OUR LATEST INSIGHTS

Up to date, high-level business information that is relevant to our clients and contacts, helping keep up to date on the ver-changing business world of today.

Cal Wilson / March 2, 2022

What is surcharging and should your business do it?

If you accept any kind of credit card payment, you may have heard of surcharging. It’s the practice of adding an additional charge to a customer’s purchase to cover the fees a payment processor requires for processing credit cards.

While it may seem like a win for you, the merchant, it’s not a completely problem-free practice.

In this article, we take a look at this practice. Should your business consider it? What are the pros and cons?

Why do some merchants surcharge?

Every time a customer swipes their Visa, Mastercard, American Express, or other kind of credit card, you incur a processing fee. These are called interchange fees. According to Quickbooks, the following variables impact a merchant’s interchange fees:

  • The credit card company
  • The type of card being used – i.e., whether it’s a rewards card, a business card, etc.
  • How the transaction is processed – POS, over the phone, or online.
  • The price of the product or service.
  • The type of business of the merchant.
  • Whether the transaction is domestic or international.

Likewise, rates change twice a year, in April and October.

Interchange fees are just one of the many fees merchants are charged to be able to accept credit card payments.

How does surcharging work?

Without surcharging, that fee lies squarely on the merchant.

If you’re looking to pass that expense onto the customer, you have two kinds of surcharging options; brand or product surcharging. Brand surcharging adds a charge every time a customer uses a card from a specific credit card provider; some merchants may add a surcharge, for example, on Visa purchases, but not Discover purchases. Surcharging on the product level, however, only adds surcharges on certain types of cards under a specific brand. Merchants may choose one option, but not both.

Surcharging is subject to different laws in different regions.

As you can imagine, in order to protect the consumer, surcharging is heavily regulated. In some places, it is not legal at all.

In fact, in the United States, surcharging is illegal in Connecticut, Maine, and Massachusetts. In Canada, service fees can only be added on certain kinds of transactions.

For the regions where surcharging is a legal practice, merchant are beholden to a surcharging cap. These vary by area, but often fall around 4%. The caps are put in place to prevent merchants from making profit from surcharges.

No matter where you are, if you surcharge, your business is subject to rules of disclosure. Merchants must disclose their intention to surcharge ahead of a transaction, and at multiple touchpoints while a customer is in the store. This includes such notices as a sign notifying the business’ surcharging practice at the store entrance, as well as at the point-of-sale. The surcharge dollar amount should also be clearly visible on the customer’s receipt.

While these practices keep surcharging ethical, they can also be off-putting to some customers, who only see the addition of a fee they might not completely understand.

Does surcharging save your business money?

There is no simple answer to this question. It can, but it depends on your business and your customers.

According to Evolve Payment, “[i]f your industry is a ‘race to the bottom’ where the lowest price wins, then surcharging is likely to hurt more than it helps. This is especially true in B2B industries with corporate contracts.”

For some businesses, adding fees like surcharges is going to be more common practice and expected by the customer. In other industries, it might hurt your chance of making a sale.

Fortunately, there are other strategies.

So your credit card processing fees are eating into your revenue, but you don’t think surcharging is the right move for your business. Not to worry – there are other things you can do to ease the expenses.

For example, instead of surcharging, many businesses offer cash discounting.  In this practice, merchants discount the price of purchase if the customer pays with anything other than a credit card. And, while surcharging isn’t legal continent-wide, cash discounting is.

Cash discounting is only possible if you have a certain amount of wiggle room on your markup pricing. However, when it is an option, it certainly is a bonus for customer experience.

Another tactic is setting a minimum for credit card payments. Depending on your rates, it may not be profitable to offer credit card payments under a certain dollar amount.

Another strategy is working to reduce your overall merchant services spend. Part of this is exploring what options are available to you among multiple vendors, knowing rates are fair, and how to negotiate for the best price. A cost reduction professional who specializes in merchant services might be your best asset if you take this route.

In conclusion…

As Evolve Payment says, “surcharging is, at the end of the day, passing business expenses onto your customers.”

