If you could time travel back 100 years, you’d be rich. That $20 bill in your wallet would be enough to send you on a nice shopping spree through town – just imagine how much damage you could do with the rest of your savings!
Unfortunately prices don’t stay still; they’re constantly soaring or falling. As prices rise, the power of your dollar – how much your dollar can buy you – drops. This is called inflation, and it’s the last thing most merchants want to deal with. Inflation often forces merchants to raise their prices so they can maintain their profits, angering many of their customers in the process.
Believe it or not, there are ways you can offset inflation and keep your goods affordable for your customers. Later on, I’ll teach you the one hack that promises to do just that.
It all starts with cutting costs, and there’s no better way to do that then to optimize your credit card processing structure.
Cut Unnecessary Costs
When business is booming, it’s easy to overlook all the ways you might still be losing money. I mean, why would you when you’re already making a ton of money? Yet once inflation hits, businesses often find themselves in scramble mode: they’re forced to slash costs but often have no idea where to start.
What’s the secret to cutting costs? You have to lean out your business and increase your efficiency. See if there are any software subscriptions, excess inventory shipments, or other miscellaneous costs your business can survive without. (Tip: Try to resell what you don’t need to make a little extra side profit)
You might have a tough time slashing the “fat” off of your business. Here’s one thing to keep in mind: a lot of the things you feel are essential actually aren’t – with a little ingenuity, you can both restructure your business and maintain your current levels of production, all while cutting costs.
Why You Should Check Your Processing First
Still not sure where to cut costs? Look no further than your merchant processing system. Many businesses are overpaying their banks and credit card processors without even knowing it because those processors often prioritize their bottom line over their merchants. They’ll sell businesses on processing programs that end up costing them much more than they deserve to pay.
Many business owners go with the big-name payment processors simply because they assume they’ll receive the best deal that way. But going with a big name doesn’t automatically secure you the ideal payment processing solution for your business.
For example, one notable processor charges a flat rate of 2.75% for most transactions, and a slightly higher rate for higher-risk payments. That sounds great; if you do, say, less than $75,000 in monthly processing volume then it might not make much of a difference.
Now what if inflation hits and you need to cut costs? Chances are you can secure a much better deal by going with an interchange plus rate, which is much lower than that 2.75% flat rate and doesn’t increase when processing higher-risk transactions. By switching payment processors, you’ll save a lot of money per month. That will help you recoup your inflation losses and spare your customers from price spikes.
Cash Discounts: The Fee-Slashing Hack
There’s another way to save thousands of dollars a month in processing fees: enrolling in a cash discount program. In a cash discount program, you charge card-paying customers an added service fee for processing their card. However, cash-payers will receive a “discount” and will pay your normal prices instead.
This is one of the most reliable ways to offset inflation and regain the majority of your revenue. Most people these days pay in card, so in essence you’ll recover most of your inflation losses with every card transaction you make. That’s great news for you, and it’s not necessarily bad news for your customers either. If they ask you why they have to pay extra to use their card, just let them know that the service fee is how you’re able to keep prices from skyrocketing.
QRev, our cash discount program, offers you unlimited transactions of all types for an affordable monthly rate. Click here to learn why our cash discount program is perfect for pretty much any high-ticket business out there.
So what’s the bottom line? Inflation isn’t the end of the world, and your business can combat it without burdening customers with higher prices. As you begin to slash costs, evaluate your current payment processor and make sure they’re giving you the deal you deserve. Run a cash discount program at your place of business to offset inflation every time you swipe a customer’s credit card.
Here’s what you need to do. First, figure out how much you’re currently paying in processing fees. Then, click here – we’ll send you a free merchant analysis so you can see how much you stand to save with the right processor.