Common Lies You’re Told About Your Merchant Account
Tell me if you have heard this one before. A guy wants to buy a used car. A used car for sale catches his eye and of course he wants to know more about it. He asks the salesman questions like, “has it been well maintained”, “has it been in an accident”, “do the brakes work”. With every question, the salesman reinsures the guy that everything works. The car runs great and it has had no issues or accidents. The guy hands his hard earned money over and drives off. The next day, the car won’t start. The power windows stop working. The repair shop says the brakes need to be replaced and after looking up the VIN #, the guy discovers that the car rolled into a lake 3 years ago. The guy wants his money, back but the salesman has disappeared. Now he is stuck with a lemon. All because of the common and unethical sales practice of “telling the customer what they want to hear”. This same unethical sales practice is often used to get your merchant account. And guess what? it works.
How It Happens
As a small business owner, you will come across this. It works like this: you’ve been taking credit cards with the same merchant processing company for years, it could even be the same company that does your Point Of Sale system. You know this company. You trust this company. Then, a credit card guy walks in off the street and tells you that he can save you money on your credit card rates. He then asks to see a current merchant account statement from the merchant processing company you’ve been working with. This is when the theatrics will start, he will scan the lines of the statement with a mixed expression of shock and disgust, wholeheartedly selling the “fact” that you are being egregiously ripped off by your current merchant processor. He may even jot down some fast and dirty math, with some questionable rounding, in an attempt to “show” you how much he can save you each month. At this point he may push the conversation to several different places. Like asking you to sign some preliminary paperwork to get the ball rolling. IF you decide to change to his merchant processing or ask for the name and number of your current merchant processor to inquire what it would take to switch it over. He will make it sound so quick and easy, possibly try to vilify your current merchant processor when they raise questions. All this to get you to switch your merchant account to their company, while truthfully saving you no money or even giving you higher rates, and then disappear back onto the street, never to be seen again.
There are obviously several ethical issues here. For one, nothing will come from letting them contact your merchant processing company. They are not the customer. You are. Talk to your merchant processing company yourself. You can always ask for a rate review. If they ask you to sign “preliminary paperwork”, DON’T. If they claim it’s to just get some info about you and your company, they are straight up lying to you. That “paperwork” isn’t just getting your contact info but will often consist of a Dealer Change Form. If you sign that and then end up not changing your merchant processing to them, you will create a huge problem for both you and your merchant processing company. What will happen is when you call your “current” merchant processing company with an issue or question, they will not only be unable to help you but they will no longer be required to help you. You will have to request another Dealer Change Form if you want help from your Merchant Processing Company. When you give the guy off the street your current statement, you are creating an unfair business advantage for him. No matter what your rates actually are, he will ALWAYS ALWAYS exclaim that you are being ripped off. If you want an honest rate quote from him, don’t give him your statement. Tell him your average credit card transaction and monthly credit card sales and ask for his best and lowest rate. If he says that he still can’t give you his rate; huge red flags!! Show him the door! Of course, the bottom line to all of this is trust, or lack thereof. Why would you trust some random guy you’ve never met before over a company you have been working with for years? Is it only because he is claiming you have a huge problem then telling you what you want to hear? He will say anything he thinks you want to hear to get you to switch. He uses that same tactic in every small business he walks into, he does it over and over again, so much so that he could do it blindfolded and still claim he can save you money on your merchant account.
As always, we are here to help. Let us know if you have any questions.