$500 Rate Guarantee If We Can’t Beat Your Current Payment Processing Rate! Why Not?

Misleading Credit Card Junk MailJunk Mail OfferI’ve often referred to the marketing gimmick in payment processing that offers a $500 reward if they can’t match or lower a merchant’s credit card processing rate.  Imagine my surprise today when I was going through my business junk mail that I got one of these offers sent to me!  I couldn’t help but laugh that a large bank and their credit card processor sent their rate solicitation to me, but I think it’s obvious that they are doing an indiscriminate mass mailing to every business in Bloomington Normal and probably most of Illinois.

So today, I thought it would be a great opportunity to examine this ‘guarantee’ that is very common in the merchant payment processing arena.  I would like to begin by saying that the offer itself is not dishonest.  I think from a purely marketing standpoint it can be quite advantageous for a company to put together such an offering.  And apparently this gimmick must work, because I see it repeated so often.  What I haven’t actually seen is anyone collect on this type offer!  It reminds me of a carnival game where a huge prize is offered, but the game is rigged so that practically no one will win!

How is the game rigged, you ask?  In order to qualify for this offer, you must first provide a recent credit card processing statement.  With this statement in hand they can undercut your current rate as much or as little as they wish.  The only guidelines they will have is that the rate must be somewhere between interchange and your current rate.  EVERY merchant service provider (myself included) has the same cost with interchange.  Any rate provided under interchange cost would be costing the current provider every month, so it’s a 100% safe bet that the current rate will be above interchange.  Even if the margins are slim, this special offer needs only to match the current rate in order to avoid paying out the $500.  I have actually witnessed accounts that were priced at very, very close to being actually at interchange, but that was only when there were other special circumstances involved.  Even with an account at interchange, they can offer a match to avoid paying the $500 reward, knowing full well that no one would go to the hassles of switching a merchant services for no savings.  Especially to a company that is touting it’s rate as their primary selling feature.

Under these terms, I also can offer $500 if I can’t match or beat a merchant’s current rate!  Why stop there?  I’ll double it!  No better yet, I’m so confident that I can match or beat any rate out there, I’m willing to offer the merchant services industry’s first $2500 rate guarantee!

And I can do that, very easily and I know there is little risk that I’ll end up having to actually pay out the $2500.  But here’s what I don’t like about this offer and why I don’t advertise it like many competitors.  I believe it’s the lowest form of rate peddling because they aren’t even offering a rate.  They are only promising to slightly beat your current rate, after they see what it is!  In my experience, many times I’ve shopped for a vendor to work with, whether it’s for work around the house, a large product purchase, such as a car or any service.  I’ve found that the lowest priced option has certainly not been the best value.  In fact my personal worst horror stories, that ended up costing me the most, were from the lowest price quotes.  I want to provide a solid value to my customers that goes beyond a low price.  Although my pricing is as competitive as any in the market, it’s far more important to provide overall value and service for my customers.

So, some big organizations might advertise a low rate.  I won’t make that my only selling point.  There are many reasons why Cornerstone Business Solutions is the best choice for merchant services.  I will continue to offer service that has my customers raving about me.  I’ll be the professional that offers the solutions to increase business efficiency.  I’ll be THE point of contact a merchant can get ahold of when he needs me.  And the best part is, it won’t cost more, because there is much more to credit card processing than a rateBut I will not advertise my service as the cheapest!

Another issue that bothers me about these type of offers is that they are more concerned about beating the rate, however slightly, than looking out for if a change is actually good.  Is it worth the hassle?  Are they going to really recommend you leave for a few dollars a month?  Will they still have the best rate after they get you to change?  Will the service stack up?  Will they be charging for equipment and what will the warranty be?

I also want to offer some advice for those that actually do follow through with these types of offers.  As I’ve mentioned before, there is much variation in merchant services statements.  This can make them difficult to read.  When a merchant does get a quote, they will generally get an analysis showing the savings.  These analysis are designed to show maximum savings, so make sure that the person doing the analysis has the credentials (such as a Certified Payment Professional) to do an honest and accurate assessment.  The math needs to be checked line by line for accuracy.  Make sure accurate information is pulled from the old statement and make sure that the rates they offer are the same rates used on the Schedule A of the contract that they want you to sign.  It’s critical to check the entire contract to find the additional fees not mentioned in the rate comparison.  Then, when the first statement comes, check that you are actually receiving the rates promised.  I’d recommend these statements continue to be reviewed every six months at a minimum to see if they’ve changed.

I know that representative’s that are employees of such organizations have the interest of their employer first.  They are often under quotas and pressure to ‘close deals’.  This means that a merchant can expect pressure and sales tactics to switch even if it isn’t in the merchant’s best interest.  I am not an employee and it’s always been my philosophy to put the business owner first.  In my opinion, my employer and first loyalty is to the business owner.  I have no quotas or pressure and my moral compass guides me to build my reputation, first and foremost.  Many times when assessing a merchant situation I’ve walked away from business that I didn’t feel was a big enough win for the merchant.  It’s truly my goal to help people out first and foremost.  A lot of times it means I’m providing their payment services and other times it means I’ve helped out another way.  In my opinion it’s part of being a professional, not a rate peddling salesman.

As a side note, when I stopped to think how many of those mailers must be sent out just to end up in the trash, I just picture a forest being hacked down.  It reminded me of an old phrase that was once a popular email signature and I think it’s appropriate here.  “Although no trees were killed in the creation of this article, many electrons were horribly inconvenienced!”


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  1. I love this information Robert. This is good for people to understand in any industry. Price is temporary, value is long-term. Gimmicks may get people in the door, but if they are just gimmicks, trust and credibility will be lost and so will the business.

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