4 steps to keep credit card costs in check

Suneera Madhani

Retaining as much profit as possible is a major goal for every restaurant owner, but the cost of processing credit cards and the fees they pay for merchant services may be taking a big bite out of their profits each month. There are many cost reduction strategies operators can seamlessly adopt within their credit card processing practices that will bring more money to their bottom lines.

Here are four steps restaurant operators can take to minimize their credit card expenses. 

1. Choose the most value-based merchant services provider. Increased sales are always a good thing, but a boost in sales also leads to a bigger merchant services bill at the end of the month. If you’re thinking there has to be a better way, you’re completely right.

The increase in your bill does not need to be nearly as drastic as it probably is. Many credit card processors have hidden fees and large markups that you end up paying dearly for every month. These fees can be listed as being for anything from statement fees to cancellation fees, but none of them are necessary. Do your research and look for a merchant service provider with transparency. The right processor won’t charge any unnecessary fees or high percentage markups and will be up front about every cost.

2. Avoid contracts whenever possible. We understand that contracts can sometimes be an unavoidable part of business. But make sure you don’t sign any contracts that are not completely necessary, such as one with a merchant services provider. Contracts often lock you into long-term agreements and charge you hefty cancellation fees if you ever want out. Why should you have to pay for a provider’s inability to deliver?

The answer is you shouldn’t. Don’t get stuck giving your hard-earned money to someone who doesn’t deserve it. By avoiding contracts, you’ll always be ready to make changes that will lead to bigger profits and a better bottom line for your business.

3. Invest now to save money in the long run. Sometimes, it takes a little bit of cash today to save a lot of cash tomorrow. For example, on October 1, 2015 there will be an EMV liability shift. EMV (Europay, Mastercard, and Visa) chip technology has quickly become the global standard for both credit card and debit card payments and allows for increased security and reduced fraud. After October 1, if there are any counterfeit card transactions made at your restaurant and you have not made the switch to an EMV-compatible terminal, you will be held financially liable. To make sure you don’t get stuck with any headaches or costly bills, you should make the switch to an EMV-compatible terminal well before the October 1 deadline.

In addition to saving you from any liability, you will also be able to bring the terminal directly to your customers if you switch to a mobile EMV solution. This means that you can have your customers enter their pin number right at their table and run their transactions as debit. The significantly lower interchange rates associated with debit cards will lead to a lower credit card processing bill for you and more profit for your business.

4. Stay in compliance. By keeping up to date with compliance regulations, you can stay ahead of the curve and save yourself a lot of time and money in the long run. An example of how just a few minutes can save you a good amount of money is making sure that you have completed your payment card industry (PCI) compliance questionnaire. By simply taking five minutes to fill out the questionnaire and ensure that you comply with industry requirements, you will not have to pay the yearly noncompliance fee imposed by credit card companies. If you find the right merchant services provider, that company should make sure you are not only aware of any compliance regulations or changes but also help you get them done painlessly and efficiently.

The common theme among all these strategies is that just a little bit of research can go a long way. Take the time to make sure you are getting the best, most transparent, services possible for the lowest price. Your restaurant’s bottom line will thank you.

Suneera Madhani is c.e.o. and founder of subscription-based merchant services provider Fattmerchant.