Monthly Archives: October 2017

The Water Is Your Friend

The water is your friend. You don’t have to fight with water; just share the same spirit as the water, and it will help you move.”  – Motivating words from Russian master of #SprintSwimming #AleksandrPopov 

Aleksandr Popov Water is your friend ClassJuggler

Likewise in business, some swim school owners find themselves fighting with the strong current of keeping their business organized. No need to struggle! ClassJuggler is your friend. Stop fighting with the minutia of running your business and spend more time with your students with the help of swim school management software .www.swimclassjuggler.com. 

Find more motivational swim quotes and memes at https://www.pinterest.com/classjuggler/swim/.

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Three Common Arguments against Accepting Credit Cards

A look at the cost of not accepting credit card payments in your small business

Our previous article looked at three specific cost advantages to accepting debit card and credit card payments in your small business. Equally important is the financial risks you might incur if you don’t accept credit card payments.

There are three seemingly strong arguments I hear small business owners use, reasons that, at first blush, seem compelling, but that ultimately end up costing their businesses more money than if they had accepted credit card payments. Let’s take a look at these.

Argument #1  The old-school way is working just fine, thanks.

This argument usually takes one form or another, such as:

  • “I’ve been taking checks for classes for the last 20 years.”
  • “My parents always pay by cash or check, and I see no reason to change or pay the extra fees with merchant processing.”

This is something I hear from time to time from prospective ClassJuggler clientimages. The truth is that the “old school” ways of bringing in money can be much more expensive.

A good question for that studio owner is, “Have you actually talked to your customers and asked them how much they enjoy writing you a check each month?”

The reality is that the overwhelming majority of parents would find it much more convenient to have their credit card billed automatically each month rather than write you a check. Seriously, who even carries a checkbook around with them anymore?

Argument #2 – “The fees and complexity are just too much.”

Here is something I’ve heard more than one prospective ClassJuggler customer say: “Merchant processing is expensive and complicated; I just don’t have time to figure this out.” image

While merchant processing and its associated fees can be confusing and complicated, when it is fully integrated into your studio management software, it becomes trivial to use.

As to costs, I encourage you to take a moment and answer the following questions, and see how this adds up:

  1. How much time do you spend chasing down late payments?
  2. How much time do you spend collecting cash or check payments each month, either at the front desk or by mail?
  3. How much time do you spend organizing deposits and visiting your bank branch?
  4. How much in time and cost is wasted on NSF bounced checks?
  5. How much time do you spend monitoring your checking account to see when checks clear and are deposited so you can pay your bills?

The reality is that most business owners do not take into consideration their own efforts spent on these time-intensive tasks. They don’t understand the real costs of their current payment process. And they often discount or ignore the inconvenience to their own customers.

After answering the questions above, add up the time. Typically, it adds up to at least 4 hours, usually much more. If you could save 4 to 8 hours monthly on payment collection, how much would that time be worth to you? That time could be turned into more classes taught, or time to better market your business, or time to plan that big open house event to promote your business.

Time really is money and saving 4, 8 or more hours monthly more than pays for the costs of accepting credit and debit cards.

Argument #3 – “Many of my customer’s aren’t online”

Statistics from June 2017 show that 88% of North Americans and 80% of Europeans are now internet users. The International Telecommunication Union estimates that about 3.2 billion people, or almost half of the world’s population, would be online by the end of the year.

I.e., your customers are online.

Accepting credit and debit card payments, particularly online, is a competitive necessity these days. Ultimately all dance, gymnastics, tennis, swim, martial arts, and music schools are, and must be, 100% customer service oriented. You want all of your students to have the best experiences and education you can give them, right? Why not continue that experience in how you interact with their parents, or with the student who is also the paying customer?

Think about this: If you lived near two identical grocery stores that had similar pricing and similar items but one store only accepted checks and the other only accepted credit or debit cards, which one would you visit? Can you imagine running to the store for a last-minute item you needed for a party and having to stop, pull out a checkbook, fill it out, wait for them to enter and scan your check and check your ID before being able to check out?

