The Free Terminal program
Ever hear the old phrase “Nothing is for free?” Every day we are given “free” offers from numerous fast food chains, restaurants, and more. Now think back to whether you’ve ever heard the phrase “Buy none, get one.” Or, “Free small coffee, no purchase required.” Doesn’t happen too often, does it?
While researching merchant account services providers and equipment you must certainly have seen offers for free terminal deals. But before you walk into a trap, ask yourself the following questions:
What is the contract or termination fee? Always ask for the schedule of fees and the program guide to make sure that neither the provider nor the back end processor has a contract or termination fee. When you’re locked into a contract, you might be paying for that “free” credit card terminal with increased rates every three months or a surprise “added” annual fee. Merchant Warehouse has no contract or termination fee, which means that A) We have every incentive to keep you happy and processing with us for a very long time, and B) We can’t arbitrarily raise our rates or provide lousy customer support, since it is so easy for you to leave us.
What kind of terminal are they giving me for “free”? Our site is a good point of reference for you. Since we buy all of our equipment wholesale, we can offer credit card terminals at guaranteed lowest prices. So, if you are a new business being promised a “free” terminal that is worth hundreds of dollars on our website, that should raise a red flag. If you own a fine dining establishment, would you run a promotion where you’re giving away free lobster tail and filet mignon?
What happens if the terminal breaks? If you read the terms and conditions, you may find a hidden clause that states if the terminal breaks you have to wait weeks while it’s being repaired. Merchant Warehouse’s free terminal program includes overnight replacement insurance. If you drop the terminal, spill something on it, or it’s struck by lightning, we overnight you a replacement, no questions asked.
What is the condition of the equipment you are purchasing?
Is it new or used? Merchant Warehouse only sends out new units for our free terminal program that are programmed and tested in house before it gets to your door.
So remember, if a deal seems too good to be true, it is. Make sure you are getting the best package deal, because when you think about it, if you walk into a car dealership and try to get something for free or with no strings attached, you’re likely to end up with a piece of junk that breaks down on the highway.
Shannon Andrade - Account Executive
Shopping for Credit Card Processing rates
“Give me your best rate!” Those are the words that any Sales Rep in the merchant service industry will agree are by far the most dreaded. Upon uttering those 5 words, it is almost certain that the conversation is headed down a dark road. But I have to say, I don’t often blame the merchant; IF they can remain malleable to hearing me out.
When a merchant starts “shopping” for credit card processing, they are drawn to a company’s site by numbers. Whether it’s a discount rate or a terminal price, the merchant will click on the lowest number they see on their Google search page. What the merchant doesn’t know is that, 9 times out of 10, the numbers they see are most definitely not what they are going to get.
The notion of “what you see is what you get” does not apply to the merchant service industry in most cases. So when a merchant tells me flat out to give them my “best rate” I try to back them up about 10 paces and explain to them that a merchant account is made up of many more elements than one single rate, and it is crucial that they look at each and every rate and fee for all the companies they are researching. I tell them they must take the time to do a TRUE “apples to apples” comparison to in order to truly assess which company has the best overall deal.
Chances are good that the company who offered them a 1.18% has a $25 monthly minimum and a 3 year contract with a $200 early termination fee. It frustrates me to see how many merchants take these “low rate” numbers at face value and end up getting burned.
In summation, I encourage merchants to “shop around” as long as they are doing so from an educated place where they ARE looking at the whole package and are not staying fixed on one rate, using that as their basis for comparison between companies.
Erin Leddy - Account Executive
The Educated Sales Rep
Throughout my 2 years working in this industry, I have noticed a few common threads that have remained unchanged over the years: Merchants do not WANT to accept credit cards, and furthermore, don’t have TIME to spend researching processing companies. They want a quick fix and easy fix. But I have seen this industry change more rapidly in the past 3 years than any other industry, and merchants are having a hard time keeping up.
By the time a merchant calls in to Merchant Warehouse, chances are he/she has spoken with 2-3 credit card processing companies and has been told 2-3 completely different things. Most of the time, it seems like competitors will throw a lot of numbers and “deals” at the merchant without backing any of it up with facts or statistics. These competitors only know how to “sell” but know nothing of the merchant account industry itself. By the time the merchant gets to me, he/she is more scared to accept credit cards than ever before.
On a typical incoming sales call, the merchant arrives already frustrated, confused, and extremely guarded. Luckily, when I started working for Merchant Warehouse, I spent 8 full weeks in training before I ever touched a phone, and every Friday morning the Sales Team gathers for a weekly meeting with the Executives to discuss industry changes. – This IS an extremely competitive industry, and as Merchant Warehouse reps, we are required to know what we are selling, and who we are selling to.
