Saturday, February 14, 2009

Our salon has a credit card machine. Owner wants to charge us $1 per client + 5% of our tips. Is this normal? -

We have a credit card machine at our grooming salon. We work on straight commission and tips. There is no hourly wage. We earn a percentage of each dog that we groom. There is a tip line available on the credit card slip if clients feel that they want to leave a gratuity. Most of our customers do leave tips. The salon owner says that the machine and the tip line is costing her hundreds a month so she wants to have us give her $1 per client plus 5% of our tips. Is this normal at other pet grooming or human grooming salons? I know you can t give me an exact amount because it varies on the type of business, volume etc., but generally how much does the tip line cost and what is the average cost for a credit card machine per month?

Yeah, 5% is way too high - though it depends on the credit card that you re using -- I believe traditionally Amex takes the biggest percentage of each sale. There s also a rule, it was a MasterCard rule that you weren t allowed to charge customers more if they were charging. Now this doesn t apply here since you re not a customer, but the intent there is that they didn t want the use of a credit card to be perceived as a disadvantage compared to cash. In your boss s own way, that s what he s doing with you. I don t think it s specifically against their rules, but it goes against the intent.And as another poster suggested, it s not your fault people want to charge. It s your boss s decision to have the machine and he s done so because it s a sales advantage (or rather not having one would be a disadvantage).The $1 per client is bogus. Most POS vendors charge very little per month - if it s hundreds, they should find a different one. It s the percentage that s the big part, and if it s 5% it would only be because he has a bad credit rating or is considered a risk.

No, it is not really normal and is illegal in some states. Tell the owner that you are willing to renegotiate your contract but that what she is asking for is not reasonable.The credit card companies charge between 2-5% of the total transaction. A $1 fee per client transaction may be way more than that 2-5%. Sound to me like she is trying to get more revenue from you.

Credit card companies charge the owner of the service a fee for every transaction. On the plus side you may potentially get more business because a lot of people carry cards instead of cash. On the down side you have to pay all of the fees associated with accepting credit cards.

5% is too high. Maybe around 3%. I think merchants pay Visa and mastercard about 3% for the transaction.is she shuts down the line her customers will go away. that would be foolish way to save money. If you have any say in it tell her you will not tolerate it.

It kind of sucks for you, but also your boss needs to do whatever she needs to make sure her business is profitable.That said, you should confirm her exact expenses so you are not paying more than she pays. This shouold reimburse her, not be profitable for her.Her credit card fees can be set up various ways. Many charge a small fee per transaction ( a few cents) plus a small percentage. I usually see around 3% but it varies. Sometimes there is a flat monthly fee as well.My suggestion is to agree to split the percentage for the services and to agree to pay the percentage on the tips, BUT you should confirm with her what her fees actually are per transaction.

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