By Elie Y. Katz, President & CEO, National Retail Solutions (NRS)
Merchant service providers are essential for retailers and businesses. They let stores take credit cards and other payments, making shopping easier for everyone. But not all providers play fair. Some use sneaky tricks to overcharge businesses and lock them into bad deals.
Understanding these tricks is vital. We’ll uncover the most common ways these providers mislead businesses. We’ll also give you clear steps to protect yourself. Don’t get fooled – learn to find a provider who puts your business first.
Hidden Fees & Misleading Pricing: Some providers lure you in with low rates, then surprise you with extra fees for security or monthly minimums. They might use tricky pricing that makes it hard to know the actual cost, such as burying fees in complex statements or charging different rates for different types of transactions. These hidden costs can quickly add up and significantly impact your bottom line.
Early Termination Fees & Long-Term Contracts: Watch out for contracts that lock you in for a long time. If you want to switch providers before the contract ends, you could face hefty fees, making it expensive to leave even if you’re unhappy with the service. These fees can sometimes negate any savings you have had from the provider’s initial rates, and can even reach hundreds or thousands of dollars.
Equipment Leasing Scams: Some providers push you to rent expensive equipment you don’t need, promising that it’s essential for your business. They might hide extra costs like maintenance fees or insurance, or lock you into long leases with complicated cancellation terms. This can trap you into paying for equipment you don’t use or can’t afford, creating a financial burden for your business.
Misrepresentation of Services: Be careful of providers who promise things that seem too good to be true. They might say you’re guaranteed to get approved or that they have the lowest rates, but it might not be true. They may also overstate the capabilities of their products or services, leading to unmet expectations and potential financial loss for your business.
Inadequate Customer Support: Some providers don’t offer good customer service. When you need help, it’s hard to get ahold of them, or they don’t solve your problem. This lack of support can be incredibly frustrating, especially when dealing with urgent issues like payment processing errors or chargeback disputes, potentially costing you time and money. In the worst cases, unresponsive customer support can leave your business vulnerable to fraud or security breaches without the necessary assistance.
Bait-and-Switch Tactics: Watch out for providers who offer great deals first, then change them later. The low prices or good terms might disappear after you sign up, replaced with higher fees, stricter terms, or less desirable services. This can leave you feeling trapped and frustrated, as you’re now stuck with a provider who doesn’t deliver on their initial promises.
High-Pressure Sales Tactics: Be wary of providers who pressure you to sign up quickly, using tactics like limited-time offers or scare tactics about missing out on a deal. They might not give you time to fully consider the terms, compare other options, or consult with advisors. This pressure can lead to hasty decisions you may later regret, as you might end up with a service that doesn’t fit your needs or budget.
Protecting Yourself
Don’t rush into signing anything. Take the time to read all the fine print in contracts and agreements. Look out for hidden fees, confusing terms, or anything else that raises red flags. Don’t be afraid to ask for clarification if something doesn’t make sense. Remember, it’s your money on the line.
Do your homework and research potential providers. Check online reviews from other businesses and see what they have to say. Compare different providers to see who offers the best combination of features, prices, and customer service. Don’t hesitate to ask questions and negotiate for better terms. These steps allow you to find a trustworthy provider who will treat your business fairly.
Conclusion
Choosing the right merchant service provider is essential for any business. Following the tips in this article, you can protect yourself from dishonest providers and find a reliable partner to help your business grow.
National Retail Solutions (NRS) operates the leading point-of-sale (POS) terminal-based platform and NRS Pay credit card processing solutions for independent retailers and bodega owners nationwide. With over 30,000 active POS terminals in stores, NRS provides cost-cutting merchant solutions including no hidden fees, no long-term contracts, and a free credit card reader. Our multilingual experts can help you find the right solution for your business.