I am able to educate the merchants who come to me knowing nothing about any of this “credit card stuff” and I have found that there are very few questions I can’t answer – even for the most educated merchant! One would be surprised at how many merchants I’ve talked to who say, “Oh, I never knew THAT” “Thank you for telling me that; the other guy I talked to never brought that up.” “No, he didn’t explain this to me; I totally get it now!” The call ends with a happy, educated merchant who, 99% of the time will come back and set their account up with me.
The best part about feeling knowledgeable is that I get to relax when I’m on the phone with a merchant. Then they, in turn, also feel relaxed, and pretty soon we’re debating about who’s going to clinch the division title this year… (That’s baseball for you non-sports fans!)
Erin Leddy - Account Executive
Factors to Consider When Choosing a Merchant Account
There are several factors to look at as well as traps to avoid when choosing the best merchant account for your business. This article should help guide you in making the best choice for your business when choosing a merchant account.
Suspiciously Low Rates
- Make sure the rate you’ve been quoted is for the type of transactions you’ll be processing. For example, many mail order merchants have mistakenly signed up for a retail merchant account with low rates and found themselves getting charged much higher fees because they were not swiping their customers’ cards.
- Ask whether the rate you’ve been quoted is an introductory rate. Some processors automatically raise your rates after an initial period, resulting in unexpected credit card processing costs down the line.
Average Ticket and Monthly Volume
- Every processor will ask you to estimate your average sale and monthly credit card volume. This, in part, allows the processing company to determine the level of risk they are taking by extending you a merchant account. If you estimate far too low, you may run into trouble, as you are now a higher risk than the processor initially estimated. On the other hand, if you guess far too high, you may be required to file some extra paperwork and provide significantly more business or personal credit-related materials. Talk it over with your account representative; he or she should have plenty of experience estimating volumes and average tickets.
Understanding Fees
- When you first get a quote for merchant accounts, some fees may seem a bit confusing. Take the time to go through your application and ask questions about the fees you don’t understand. Taking the time to go through the fees may prevent unpleasant surprises when you get your first merchant statement. Remember, a quote is not the same as a statement of fees. Many quotes do not list all possible fees, so make sure to do your homework and get the statement of fees.
Contracts & Cancellation Fees
- Before you even set up a merchant account, ask for details on how you would go about canceling. Is there a termination fee or time commitment? Some processors may have contracts for their merchant accounts that automatically renew if you don’t give written notice more than a month before your contract expires. Also, beware of claims such as “even though you have a fee in your contract, we never charge it.”
- Not all processors require a contract, so unless there are some special circumstances, it is usually best to go with a company that is flexible and doesn’t require you to make a long-term commitment. Think of it this way: if you can cancel your merchant account at any time, a good company will work hard to keep you a satisfied customer.
Customer Support
- Many companies use the same employees for sales, account service, and technical support, or worse, don’t even have an internal support staff. A company that has dedicated departments for each will be able to offer you expert help, whether you have questions about your statement, or need to get your terminal back up and running in a hurry.
- A processor that offers 24 hour support will be there whenever you need them, meaning you won’t be at the mercy of someone else’s business hours. 24 hour support is also a good indicator of the company’s commitment to its customers beyond the application process.
Find more information about merchant accounts in our Merchant Account Resource Center.
Defining the Different Merchant Account Types
In the payment processing industry, every merchant is classified into a specific “merchant account type” category, based on how they collect card information and conduct transactions. To learn which category your business is classified under, we have defined the characteristics of each merchant account type in this article. There are two main merchant account type categories, “Swiped” and “Keyed,” which reflect the basic methods used to capture card information. Within these main categories are sub-categories, broken down according to the business environment and processing technique.“Swiped” or, “Card Present” merchants directly interact with their customers face-to-face and capture card information by physically swiping cards through a terminal or point-of-sale system. The sub-categories within this group include:
- Retail Merchants: “Retail” merchants typically conduct business in a storefront or office where they interact with their customers face-to-face and physically swipe cards through a terminal or Point-of-Sale system.
- Restaurant Merchants: “Restaurant” merchants require the ability to add tips to their charges (Note: Restaurants that do not process tips are still considered “Retail” merchants in this industry). Using a special tip function, they authorize a customer’s card for a certain sale amount and then settle that authorization with an adjusted price to include the tip amount.
- Wireless/Mobile Merchants: “Wireless” or “Mobile” merchants need to accept and authorize cards wherever they are located, which is usually on the road. Using a portable wireless terminal, these merchants process on-site, real-time transactions at their customers’ locations.