Pennywise and…?

Many businesses only look at the costs associated with a merchant account and consider it “money out the door.” They maintain their old policies of cash and check only payments. While they may save money on the costs of accepting credit and debit cards,  they aren’t really saving money when you factor in the costs of not accepting cards as payment.

ClassJuggler offers schools and other class-based businesses the ability to accept credit cards easily and affordably. When you let customers pay for classes online with a credit card, you get paid fast, and without the hassle or expense of collecting payments at your business, manual mailed billing, or check processing!

Setting up customer accounts and processing payments is simple. We’ve integrated these features right into our acclaimed ClassJuggler interface. Our affordable merchant payment processing option integrates account management and credit card processing technologies within ClassJuggler, making payment and processing as easy as a few mouse clicks.

Three Types of Savings You Get by Accepting Credit & Debit Payments

After our last article, which looked at the costs of accepting credit and debit payments, you may be a bit overwhelmed, or even depressed!  But, yes, accepting credit card and debit card payments can have cost advantages to a small business owner.  Let’s look at three of those cost savings benefits.

1. Decrease the time spent on your monthly billing cycle

A typical small class-based business, such as a dance studio, gymnastics school, or swim school of, say, 100 students can expect between 5% and 15% of their accounts to be late each month.

That may not sound like much, but that adds 4–8 additionalimage administrative hours or more each month, chasing down payments from customers. Those hours cost you money and lost business opportunities. It also leads to grumpy studio owners.

Accepting credit cards for your business can reduce time spent on chasing down late payments by 50 to 80 percent. Think what you could do with an extra 4 to 8 hours each month!

2. Reduce uncollected debt

Another cost of running a small class-based business is uncollected debt. When a parent who could not afford your classes gets too far into debt, they imageare likely to never pay you back the full amount.

Shifting responsibility from your studio to the customer’s credit card company allows you to collect those fees even if the customer defaults on paying their credit card bill.

3. Keep your administrative costs down

As your business grows, you will likely add instructors and more class types to bring excellent services to your students and their parents. imageBut at the same time, you don’t want your administrative costs to skyrocket.

Rather than adding additional admin staff to deal with customers, take those savings and invest them back into your classes and instructors by empowering customers to pay their bills to you online, unassisted by you.

In our next article, we’ll also look at the cost of NOT accepting credit card payments.

The Costs of Accepting Credit Cards

If your business isn’t accepting credit cards for payments, the efforts to do so may seem daunting. Is it worth it? Before you can know the answer for your business, it’s critical to understand the fees involved in accepting credit cards.

Let’s focus here on the e-commerce aspect as we evaluate what it takes, cost-wise, to make online payments via credit cards or bank cards available for your customers.

imageAs we reviewed in earlier articles (see Merchant Processing 101 and The Top 5 Benefits of Merchant Processing for Your Business) a merchant account is actually the combination of two things: a gateway service and a merchant account.

Those two entities represent the primary costs of owning a merchant account – the foundation for accepting credit cards for customer payments.

Gateway costs

The most popular payment gateway service in the U.S. is authorize.Net. It is used by many of the online software companies, including ClassJuggler. imageIt’s pricing model is very simple. Typical pricing looks like this:

  • $15 to $25 monthly
  • Small per item fee of 6¢ – 10¢ per transaction

Merchant processing gateway costs

The merchant account is one of the most complicated kinds of accounts to understand from a pricing standpoint, because:

  • It can contain so many different elements.
  • There are so many different providers.

Looking at a monthly merchant statement is just as much fun as looking at imagethe details of your cell phone bill with all of the crazy little regulatory, network, and other surcharge fees. Let’s explore the four major elements to your merchant accounts cost:

Interchange rate fees

The card networks – Visa, MC, Amex, Discover – all have tables of rates that are assigned to each and every credit and debit card available. Some of these tables contain hundreds of card types each with its own rate. These published rates are referred to as the Interchange rate for a card.

