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credit card rates

How Are Credit Card Rates Calculated For My Pet Sitting Company?

Since my last post on credit card processing and pet sitting software companies, I have gotten lots of questions about how credit card rates are determined. I know it is a taboo topic we don’t often talk about. The purpose of writing this is to be able to use it as a resource again and again.

I take personal responsibility for everything I publish, and genuinely want to help every business become educated on a messy and confusing topic.

That’s why I haven’t written this alone.

I am not the authority on merchant services, also known as “credit cards” in our Facebook forums, so I decided to go straight to the experts I know, like, and trust.

credit card rates

Tiered Pricing vs Interchange Plus Pricing?

Since the post of my recent blog where I shed some light on what was happening with credit cards and one pet sitting software, I was asked a few questions. The most popular was, “Do the people I work with offered a tiered pricing program or do they use the Interchange Plus Pricing model?”  This pet sitter was hearing that the Tiered Pricing Model wasn’t the best choice.

I thought it was a great question so I reached out to my contacts and spent 20 minutes on the phone learning about what determines credit card rates and taking notes for this article.

I am going to tell you what I discovered, but first, I am going to explain the two. If you are like me, I didn’t know and I really didn’t care as long as I was in love with my rate (which I am, of course!)

Tiered Pricing
This is when a company creates buckets and all cards fall into one of the buckets. Each bucket has its own percentage and that is what the card will be charged. Some buckets make the credit card company more money and some buckets make the company less money. The customer who is charging the cards will only see as many rates on their bill as how many buckets their cards fell into.

Interchange Plus Pricing
This is a system where it acknowledges that there are thousands of cards out there. On your statement, you will see a different fee for all cards including the upcharge that the company decided to add onto it. This statement might be a little harder and confusing to look at as the customer but allows cards not to be grouped together.

There are advantages and disadvantages to both models.

To answer the question I received: The company I work with uses both. 

It is why looking at people’s statements is so important to see what cards they are already currently charging and then find the plan that best fits them. They gave me an example that a donut shop might have different types of transactions than a hotel and that made perfect sense. Different volumes, amounts, and probably types of cards.

You actually might remember that person who I just helped save $8700!  She would have saved some by taking the flat 2.9% offer but ended up double because she had the negotiating power with many companies and chose against the software that would lock her into a higher rate of 2.9% causing her thousands of dollars.

You Could End Up Paying a Lot More In Your Credit Card Rates Than What They Courted You For:

What a certain software system is trying to claim “you could end up paying a lot more than what they courted you for” is actually true! Many merchant services operate like this. They bait you with a great rate and then switch or raise you as time goes on. In fact, the one you are with right now, might actually have raised your rates already and you have been too busy to even notice. After all, your payments are probably on auto-deduct, right?

What this software company says is true….. if you don’t know where to go.

credit card rates

How Do You Know Which Is Best For You?

Different businesses will have different trends like the hotel and donut shop I mentioned earlier.

It all depends and this is why it is SO important to have someone that you can know, like, and trust walking side by side with you. They should be able to explain credit card rates and fees and even re-evaluate things with you as your business grows. I can easily see how a dog walking company would vary differently than a pet sitting company simply because of the spending habits of their different clients.

What’s My Motive?

It is to help you. I have spent ten years in this industry looking through your profit and loss statements, looking where you could increase profits and cut costs. We have agonized on how to pick the best rate to charge so you can achieve your personal financial dreams. We have celebrated and cried together. A business coach with no successful clients isn’t a good business coach at all. So what I am trying to do here is make you successful. Make you keep some of your hard-earned money. I am trying to encourage you to not procrastinate a horribly stressful and confusing task that every business owner needs to pay attention to at least once a year and let you know that there is help.

I am begging you to not just say OK when someone gives you a flat rate without fully understanding the implications of what that really means. It might be good. It might be bad. My motive is to arm you with an education so you can make the best choice for you and that you can literally take to the bank.

pet sitting package deal

pet sitting software credit cards

The Truth About Credit Card Processing And Pet Sitting Software Companies

I couldn’t understand when a handful of clients came to me and said they couldn’t use more than one credit card processor in their pet sitting software system. (They all had the same one.)

It bugged me, as their coach, looking out for their bottom line…. so I reached out to their software company.

The pet sitting software company is very popular, newer, and always improving. Admittedly, they even have a lot of great bells and whistles including a feature that only one other company has.

They are cutting edge.
Always making improvements.
Quick to send and reply to emails.

Overall, they appear to be pretty darn awesome!

So I asked them, “Why can’t my clients use another processor other than the one you are encouraging?” and their reply was basically that they had problems when they had multiple credit card processing companies and they had to only choose one to support.

They said that many were using one processor in particular, so it is the one they decided to “support” on their app.

