How to Screwed: Think Your Rate is FOREVER

Customers pay you with credit cards and debit cards. Plastic. You're screwed. Sorry.

Let me readjust that... You're screwed if you don't know. Let's change that. When you sign up for a merchant account, your rate is not, repeat NOT locked in. Sorry. That account can change at any time. Have Stripe, Square, or PayPal. Sorry. You agreed to their terms of service. They can and do change the rate.

The Bible says that even a prophet doesn't get honor in their home village, and I am no prophet. So, when I explained to my father who owned several businesses that I should look at his rate, he did not immediately do it. Commiserate with me. How many parents would NOT let their children who were in an industry do a competitive quote? Mine had to be pushed. 2 months. I was ready to have a Dateline-level event and hide his body, but he finally got me his statements. He was very proud of them.

$2 grand.

What?

$2 grand. You're overpaying at the small store $2,000 a year.

"That can't be right. I argued that rate for months", he told me. Yes, but you didn't sign a lease on an apartment. You signed a merchant contract that says if a fly anywhere in three counties breaks wind, your rate can go up. And it did. Over and over. In fact, his rate had gone to 3.1% for a Retail location. At the time, that was the beginning rate for adult material (something my form won't even handle). Still, in less than a year and a half, his rate had gone up more than 160 basis points.

A basis point is 1/100th of a percent. If you have a rate of 1.7% and it climbs to 1.71%, you've gone up 1 Basis point.

Sometimes a little knowledge is all you need. Kind of like knowing that Donald Duck's middle name is Fauntleroy in a trivia contest. KNOWING your rate can and does change makes you sharper, and like from the book Dune, the first step in avoiding a trap is knowing of its existence.

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Doing Good Is Good Business

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