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Credit Card Processing – Deceptive Sale Tactics

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Jun 27, 2019

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The world of credit card processing is designed to be a deceptive and lucrative industry. There are hundreds of different tactics sales representatives will use in order to onboard an account or keep an account on their books. Just because an outside sales agent answers your phone calls and tells you your business is priced appropriately does not always tend to be the case. 

Below are just a few of the recent tricks we have seen in the last week,

  • We negotiated a large apparel shop from a tiered pricing structure to an interchange plus pricing structure of 0.05% +$.05 per transaction which resulted in significant monthly savings. A quarter later, while we were auditing the account we noticed the pricing structure had increased by almost 1%. When we reached out to the sales rep in order to issue our client a refund and reduce the fees to they claimed our client signed a rate increase form. Obviously no one would ever sign a rate increase form. This sales rep had forged our clients name in order to increase the monthly pricing so they could make more money. Something like this can be very easy to go unnoticed. 

  • “You will be receiving a flat rate of 1.58% + $.15 for a credit card and 0.35% + $.15 for a debit card.” While this may hold true for a small percentage of your transactions it rarely tends to be the case. In a scenario like this, the sales rep is offering you a tiered pricing structure but not completely telling you all the fees. A tiered pricing structure has various buckets that the card could end up falling into. These buckets usually looks something like a qualified, mid qualified and non qualified bucket. Any card that falls into the mid and non qualified bucket will be surcharged over the “1.58% + $.15 flat rate.” A structure like this the all in cost tends to be over 3%.

  • The biggest and most deceptive sales tactics we see in the industry have to deal with leasing equipment. If there is one suggestion our team could make to anyone looking to lease any equipment is do a significant amount of research. A lot of these leasing companies call businesses acting like their rates are going to increase and they need to act immediately. They are extremely pushy in getting you to sign an extended contract that there is no way out of. Before signing any lease or sending over any documents do all your research on how much the equipment cost without a lease, who you are leasing it from and how you would be able to cancel if you ever wanted to.

At the end of the day credit card processing reps typically make money off residuals. This means, the higher they sign up your business, the more the fees increase overtime the more money that goes directly into their pocket.

If you are looking for an unbiased reviews of your statement reach out today. We have no affiliation with any credit card processing company and would never look to switch your existing processor or equipment. 

colin okeefe
By Colin O’Keefe

Prior to founding Merchant Cost Consulting, Colin worked in the payments industry for 3 years gaining an extensive knowledge of the ins and outs of the industry. During that time Colin learned how deceptive the industry can be and wanted to do something about it. Before joining the payments industry in 2014, Colin played professional baseball for the Los Angeles Angels of Anaheim. Colin is from Waterford, CT and received his BA in business from Virginia Tech where he was a member of the varsity baseball team.

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