Processing Fees: Accepting Credit CardsACCEPTING CREDIT CARDS is a necessary part of doing business, but the quality of service and your fees can vary depending on your vendor. As a sales team leader with North American Bancard, Stacey Joseph helps salons, as well as independent stylists, dramatically lower their credit card processing rates. Here, she tackles questions regarding credit card processing fees:

ST: What should salon owners be aware of when it comes to credit card processing fees?

Joseph: “Two of the major issues that both salon owners and booth renters run into with credit processing is they are paying very high processing rates as well as not getting free credit card processing terminals that are of the latest technology and PCI Compliant. For example, we offer free equipment as long as you are processing your credit cards with us. Another situation to be alarmed about is companies that send a broker to your location who in turn, has to be paid for that visit indirectly. Your fees are guaranteed to be higher than usual because your cards are then being processed through a third party. You want to be with a direct processor who gives you a national wholesale pricing program and free equipment.”

ST: What is the current range of standard rates, and how should an owner negotiate if their rate seems higher than that?

Joseph: “Standard industry base rates are between 1.50%-2.00% as a base rate, but being in the industry for so long, I notice that many merchants are paying a teaser rate and their surcharges escalate to more than 3.00%. Some companies will not negotiate with you as a current client. In cases like these, I always suggest weighing your options with a more flexible company who is willing to work with you. Don’t think because you are paying high rates with one company, it will be that way with every company.”

ST: Some salons allow clients to include tips on credit card transactions while others won’t because they don’t want to be responsible for the processing fees for the tip portion. Have you seen any creative ways for salons to deal with this issue and keep clients happy?

Joseph: “I would suggest that salons accept tips in any form they come in. Most people carry very little cash, and a stylist is more likely to receive a larger tip when a client is using a credit card than when they pay with cash. But it can be another downfall with a credit card processor that doesn’t understand the needs of a salon and therefore doesn’t set you up properly. With high-speed wireless dial-up terminal and smart phone processing you can include a tip line without having to pay an excessive fee.”

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