While it has the potential of saving you money on your variable expenses, it’s not always a great strategy optically. Offering cash payment incentives, working to reduce your overall merchant services fees, and ensuring you’re paying the correct rates, are alternative strategies to reduce your spend while keeping customers happy

Cal Wilson / March 2, 2022

What are variable expenses and how can they impact your business’ bottom line?

When creating a budget for your business, it is helpful to separate and account for fixed versus variable expenses. Mistaking the latter for the former can cost you, and the better you understand all your expenses, the better chance you have of optimizing them.

If you’re unfamiliar with the concept, the best way to describe the difference is that fixed expenses are costs that stay the same from month to month, whereas variable expenses are ever-changing and harder to predict.

Fixed expenses.

Fixed expenses often represent the largest part of your budget. For a business, your fixed expenses are going be costs such as rent payments, insurance premiums, property taxes, and so on. While these are not easy to optimize, they are easy to work into your budget, as they are unchanging and paid at a consistent frequency.

If you can lower these expenses – say, by finding a different insurance plan that works for your needs – you automatically save more money each month or pay period.

In business budgeting, it is important to remember that all your fixed costs must be paid, regardless of your sales that pay cycle. If you’re starting a business, making sure you can cover these expenses for a period before you start bringing in revenue is crucial to staying afloat.

Variable expenses.

Your variable expenses are going to represent the costs incurred by how a given month or pay period goes for your business. How many credit cards you swipe, how much electricity you use, or how much waste you generate; all of these are going to incur a bill that varies every cycle.

Some of these expenses can be harder to reduce than others. How much heating you use to keep your office warm, for example, may be more difficult to lower than the amount of waste your organization is generating. However, in many cases, these expenses are in areas that you can strategize or work with professionals to identify savings, creating a more predictable monthly bill.

Employees can represent either kind of expense.

Depending on how you staff your business, your employees can be either a fixed or variable expense. Anyone hired on full time, who is guaranteed a forty-hour work week, will be a fixed expense, whereas a seasonal or part-time employee will likely be a variable expense, as their hours are subject to change month to month.

Budget with these expenses in mind.

When you’re budgeting, it’s important to separate your fixed costs and your variable costs. If you’re able to determine what you absolutely will be spending in your fixed costs, then it is easier to identify and strategize areas to save with your variable costs.

Month to month, keep track of your variable expenses. Maybe one month you allotted too little to certain expenditures and went over budget. If you keep a closer eye on each cost category, you can do a better job budgeting and planning for the future going forward.

Don’t settle on expenses.

The lower you can keep your costs, fixed or variable, the better the results for your bottom line. If you don’t have experience negotiating rates or deciding what expenses are fair in comparison with the rest of the market, don’t settle. Explore your options, bring in consultants, and work with professionals who can guide you in the right direction.

Especially for the fixed expenses you will be locked into for some time, this could be a make-or-break decision for your business. Why pay more than you have to?

Cal Wilson / March 2, 2022

Customers say the best service comes from small businesses

No one likes bad customer service. One of the most important aspects you should consider as a business owner is how to make sure your employees’ customer service reflects well upon the business. The good news is small businesses are already perceived as the leaders in providing consumers with excellent customer service.  

In fact, according to the recent American Express Global Customer Service Barometer, 81% of customers think small businesses deliver better customer service than their larger counterparts. In this issue of The Pulse, we look at why that perception exists, and what businesses can do to improve their customer service.  

Customer service matters. 

Customer service can make or break a sale. In fact, new data indicates that seven in ten Americans are willing to spend an average of 13% more with companies they believe provide better customer service. This represents an upwards trend, as the same studies from 2010 reported six in ten were willing to spend 9% more. 

On top of this, 78% of respondents to American Express’ survey reported having ended a transaction or not made an intended purchase as a result of a negative customer service experience. Likewise, the majority of respondents – three in five – indicated they would try a new brand in search of better service.  

If you aren’t working on your customer service presentation, you might be missing out on not only sales, but customer retention and referrals, too.  

Despite how highly customer service is valued, many consumers feel they are missing out. Most American consumers feel that companies aren’t paying enough attention to customer service.  

Bad service can cost you potential customers.  

It’s impossible to guarantee how every customer interaction will go. Despite what we may say, the customer isn’t always right. However, businesses should still focus on providing the highest level of service whenever possible, because even one unpleasant experience can be costly.  

