Nearly all North American customers prefer credit cards over cash for their payments, especially the younger generation. As a matter of fact, it’s been predicted that as of 2030, Canada will be well on its way to a cashless society with a 70 percent drop in cash transactions! While this statistic is impressive it’s also indicative of what our modern economy is like.
Credit cards offer customers flexibility, especially for major purchases like cars where the most affordable plan for them can be paid off in partial payments. Many automotive dealers would like to able to give their customers the option of purchasing a car via credit cards, but are unable to find a sustainable payment processing solution.
Some payment providers are looking to make an extra profit off automotive dealerships because they are high-risk merchants. The most crooked of providers take advantage of dealers who are new to payment processing and offer monthly statements that could give even financial experts headaches. But there is a payment processing solution out there that can modernize and simplify your monthly statements: all-inclusive pricing plans.
Streamline Your Monthly Statements
An all-inclusive plan is one that has the automotive dealer pay a single fee based off your monthly credit card sales volume. In exchange for paying this single fee your credit sales volume will be subject to an extremely low rate of 2.1 percent. The all-inclusive plan takes stock of the fact that as an automotive dealership you run a greater chance of chargebacks, which can take a huge bite out of your profits.
The first difference you’ll notice if you choose an all-inclusive plan is that your monthly statement is simplified instantly. Payment processors often try to get the jump on dealers by stuffing monthly statements with so much content that hidden fees, like high surcharges or extra printer’s fees, go unnoticed. All-inclusive plans are concise and to the point, because all the costs (for payment terminals, paper, debit, protection, etc.) are included.
Sales Volume is all that Matters
Automotive dealerships are often hesitant to set up payment processing because the fees are too steep. Typical provider plans don’t account for the fact that dealerships, while selling high-priced products, often only net around $1,000 to $2,000 profit per $30,000 sale. So all surcharges for premium credit, interchange fees, terminal fees, and admin fees are harder for dealerships to carry per month than other businesses.
When you have an all-inclusive plan, you only worry about your credit card sales volume per month. This fee is really the only one that matters, as sales for a dealership can vary widely from month to month and business might not always be as frequent as a large retail store, for example.
You’re Protected from Chargebacks
People might not realize that automotive dealerships are high-risk merchants, but generally they are. Your dealership might also be one that has fallen on hard times and has poor financials, but either way you’re more likely to experience chargebacks. Chargebacks are when a customer disputes a charge on their credit card and the merchant is auto-debited for the incident.
Chargebacks are particularly painful to deal with as a dealership. But with the right payment processing solution, like an all-inclusive plan, your fee includes a $1,000 per year protection. What this means is that for any chargeback you experience throughout the year, you will be reimbursed up to $1,000.
No Termination Penalties
Even if you’re a clever salesperson and are great at closing deals, your overhead can still greatly diminish your profits. Ideally you should be able to offer customers a convenient way to pay without inconveniencing yourself.
A final important note to touch on about all-inclusive plans is that they won’t inconvenience you with a termination penalty. As long as you give 30 days’ notice, you’re free to leave the contract without penalty.