It didn’t really make sense to me, as they are so cutting edge… but I accepted their response.

Credit Card Processing

Wait….This Pet Sitting Software Company Does Offer Multiple Processors to Accept Credit Cards?!?

 

A few days later, I had a conversation with another client of mine. She was using this same pet sitting software company AND using a credit card processor who was different than what they said they could support. So I went back to this company and they said some people were “grandfathered” in.

So now, I was really confused. Can you not support it or do you choose NOT to support it, and why?

 

Something Didn’t Add Up.

 

What DID add up was the dollars it was going to cost my client in credit card fees and the pet sitting software services. The pet sitting software company she wanted to switch to was double as expensive as what she was currently using.   By switching software companies, she would have to switch credit card processors and it would be a fixed rate for processing.

That sounds stress free, right?

Maybe even a good thing?

In a world where there are thousands of credit card rates… knowing that you can count on being charged one percentage and one fee per transaction is pretty darn awesome…..right?

Wrong.

Or at least not all the time.

So I encouraged her to do the math.

Here is an example for those of you reading this:

This breakdown is Credit Card Fee/Total Revenue per Year/Cost of Credit Cards
2% of $500,000 is $10,000
3% of $500,000 is $15,000
4% of $500,000 is $20,000

Or, another example:

2% of $200,000 is $4,000
3% of $200,000 is $6,000
4% of $200,000 is $8,000

 

This Pet Sitter Did The Math.

She realized that switching pet sitting software companies would double her cost in software  (from around $200 a month to $400). Although, this new software company COULD save her some money in her credit card fees… so it sounded enticing.

And that is where many pet sitting companies stop their research and education.

But this pet sitter didn’t.

She asked another credit card company what her fees would be and because of her yearly volume, they could give her an even BETTER deal.

When all was said and done, if this pet sitter didn’t switch software companies and lowered her rate to the competitive company, she could save a lot of money in a year. In fact,

 

Switching Her Pet Sitting Software Company Would Cost An Extra $8,700.00 A Year!

Over $8,000 difference!

You could buy a small car for that price!

Or 4 MacBook Pro’s!

Or even 4 brand new websites!

That is a ton of money, and for this pet sitter, it was too much money.

She decided to stay with her current software company and switch credit card processing companies to save those thousands of dollars. 

Learning About Kick Backs

Kickbacks are something that when a person recommends a product or service, they get something in return. Sometimes they are called referrals. This day in age the big buzzword is affiliate marketing. I earn kickbacks for some things I recommend… but not all. For example, when someone signs up for credit card processing through my contact, I get a referral fee.

So this idea really got me thinking.

How can a company that advertises that they are always making improvements not make THIS improvement and how can their software be so robust that it GPS’s walkers, but they can’t take more than one payment processor?

Yet, I know they can because I have clients doing it?

pet sitter credit cards

So… I Called Up WePay.

 

WePay is much like Stripe, Square, etc. They are an interface that allows businesses to accept credit cards for a low cost without using a gateway. The way the credit card industry works is with lots and lots of numbers and rates. It is a volume based business because the more processing that happens, typically, the better rate businesses can be offered.

This works many ways.

I talked to WePay and you know what they told me? If I was a software company, I could offer 2.9% plus 30 cents per transaction to my customers who were using my software.

Once my clients reached a total of $250,000.00 in charges a month, then I could start making money on the back end. I could negotiate with WePay for a larger personal cut. I was told that the more money my clients charge each month, the more “wiggle” room I could have. So it would go something like this:

2.9% charged to my software users (they are all business owners)
I negotiate 2.5% behind the scenes with WePay and they still charge my customers 2.9%
That extra .4% will go directly to me on the back end as a profit share.

Let me use actual numbers:
$500,000 in revenue a month.
multiplied by .4%
=$2,000 a month

Another example:
If you are a software company and have at LEAST 100 clients charging at least $10,000 a month…. that is $1,000,000 in revenue a month. That could be $4,000 a month they are making off credit card processing if they were only earning .4%

There are so many variations, and it is hard to estimate anything, but it is safe to say that a software company could make a LOT of money off the charges that my customers make.

While discussing the possibilities with WePay, and telling them I was in the pet industry, they actually named the software company that does this exact type of deal with them and how great it works out.

 

And Now It All Makes Sense

 

Listen, I want to be super clear – this is the way that credit card processing works and I am not against it. I am not even against this software company having another revenue stream.

What I am against is the feeling of YUCKY that sits with my clients and I when we asked this software company a direct question and got (what we feel) smoke and mirrors.

Essentially they have the most expensive software (all the power to them!) and they seem to hide the fact that they make money off of that too. I just don’t like that it appears like they are not telling the whole truth or being upfront. Not to mention they are leading their clients to think that they are getting a great deal.

