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SEARCHCredit card processing fees eat into profit.
Not too long ago, Erin Snyder Dixon, owner of Extremities Spa Salon in Newport News, Va., noticed her credit card processing fees were rising and beginning to eat into profits. “I explained to clients how credit card processing works,” she says. “I asked them which would be a better option for them: ceasing the credit card option for a while or a price increase. The overwhelming response was to ditch the credit cards.” And she did.
Since then she’s saving about 6% of total tickets, she reports. “That includes everything — machine rental, processing, and fees.” She maintains a backup option for clients to pay through Paypal. “The fees are lower and I only pay for it if I use it,” she says. “Not having to reconcile a virtual terminal also has saved me time and I never have to worry about chargebacks.”
While she’s open to revisiting the idea of credit cards when the economy picks up, she’s pleased with how things are going. “The clients have not stopped buying retail, our numbers are up, and none of the doom and gloom the credit card company prophesied has come to fruition.”
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