- Lodging Merchants: “Lodging” merchants (e.g. Hotels, Motels, and Bed & Breakfasts) authorize a customer’s card for a specific sale amount and, depending on the customer’s length of stay, will adjust and settle out that authorization a day or more later to include additional fees such as taxes, etc.
“Keyed or, “Card-Not-Present” merchants indirectly collect their customers’ card information, and, depending on the business environment and technology used, can process transactions in various ways. The sub-categories within this group include:
- Keyed Face-to-Face Merchants: “Keyed Face-to-Face” merchants eventually meet their customers in person to deliver the product or provide the service, but they don’t actually collect card information with the customer or card present. Generally, they take orders over the telephone, via fax, mail, email, or the Internet, and then manually key-enter card information into a terminal, software, payment gateway, or other point-of-sale system.
- Mail Order/Telephone Order (“M.O.T.O.”) Merchants: “M.O.T.O.” merchants rarely, if ever, meet their customers face-to-face. Instead, these merchants collect orders and card information over the telephone, by mail, fax, or via the Internet, and manually key-enter transactions through a terminal, software, payment gateway, or point-of-sale system. Then, once payment for an order is confirmed, the product is shipped for future delivery.
- Internet or E-Commerce Merchants: “Internet” or, “E-Commerce” merchants conduct all business through a website, so all card information is collected and transactions are processed online, in real-time, using a payment gateway that’s built into their website’s shopping cart. So, once the order/sale is confirmed, the card is charged instantly and the product is shipped for future delivery. (Note: This merchant type does not apply to businesses that only market on the Internet, but do not immediately process payments via their website, upon order confirmation.)
For more information about this or any other topic, please contact Customer Service at (800) 941-6557.
Chosing a Merchant Account - Discover the Difference with Merchant Warehouse
Merchant Warehouse has offered great rates and service for credit card processing services and merchant accounts for every type of business since 1997. More than 30,000 merchants later, we now set the standard for price, customer service, ethics and integrity. Whether you’re a small business or a large enterprise, you can expect:
24/7 Toll Free Customer Service
At Merchant Warehouse, we have invested in dedicated departments for both account service and equipment support. These in-house teams will do whatever it takes to keep you up and running with as little down time as possible.
Besides our top notch internal team, our network of service providers has over 900 customer service representatives ready to assist you with your merchant account at any time.
Real-Time Account Access
Many merchants want more access to their accounts than just getting a statement once a month. Our merchants can get online merchant account data, including transaction summaries and batch detail reports, meaning no more waiting for statements to balance your books!
No Down Time
A state-of-the-art-network ensures your credit card processing transactions go through when you need them to.Peace of Mind
Our expertise and personal service allow you to run your business without worrying about your merchant account or your credit card processing services. Most importantly, since we don’t require contracts and don’t charge any termination fees, you can trust that we will constantly do anything we can to keep you satisfied.
Your satisfaction is our top priority. We’ll give you an honest review of competitive quotes or offers — whether you choose us or not!
Benefits of a Merchant Account
With cash less commonly carried, and checks gradually becoming obsolete, credit and debit cards have completely revolutionized the industry, becoming the most common forms of payment. The majority of merchants world-wide are now accepting these cards because of the benefits of a merchant account, and to maintain your business’ competitive edge, you should accept plastic too. After all, you could be missing out on more than just sales…. By accepting credit cards, you get all the Benefits of a Merchant Account:
- Boost sales and improve customer satisfaction by allowing customers to choose their preferred form of payment.
- Increase your average sale because the customer doesn’t need to have the cash on them.
- Speed up the check-out process with efficiency and convenience.
- Protect yourself from potential losses caused by bad checks.
- Avoid the risk and inconvenience of having large sums of cash.
- Accept payments from virtually anyone, anywhere.
By providing alternative payment options to cash and checks, a merchant account can be extremely advantageous for any business. Although some merchants tend to hesitate in signing up for a merchant account due to cost factors, the loss in sales and profits may be far more costly. The fact is, besides all the other benefits of a merchant account, people tend to spend more money when paying with a credit or debit card than when paying with cash. By accepting these payments, your increased revenue will compensate for more than just merchant account costs. So, to make your business more successful, take advantage of the benefits of a merchant account, and accept credit cards today!
To learn more about the benefits of a merchant account, click here or call our Sales Department at 800-941-6557. You can also find more information about merchant accounts in our Merchant Account Resource Center.
Reasons to Avoid Credit Card Terminal Leases
Businesses often look at leasing as a viable alternative to purchasing high priced equipment. After all, not many small businesses can foot the bill for a $15,000 color copier. But would you lease a $200 cell phone or a $300 cash register? Of course not! So why do some businesses lease $150-$300 credit card terminals?