Word of mouth is an incredibly powerful marketing tool, and consumers are likely to tell their friends – and the internet – about their experiences with your business. Unfortunately, they are more likely to spread the word if that experience was bad. American Express found that Americans tell an average of nine people about good service experiences, and an average of sixteen about poor ones. 

Why are small businesses excelling in customer service? 

With all the resources larger businesses have access to, why are smaller businesses having more success when it comes to customer service?  

Smaller businesses have the advantage of serving a smaller customer base, who they can get to know more personally in many cases. However, this does not mean that the larger the company, the worse the service. Larger companies can take notes from smaller businesses, as well as make use of the newest technologies to make their service stand out.  

What can businesses of all sizes do to improve their customer service? 

No matter what size your company is, if you’re worried about achieving excellent customer service, here are some strategies to improve quality and bring in more business.  

Keep on top of tech updates. 

If your tech is seamless and user friendly, it reflects well on you. This is important for your in-store equipment, such as Point-of-Sale terminals, as well as your virtual service platforms, such as chatbots and website features. Something as simple as the web hosting provider you use, which determines how quickly your web page loads content, could make an impact.  

Phone experiences are a priority.  

It is critically important that any employee taking phone calls and representing your business be professional, polite, and knowledgeable. Likewise, an up-to-date business phone system will improve the customer service experience by reducing wait times and dropped calls.  

Personalized interactions build relationships.  

If your staff and sales team focus on building personal connections and understanding a customer’s needs, rather than just pushing a sale, it will lead to a better customer service experience overall. Customers appreciate being able to trust personalized recommendations based on the expertise of your employees. If you’re looking for reviews, testimonials, and word-of-mouth marketing, personalized interaction should be a priority.  

Social media is a great chance to showcase your customer service.  

If your social media is a space you use only to promote yourself, you’re missing an excellent chance to interact with customers, and build new connections. The way you respond to comments and the voice you use in your posts crafts the perception visitors have about your brand. Make sure to use this to your advantage.  

Proper employee training goes a long way.  

One of the most frustrating experiences for a customer is when they ask an employee for help, and the employee is either unwilling or lacking the knowledge to help them. Proper training – making sure your employees are knowledgeable and enthusiastic – is a huge part of the overall image of your company’s competency.  

Be open and responsive to customer feedback.  

Whether online or in person, it’s important to take, listen to, and track customer feedback. When possible, responding in a professional rather than defensive way is also prudent.  

Using online tools, such as Hootsuite, or HubSpot, allow you to keep track of multiple accounts in one spot, and can make matters a little less overwhelming when interacting with online feedback.  

In conclusion… 

Customer service is valuable. Not just for your reputation, but for your bottom line too. While smaller businesses seem to have the advantage in this matter, there are a lot of strategies any company can employ to boost their customer service and improve their B2C relations. 

Cal Wilson / March 2, 2022

Recommendation Letter for Absorb & Restore

To Whom It May Concern:

In Erie, PA, you fall in to one of two groups – those that have had their basement flooded, or those that are waiting for their basement to flood!  Recently, I moved in to the “had their basement flooded” group, and if weren’t for the amazing water damage team at Absorb & Restore, it could have been a terrible, costly experience.

Absorb & Restore is a local, veteran owned and operated, water damage company in Erie, PA and provides prompt, compassionate, and professional service. Working in both homes and businesses, Absorb & Restore handles roof leaks, pipe breaks, sewer/drain backups, and mold remediation.   Answering the call 24/7, owner Zack Kavchak and his team truly understand the emotions and concerns of their client and are there for them during their client’s time of disaster.

When I reached out to Zack, it was during a snow melt / rain event and he was extremely busy.  He told me he could get to my house around 3 pm, and he was there just as he said he would be.  He assessed the damage and explained his plan to me. Immediately, he and his team got to work and they came back every day (even on the weekends) to check the status of the carpet and walls and move the blowers to ensure the basement was drying properly.