In a world where transparency and authenticity is golden online, I would really encourage them (because I know they will eventually read this) to come clean. So many people would have so much more respect for them.

We aren’t against them making money. We all have choices and business decisions to make. It is more about their refusal to disclose it.

I find it challenging to encourage my clients, whose best interest I serve, to tell them to use a software that is the most expensive, and then they have no negotiating power with their credit card fees on. For that reason, I can never recommend this software.

pet sitting software

Know Your Rights With Credit Card Processing:

These are all according to me and what I have learned. Nothing legal about what I am about to share *wink*

  1. Shop rates like you would your home mortgage.
  2. Ask your current company to reduce your rate. If they can’t, see #1.
  3. Go with the company with the best customer service and rates.
  4. Know that you have the right to have your own personal contact at the credit card company. You should be able to call or email them and they know about you and your business.
  5. Understand that rates change based off what is going on in the world, your volume, and a bunch of other reasons that make my head spin.
  6. Get someone on your business team (a rep) that you can know and trust!
  7. If you get an 800 number and are just a fish in the sea, run!
  8. Online reviews will ALWAYS be bad. They are full of people upset, especially when it comes to credit card processing. It shouldn’t hold much weight.

 

My Final Advice:

  1. You have to be an advocate for your business. You need to know your numbers on a global scale. You need to know projections, if you are up or down, the average price of a visit/walk, how much it costs you, how much you’re spending in labor, how much you want to make, and HOW MUCH you are spending! If you have no clue, my Pricing Structure & Strategy Guide can set you straight.
  2. You can’t stick your head in the sand. It is one of the most important responsibilities as a business owner. Know your numbers or at least know how to recall them in reports that are up to date and at your fingertips.
  3. When choosing a pet sitting software company decide on the features that are most important to you and see what company can serve you the best. My top three would be customer service, ability to negotiate credit cards rates, and how they will help improve my processes. My top three, might not be your top three.

 

 

credit card rates

 

choosing pet sitting software

5 Things To Consider When Choosing Pet Sitting Software For Your Business

Choosing pet sitting software is no doubt a daunting task. After all there are a TON of different companies, all with loads of different, innovative features. But how do you know which of those features you truly need? Today we’re going to talk about the 6 things you MUST consider when choosing pet sitting software in order to keep yourself sane and organized.

6 Things To Consider When Choosing Pet Sitting Software For Your Business

choosing pet sitting software

Accounting

When choosing pet sitting software, we have to consider what type of accounting we do. You want to ask yourself if it’s important to you whether or not your accounting is done within the system. By this I mean if you want the software to track invoices, income, give you profit and loss reports, etc.

But, maybe your accountant or CPA prefers you use a software like Quickbooks to do your accounting. Maybe your CPA works with you virtually through Quickbooks where they log in and help you manage business finances. If this is the case, then a software with built-in accounting may not be vital for your business.

 

Customer Service

Another crucial aspect of choosing pet sitting software is customer service. What type of customer service does the software offer? What is there response time like? Do they have 24/7 support? What do other pet business owners think about the company’s customer service? Do they have online Facebook support groups? And are these groups run by community or actual Helpdesk at the company?

All of the above are great questions to ask and research when choosing pet sitting software. As a pet sitter, I know you know as well as I do that things DO go wrong sometimes. And in the event of an emergency or major problem with your software, you want to make sure that someone has your back.

 

How Often Is The Software Updated?

Nowadays, technology and software is constantly changes. There are always new breakthroughs. It’s important to choose pet sitting software that stays on top of the technology industry and is constantly changing with it. This can include things such as increasing loading speeds, GPS, adding new features, and optimizing their software for other devices such as phones or tablets.

Plus, does the company actually listen to their client’s ideas for changes? You definitely want to pick a company that listens to feedback and implements it in a timely manner.

 

Mobile Version or App Version?

It’s really handy for your pet sitters to be able to use the software on their mobile devices. So it’s important to find out when choosing pet sitting software if they at least have mobile friendly version (i.e. a simpler website specifically for a phone). Or, even better, do they have a specific phone application that you can download? And, can the client use the app or just the company?

Being able to use pet sitting software on a mobile device eliminates lots of room for error and can eliminate a paper trail, as in pet sitters won’t have to manually print out client notes or their schedule. There are lots of benefits to having mobile access to your pet sitting software, so this should be a primary deciding factor.

Communication

Every pet sitting company should have a primary form of communication. When communication is spread out between multiple methods (i.e. email, texting, phone calls, voicemail etc.), things get lost in translation. Consider choosing pet sitting software that offers communication within the program. This can be helpful so that you have all client and pet sitter communication within one medium.

Or, if you prefer email (or another method), then choosing pet sitting software with communication built in may not be as important to you.

Credit Cards

Make sure the software you choose doesn’t lock you into just one credit card company. Make sure that you can actually negotiate your credit card prices. More about how credit cards work here.

