Do you want to pay $2160 for a $300 terminal? One of our customers did just that. He had a $45 per month lease for 48 months on a credit card terminal that should have been purchased for about $300.
Topics: Credit Card Processing
If your restaurant accepts credit cards, you’ll always have to pay credit card processing fees. Most merchant account companies charge up to 5% on all credit card sales, including processing costs, and statement fees. America is choosing plastic over cash these days, and choosing not to accepts credit cards is not the smartest way to avoid these fees. You can’t avoid credit card processing fees, but you can reduce these fees and save your restaurant money with a little preparation.
Just like buying a new flat-screen TV or a new car, you can get the best deal by doing a little
comparison shopping. Some providers charge more than others, even though they may offer the same level of service. Other providers may advertise a lower rate, but they actually charge you more in hidden fees and provide less service.
If you need to find a new payment processor, a quick Google search can give you a list of companies. You can also search for companies on the Better Business Bureau website where you can see whether the company is accredited whether they’ve received any consumer complaints.
Ask your processor, what is the total rate when all fees are included? Are there any contracts, cancellation fees, statement fees, service fees or application fees? Can they waives any of those fees for you? They can.
Swipe or Dip Only
Transactions where you enter the cardholder’s information manually cost more in fees per transaction than swipes and dips. That’s because manually entered transactions are more vulnerable to fraud, since thieves usually obtain credit card numbers without a physical credit card to make fraudulent purchases.
Additionally, most credit cards contain magnetic stripes or chips that have built-in security features that would not be used if the card is entered manually. Since the risk of fraud is higher, credit card processors charge you more for manually entered transactions.
Require Credit Card Sales Minimums
If your restaurant usually handles smaller transactions, it might be smart to require minimum amounts for credit card sales. For example, if you own a small carry-out that gets a lot of small transactions under $5 and your profit margin on those products is just 10%, it’s probably not worth conducting the sale after factoring in credit card fees.
Just put up a note that says you accept credit cards with a sale minimum $10. If a customer doesn’t understand, just explain that the cost of processing plastic is greater than cash.
Set up Your Account and Terminal Correctly
Sometimes, a simple mistake can lead to higher credit card processing fees. Stay away from this by making sure you POS provider sets up your account the right way. If your account is set up incorrectly, you risk getting higher processing fees from providing the incorrect business information. Also, do your batch process every day, it is more cost effective instead of every few days or a few times a week. Don't wait, because the longer you wait to process, the higher the fees and rates.
Ask A Credit Card Expert
We know most restaurant owners know very little about credit card processing, you’re concerned about making good food and giving great service. Get a better understanding and have a trusted advisor by your side by consulting a credit card processing expert. May times, your POS provider can help dispel credit card processing myths. Also, their knowledge and relationship with processors can also help you get lower rates for your business.
Topics: Credit Card Processing