Most credit card terminal leases involve a 48 month term, and at least $20 a month. That totals $960 in payments! If you buy this same terminal for $160 from Merchant Warehouse, and charge it to a credit card, you could have it paid it off in nine months, with interest, for the same $20 monthly payment.
The Games Lease Providers Play:
Most merchants are given inflated costs to make them more inclined to lease. For instance, some companies will say a terminal, which costs $160 at Merchant Warehouse, costs $500. With no frame of reference, many new customers will simply assume this is accurate, but may not have the cash or credit for that amount. Also, some companies claim tax advantages to leasing. This is simply false. It is true that lease payments are deductible, but any business purchase is deductible. Would you rather deduct an expense or have the cash in your pocket?
That’s not the only bad news. Here are a few more facts about leasing credit card terminals…
- Credit Card Machine Leasing Contracts are Binding
- Regardless of your circumstances, you cannot terminate the lease before the term ends.
- You Have to Return the Equipment
- After you spend your $960, you then have to return the terminal
- Leasing Has Costly Strings Attached
- Terminal leasing companies sometimes continue to charge monthly fees beyond the contract term unless you contact them to cancel.
- Equipment insurance is required for all leases, adding to monthly fees.
Don’t get stuck in a long-term leasing contract while paying far more than necessary to process credit cards. Save money and avoid the hassles of leasing—Click here to see our wide selection of Credit Card Machines.
5 Ways to Save on a Merchant Account
Although accepting credit card payments may seem like a costly business expense, it certainly doesn’t have to be. Following are five ways you can save money on your merchant account, and avoid frustrating traps.
- Never Focus Exclusively on Percentage “Discount” Rates.
- Companies who quote extremely low rates are usually trying to distract you from additional fees they charge that can have you paying much more in the long run.
- Thoroughly assess each quote and consider the many other cost factors, because getting the lowest rates doesn’t necessarily mean that you’re getting the best deal.
- Look to Save on Processing Equipment.
- Most equipment can function with any processor, so there are plenty of product and pricing options to choose from.
- Shop around to find the most suitable solution for your budget and processing needs.
- Never lease. Leasing is extremely costly, and involves long-term agreements.
- Don’t Sign a Contract.
- Signing a contract commits you to staying with a processor regardless of your level of satisfaction with them.
- Contracts allow processors to increase your rates at any time.
- With contracts, some processors feel that they can neglect to provide the service you demand.
- Canceling in the midst of your term means paying a steep termination fee.
- Avoid Termination Fee and Reprogramming Fees
- Some companies may not focus on developing a long-term relationship with you and instead, rely on a Termination Fee to keep you from leaving.
- To some processors, a Termination Fee may be more profitable than providing the service necessary to keep merchants satisfied for years. They may actually prefer that you cancel so they can collect the huge fee.
- Many processors use scare tactics, to convince you to purchase or lease their equipment. They threaten that if you buy equipment elsewhere, they “need” to charge a reprogramming fee.
- Truth is, most reprogramming procedures are simple and inexpensive, regardless of where equipment is purchased.
- Ensure You Have the Right Type of Merchant Account for Your Business.
- There are different types of merchant accounts based on the way credit card transactions are accepted. It is always cheaper to have the right merchant account type for your business.
- Always work with a firm that can explain the differences between the different merchant account types and that teaches you to process credit card payments the best way for your business.
Merchants should always look for the best overall pricing, while not neglecting the service they deserve. By referring to these 5 guidelines when shopping for a merchant account, you can find a merchant service provider who will give you everything your business is looking for. Learn more about merchant accounts in our Merchant Account Resource Center.
Does My Business Need to Accept Credit Cards?
In today’s competitive marketplace, it is almost a necessity for any business to accept credit cards. 80% of all retail customers pay with their credit and debit cards, and they will go to one of your competitors if you don’t accept credit cards.
To accept credit cards, what you need is a merchant account. Companies, such as Merchant Warehouse, give businesses the ability to accept credit cards as well as debit cards, smart cards, and electronic benefits transfer (EBT) by providing them with merchant accounts.
When you call or complete Merchant Warehouse’s online form to request a merchant account, you will be assigned a sales representative. He or she will ask a few questions about your business, and answer any concerns you might have. Your application to accept credit cards will then be submitted for approval. Merchants are typically notified of approval or decline within 24 hours of submittal.
Once the submitted merchant account is approved, your assigned sales representative will contact you immediately. Any credit card equipment ordered will be directly shipped to your business site so that you may immediately begin to accept credit cards.
If you would like to accept credit cards, fill out this simple form to request a merchant account from Merchant Warehouse.
For more information on how to accept credit cards, visit our section on credit card processing. You can also learn more about merchant accounts in our Merchant Account Resource Center.