 

Final Food For Thought

Everything listed above are some of the major things you should consider when trying to choose a software company. You should consider these 5 factors first and determine what’s important to you. Then, you can look at the additional “bells and whistles” that the software companies offer.

Software is there to help you, so you want to find the program that’s right for YOUR business and fits in with your model.

mastermind pet sitting

The Problems With Switching Pet Sitting Software Companies

Thinking of switching pet sitting software companies can be a big pain in the A$%, isn’t it? In fact, all the headache that goes along with switching is the single most important reason why I hear many pet sitters won’t do it.

As a business owner, we already have way too much on our plate. If delegation is the key to success, why don’t we allow our clients to help us out with this process?

Stay with me here…

The Problems With Switching Pet Sitting Software Companies

switch pet sitting software companies

Don’t Make Switching Pet Sitting Software Companies A Solo Project

When switching pet sitting software companies, you will ultimately have your clients log in, update their info as needed, and schedule services with you, right? A common misconception with pet sitters is that they think the burden of updating their client’s information is on THEM – but I’m happy to tell you that this is not the case 🙂

So let’s invite them to “update their information” as we get our new system set up.

[ctt template=”8″ link=”7i813″ via=”no” ]Let your clients update their information by saying, “We want to make sure we have the most current info about Fluffy and Fido” @bellas_pets[/ctt]” This type of phrasing not only shows that you care, but gives the client an incentive to comply. It also alleviates the pain of you having to enter in all the information or pay to have someone do it. Plus, different systems might have different fields for information making it a little difficult. When this happens, we might procrastinate things even more. AKA Not get the task complete!

 

Here Are Two Examples Of What You Can Say To Your Clients:

If you can muster up the positivity and set expectations properly – consider the task of switching pet sitting software systems done!

How do you do that? Well, thankfully, you are reading this now, so here goes a mock letter, that you can copy and paste, right here from my website, for you to use:

 

Sample Letter #1

Dear NAME:

Our tail is wagging in anticipation of this new toy we just bought for XYZ PET SITTING COMPANY. It is an even BETTER scheduling software system that we just know you will absolutely LOVE!

Feel free to scratch and sniff your way around by going HERE and clicking THIS. Once you are in, you can actually create your OWN UN and PW. (I thought it would be better for you to create it rather than making something that you would probably forget, because, let’s face it, you didn’t create it!)

Before we are able to approve your next booking, we just need you to take 5 minutes, enter in the info for your fur babies, your credit card, and then you can be on your way to booking.

EVEN BETTER:

I know it is probably been dog ages since you have updated your babies info, so this will help us all stay on the same page!

HAVE ANY QUESTIONS?
If your paws hurt, you can always watch how easy it is to set up an account by watching this 30 second video HERE

Or, you can give me a howl on the office phone OFFICE HOURS, I am on stand by ready to help!

Tailwags,
YOUR NAME

 

Sample Letter #2

Hello CLIENT,

We are doing some updates to our online profile system and just need for you to update your fur kid(s) info before making your next booking.  Feel free to do it now, if you have the time!

It is as easy as 1-2-3.

1 – Click HERE and create a UN and PW
2 – Fill out all of your info and your pet’s info.
3 – Oh wait, we are all ready done! See how easy that was? 🙂

If you have any questions at all about this new process, I am in the office OFFICE HOURS and ready to help!

Tailwags,
YOUR NAME

Manage Expectations & Solve Problems Before They Come

I have always said, if you can manage someone’s expectations, you will cut the questions down to a minimum. Likewise, if you can expect people’s behavior, you can lessen your frustrations!

Here is what I mean: Anticipate the questions that your clients will have for you and consider making a short video like this one to help show them their answers:

You can easily create videos on Screencast-o-matic for free!

Remember, Questions Do Not Mean Criticism

Don’t fret when clients are asking you questions on the system. It doesn’t mean that the system you just moved to is de-funked. It means that they just simply have questions and they are looking to you for help. Think of it as a way to touch them and open up a conversation about how their services are going or how their pets are doing. Ask them their opinion of what they like and if there is anything you can improve on. Simply ASKING that last question can secure a client for life because they know that you care!

Switching Pet Sitting Software Systems Doesn’t Have To Be Tough

Change is always tough. I am betting that it actually took you a while to take the JUMP towards switching pet sitting software companies, am I right? What you need to do now is hold on tight, anticipate the questions, and know that you don’t need to sit there for hours upon hours to update every single client file.

Nor, is a data transfer going to be seamless. So in my opinion, it is best to have your clients help you do it. 🙂 Not to mention, all of the companies are always there to help you. After all, they want you to LIKE using their software!

Don’t ever let this challenge prevent you from making a switch!

 

Mastermind