. My team and I have no choice but to change what we have known our entire careers in payments and begin to build a card present portfolio. We learned quickly that converting low risk swipe accounts is harder than it seems. The competition is heavy and there is little you can do to really differentiate yourselves from the next merchant processor.
I started researching various sales tactics and they all seemed so scammy. I have based my entire career on transparency, and most of these were the opposite of that. Interchange is interchange. I know compliance, regs, and pricing inside and out. Then one tactic stood out because it’s being promoted so much.
Tell customers they will get interchange for free! Interesting. Here’s how it works. Merchant signs up for a merchant account. They post a sign at their business that tells customers if they pay with cash, they don’t get changed a surcharge. If they pay with credit card, they are charged a charged a surcharge. Hmmm. Customers are already used to getting charged extra fees, but would customers go for this? My bigger question was “should” customers go for it.
Then it happened to me. I went into my local dry cleaner and I see the sign! Pay by cash or get charged 2.75% for using a credit card beginning May 1, 2018. Two things immediately stood out to me. First, I uncovered the scammy side of this tactic. We all know that 2.75 is wayyyyyyyy over Card present discount rates. The merchant account provider is making a ton of markup on the merchant. Secondly, it really upset me! As their loyal customer for years, I only use credit cards. Now I am going to have to pay a surcharge so I can cover their credit card processing fees. No way!
Since I have been going to the cleaners for a long time, I spoke to her about it. She said she was told that every merchant in the area was doing it and everyone would be on the program because visa/MasterCard charge to much and why should she pay for it. I told her ,”Why should your customers pay for you to operate your business?” I told her that if I wasn’t in the industry, I would have never come back to her, and my business would be gone.
In a world where customer service is at an all time low, this is terrible way to thank your customers for choosing you over your competitor. Rather, I gave her my exact cost with zero markup. I have a huge card not present portfolio. I need her more than she needs me. No gimmicks. I made nothing on the account. Her customers – including me – aren’t leaving and she knows that I care about customer support more than making short term cash. She didn’t need a fancy expensive terminal. Regular EMV-complaint terminals work perfectly fine. She didn’t need to keep adding layers of tools that cut into her cost.
It’s time to go back to the basics, friends. Stay relevant, but always focus on the bottom line.