Here is what I love about Absorb & Restore’s service. Unlike most water damage companies, Absorb & Restore doesn’t double as a construction contractor.  This is an important detail because Zack and his team were focused on saving as much of my carpet and walls as they safely can.  Where other “restoration” companies benefit from damage because clients will most likely hire them to replace it, Absorb & Restore doesn’t operate that way. They truly have your best interest at heart when they begin their restoration.  Zack and his team were able to salvage EVERYTHING for me.  When they say their values are “Integrity First”, they truly mean it.

While no one wants a flooded basement, I’m grateful that I knew to call Zack and his team at Absorb & Restore to handle my crisis.  If you’re a new member of the “had their basement flooded” group in Erie, PA – call Absorb & Restore.  If you are in the “waiting for the basement to flood” group, hold on to Zack’s number – one day you’ll need it and you’ll be grateful you had it; I was!

 

Yours truly,

Adam Baker

Schooley Mitchell

Download as PDF.

Cal Wilson / February 4, 2022

Recommendation Letter for Tijuana Tom’s House of Hot Sauce

To whom it may concern:

I have found my go to local company for hot sauce since recently discovering Tijuana Tom’s House of Hot Sauce.

Tijuana Tom’s House of Hot Sauce was founded by Thomas and Kendra. They have traveled all over the world and wanted to share their inspirations and experiences to others in the form of hot sauce. Based in Milton, ON, Thomas and Kendra have the goal of bringing globally inspired flavours to the local community in the form of handcrafted, artisan hot sauce.

I met Tom at the Milton Winter Farmers’ Market where he has a booth selling his hot sauces. As someone who enjoys spice and routinely adds hot peppers and sauces to my food, I was intrigued to find out more.

Tom was happy to describe all the flavours and patiently walked me through the different spice levels unique to each flavour. The pride and enthusiasm Tom has for his sauces clearly shined through during our conversation. The fact that all sauces are handcrafted locally really impress me. I ended up purchasing the Pura Vida and Smokin’ Fuego flavours.

The Pura Vida offers a mild spice infused and balanced with citrus flavours. This was my wife’s favourite. The Smokin’ Fuego, as the name suggests, offers a great kick of spice. I am now adding this to most of my meals, including eggs for breakfast and pasta in the evenings.

I would highly recommend Tijuana Tom’s House of Hot Sauce to anyone looking for locally made hot sauces that are well balanced between spice and flavour.

Cheers,

Michael Baznick

Schooley Mitchell

Download as PDF.

Cal Wilson / February 4, 2022

Recommendation Letter for Doleski & Wolford Orthodontics

To whom is may concern:

In late 2020, I was referred to Dr. Kenneth Doleski or Doleski & Wolford Orthodontics and from the first day I met him I knew I was in good hands. After completing Invisalign treatments with Dr. Doleski, I couldn’t be happier with the results or my experience.

Doleski & Wolford Orthodontics provide exceptional orthodontic care in Erie County, PA. They are able to serve patients of all ages, from children to teens through adults. Doleski & Wolford Orthodontics utilize the most current technology, like clear braces, Invisalign clear aligners, Invisalign Teen, and the iTero system to capture precise digital impressions of your teeth and bite. But perhaps the greatest advantage Doleski & Wolford can boast is their incredible staff!

From my very first consultation, I was treated like I had been a patient of theirs for years. The staff is warm, friendly, and extremely welcoming. As I met with Dr. Doleski, he consistently presented me with his thoughts and options to choose from — I always felt like I was in the driver’s seat and he was my guide, always on time — they were always on schedule, so I never wasted part of my day sitting in the waiting room. That is unheard of in today’s world!

A quick search of their office shows that my experience isn’t the exception – it’s the rule. Doleski & Wolford Orthodontics average 5 stars on Google and Yelp and after you experience their service, you’ll understand why.

At Schooley Mitchell, we recognize the value of taking care of our customers and it’s great to see when other businesses put the client first as well.

I highly recommend Doleski & Wolford Orthodontics for your orthodontic treatments. Their service makes you want to smile all day!

Yours truly,

Adam Baker

Schooley Mitchell

Download as PDF.

 

Cal Wilson / January 28, 2022

Award for Most ELD Billings, 2021

We are the proud recipients of one of Schooley Mitchell’s franchisee awards in 2021. It is an honor to be recognized for our hard work and dedication to our clients.