Think of it is the base cost of that card transaction. That interchange is what Visa and MasterCard make in profit on each transaction you run.

Discount rate fees

The discount rate is a tiny percentage (usually between 30 and 80 hundredths of one percent) added to the Interchange rate and represents the “profit” component that the merchant account reseller makes on your business for each transaction.

Per item rate fees

Each transaction has a “per item” fee. It represents a baseline fee for any transaction so that, if the transaction is particularly small, say $5, the reseller will still cover its costs.

Per item fees generally run between 5 and 15 cents per transaction with an additional 5 and 15 cents often added for address verification services.

Other fees

On top of all the fees mentioned above, there are additional fees added on to your monthly bill, for things like

  • PCI compliance
  • Statement and management fees
  • Government regulatory fees, network fees
  • Monthly minimums
  • Foreign transaction fees

Many of these fees are often obscure and hard to understand and may remind you of the bewilderment you feel when looking at your phone bill.

These other fees typically add an additional $10 – $20 or more to your monthly fees. And while these represent a small part of your overall bill, they are usually constant.

So Exactly How Are Merchant Accounts Priced?

We just looked at the four cost components ofimage a merchant account, but this doesn’t account for how they are priced by the reseller. There are generally two ways merchant accounts are priced for consumers:

Bundled or tiered pricing

This type of pricing takes large groups of credit card types and rates and groups them together into tiers for simplicity. These tiers represent the percentage and per-item costs you will pay per transaction.

This allows the processor to classify interchange fees under its own rate structure by assigning individual interchange categories to its pricing tiers.

Each reseller can bundle these tiers any way they want, which can be good, neutral, or bad for merchants, depending on how the groupings are determined. These tiers are usually referred to as Qualified, Mid-Qualified, and Non-Qualified.

Interchange plus, cost plus, or pass-through pricing

Another way of pricing merchant accounts is what is often called interchange plus, pass-through or cost+ pricing.

Cost+ pricing ensures that every card transaction is processed at its exact cost as established by the card industry. The reseller then adds their discount (or profit) to each transaction plus their per item fee to calculate the final cost. This makes this pricing model easier to understand.

One Example of Bundled or tiered pricing

The table below shows how a processor might organize nine common Visa interchange categories under a tiered pricing model for a retail business. 

image

So, for example, if a customer paid me $100 with a Rewards I card (in this example), it would be considered a Mid-Qualified level transaction. So 2.25% plus 31 cents, or $2.56 of my $100 would be paid back in fees.

Another example of Bundled or tiered pricing – how costs can increase even with the same rates!

Tiered pricing also makes it possible for a processor to increase your processing cost without increasing your rates.

“What?? how is that possible?”

Take a look at this chart. The card types and tiered pricing is exactly the same as the previous example, but if we move two of the card types that were in tier 2 pricing into the third tier, it ends up costing you more to accept those types of cards. I’ve highlighted those changes in red. Note the change in markup in the 4th column:

image

So using the same example, a customer pays me $100 using their Reward I level card. I would end up paying 3.35% + 31 cents, or $3.66 cents instead of the $2.56 in the previous example.

That’s $1.10 more for every $100 you receive!

Processors accomplish this by routing a greater number of interchange categories to the more expensive mid and non-qualified pricing tiers. And as a merchant, it’s almost impossible to understand how a reseller has structured their tiered pricing – the pricing itself is simple, it’s the details that matter.

Interchange plus, cost plus or pass-through pricing

Another way of pricing merchant accounts is what is often called interchange plus, pass-through, or cost+ pricing.

Cost+ pricing ensures that every card transaction is processed at its exact cost as established by the card industry. The reseller then adds their discount (or profit) to each transaction, plus their per item fee, to calculate the final cost. This makes this pricing model extremely easy to understand.

The table below shows three of the most common card categories along with their Interchange cost. Note how the discount, or profit, is the same regardless of the card used.

image

You can see how much simpler it is to calculate your cost. Simply add the discount to the published interchange rate and that’s your fee.

So, if a customer pays me that same $100 using their platinum cash back Visa, I would pay 3.65% plus 25¢, or $3.90 for that same $100.

Understanding costs is important, and now you understand a heck of lot more. But is it all worth it? will you be better off if you do accept credit cards than if you don’t? Believe it not, in spite of the fees and the mental circus of fee, most businesses conclude that it is.

In our next article on merchant processing for small business owners, we look at the savings or benefits you can expect from accepting credit cards.

How to Quickly See Your Customer Account Balances

Did you know that you can run a report in ClassJuggler to quickly list your Customer Account Balances? The report, which you can generate as a PDF or as a .CSV file (for easy importing into Microsoft Excel) generates a list of all customers and their current account balance and aging. 

The customer balances report displays customer balances and aging for a selected group of customers. You can choose to have them displayed by “invoiced” or by “total outstanding balances.” How to get there:image

This takes you to the Customer Account Balances configuration page: image

To run the report:

  1. Select a Report Type from the list
  2. Select a Report Format from the list
  3. To only list customers with balances, click the Only show customers with balances due checkbox, and then enter a balance amount of $0.00 or more in the Balances Greater Than field.
  4. Select either All Accounts or choose a specific Aging period for customer balances. If you want to also include all lower level aging or all higher level aging, select the appropriate option.
  5. Select “All” or a specific Pay Group to report on.
  6. Select “All” or a specific Status of customers to report on.
  7. Select “All” or a specific Category of customers to report on.
  8. Click Generate Report to run the report.

To get information on this report, here’s the direct link to the Customer Account Balances help page, which you can access from within your ClassJuggler login.

Here’s a good overview of the report types you can run with ClassJuggler as your class-based business management software, such as dance studios, swim schools, martial arts dojos, gymnastics centers, cheer camps, and more.

Ongoing Hurricane Relief

Our featured article in the September Newsletter, was about hurricane relief ClassJuggler is doing for those affected by the devastating hurricane in Texas. Over the next several weeks, with two additional powerful hurricanes would striking in Florida, and then in Puerto Rico, we’ve expanded our outreach.

Many of our clients reside in those areas damaged by the hurricanes, where wind and flood damage continue to plague families and businesses. In support of their urgent needs:

  • We’ve provided relief funding to those affected by donating to the American Red Cross;
  • We’re offering 50% discounts to affected customers’ ClassJuggler fees,
  • We’re matching your donations with a 50% matching donation* from any of our clients donating to help. We encourage you to donate too, by visiting the Red Cross Hurricane Relief website.

Please contact ClassJuggler for more information on our relief efforts and how to participate.

Let’s keep the momentum going on our donations. To quote the Red Cross program: “Come Together Now!”

Go gangbusters with ClassJuggler custom team training sessions!

ClassJuggler has free customer support – the best in the industry, according to one independent poll – but what if you’ve got a big school and a big need to get one or several of your staff members up to speed quickly? This can happen when you are new to ClassJuggler or when you are keyboard with handshiring new employees and need to give them a jumpstart.

For times like that, if you need that extra bit of help to get started with ClassJuggler, or maybe you just want to become an expert, where happy to let you know that ClassJuggler can put together an affordable training session for you and your team.

How it works

Our education staff is ready to help you reach the next level by creating a custom training program for you and your staff. Depending on learn8your needs, we can make it a general introduction – a full system overview, if you will – or a targeted session on a specific feature you want your team to start using, such as email marketing or billing, or whatever. We tailor-train your session to suit any need.

We usually perform these in an interactive webinar fashion – the most affordable option – in which all attendees are able to watch us perform steps from anywhere. This method is especially useful if you want your team members to be able to attend from any location, not just at your business.

Optionally, we can also come to your school or town to perform ClassJuggler training for the most interactive experience. This can be a great time to get away from your business for your team, where they can learn how to use ClassJuggler to it’s fullest potential.

Our educational services start at just $25 USD per hour for the first trainee, plus $15 per hour for each additional trainee. In-person sessions also require you to cover transportation costs.

Contact us today and let’s get started!