All You Need to Know About “Junk” Fees, Statements and Selecting a Processor
By Bob Carr Chairman & CEO, Heartland Payment Systems | June 04, 2010
The majority of your reservations and payments are likely made over the phone or online with electronic forms of payment such as debit and credit cards. Accepting multiple forms of payment makes the reservation, check-in and checkout process more convenient for your guests, but processing these payments is a huge expense - exacerbated by the sometimes exorbitant fees payments processors sneak past you. There are three key things you can do to help contain these costs:
1) know what "junk" fees to beware,
2) understand how to read confusing statements and
3) learn how to effectively select a payments processor.
One way to reduce your costs is to recognize the "hidden" or "junk" fees many processors are notorious for charging. These charges are hard to decipher - especially if you lack the resources to thoroughly analyze statements. Yet, it is critical to identify all of the fees and surcharges - and who you're paying them to - so you can control your expenses and save money.
One of the primary card processing fees is interchange - the fee card brands charge for passing financial transactional information back and forth between themselves and your hotel, your payments processor and the banks that issue credit and debit cards. Many processors take advantage of interchange rate adjustments from the card brands - which usually happen in April and October. When the card brands increase their fees, many processors take the opportunity to mark those increases up even more, discreetly improving their own bottom lines without full disclosure and unfairly blaming the brands for the entire increase. Likewise, when card brand fees are reduced, you should see an associated decline in processing fees. Yet, many processors neglect to pass reductions onto their customers.
Security fees, membership fees, access fees and compliance fees are just a few examples of the many junk fees you may find on your processing statement if you take a closer look. There are many of them, so beware of: