Automotive dealerships operate in what is commonly known as a “high-risk” industry and thus they have complex needs when it comes to credit card processing. Despite this label, dealerships actually have the potential for exponential growth in terms of their customer base and revenue forecasts.
Most car dealerships have a busy sales environment that demands a reliable point-of-sale (POS) system but one that is also sophisticated enough to be able to handle often complicated, high-cost transactions and payment plans. Thus, it’s paramount that dealerships employ trustworthy merchant services in order to grow their businesses, especially since the automotive world is one of the most competitive industries out there.
Vendors need to carefully consider merchant services that include top-of-the-line payment options and perhaps even ones that offer marketing and customer retention tools. This is often a daunting task, but it’s possible!
Here’s the breakdown of merchant services for processing payment at your car dealership.
Knowing What You Need
As an establishment in the automotive industry, you might have trouble getting approved for a merchant account because you operate in a high-risk industry. In fact, finding a merchant service provider that will take you on or one that specializes in high-risk merchant services is often a tough task in itself. Ultimately, you know your business best and need a partner that understands the ins and outs of your day-to-day operations.
Whether you’re solely a car dealership or perhaps also offer automotive repair or paint and body work, you deal with many unique challenges every day. As such, it’s important for dealers to choose merchant services that are able to offer a full range of POS hardware and business administration solutions to make sales easier and keep cars moving off the lot.
It’s also critical for dealerships to be on the lookout for fair pricing, high-volume transaction management, and positive reviews from other merchants in the industry. Doing so will ensure that you find the best provider for your dealership.
Fees, Fees, Fees!
Despite dealing with very high-cost products, car dealerships often operate under a careful balancing act of buying incentives and potential profit. In fact, some economists even suggest that car sales are falling! However, the industry itself is always “shifting gears” in order to provide the best possible service (at the most optimal cost) to the public.
When it comes to processing payment at car dealerships, merchant service providers usually earn about one or two percent of a client’s sales volume, in addition to other fees. This margin influences how dealerships allow customers to pay for their purchases, such as partially on credit and the remainder of the balance via another method. These processing fees are part of what dealerships need to be on the lookout for.
In addition, there is always some kind of hidden fee that processing services will charge you for. Whether it’s administration fees or even paper mailing charges, hidden fees will probably appear on your bill. So, it’s important you understand what you’re exactly paying for and to reach out to your merchant service provider if you have questions or concerns.
Chargeback is the spectre that looms over “high-risk” industries. If a charge is contested in regards to your account, the credit card companies will immediately withdraw the disputed amount from your merchant account.
This is particularly risky in the automotive industry, where the base value of the merchandise is so high that a surge in chargebacks could potentially run the business into the ground. Thankfully, there is the option of chargeback protection when you negotiate your payment processing plan with your chosen merchant service.
Consider All-Inclusive Payment Processing Solutions
An all-inclusive merchant service may just be what you’re looking for if you want reliable, honest service that can help your dealership grow. All-inclusive means that companies pay a flat rate for their processing costs; there are no hidden fees in your monthly statements, and you are protected against chargeback.