Manndible Café Uses Free Online Comparison Shopping Site to Reduce Inflated Processing Fees, Slash Card Expenses by 40% and End Contract Nightmare that Sapped Profits and Owner’s Patience
“How can I be paying more?” an outraged Pam Gueldner wondered. As co-owner of the Manndible Café, Cornell University’s premiere sustainable eatery and coffee shop, Gueldner was stunned when she saw her credit card processing expenses go up, despite having just switched to a new processor that promised to lower her costs.
The salesman who convinced her to switch seemed helpful and straight-forward at first, and the contract offered a lower interchange rate and even some reductions in per- transaction fees. “It promised to save me a couple hundred dollars a month, which isn’t a lot, but every little bit helps,” Gueldner recalls. As a new business, with so many things on her plate, it looked like a good opportunity to save some money. “In hindsight, I wish I’d shopped around more before signing. It would have saved me a lot of money and a year’s worth of headaches,” Gueldner says.
A Complicated Process
It’s a common problem for many small businesses. Credit card processing fees are notoriously inflated, with contracts full of hidden costs, “gotcha” clauses and other traps that hook small business owners with the promise of saving them money on this necessary expense.
In the case of Manndible Café, not accepting cards is simply not an option. The vast majority of Manndible customers—Cornell students—are accustomed to using their student IDs to pay for food in the dining hall. Like many other people these days, they just don’t carry cash. Because Manndible does not participate in the student dining plan, customers instinctively reach for their credit card to pay for everything from a $.50 banana to a $6.50 burrito. In fact, the average transaction is just $3.50—quite common for a coffee shop, but relatively low compared to other restaurants or retail outlets.
“Because we have such high volume, but low per-transaction amounts, we were getting hit with tons of fees, even after going through the effort to switch to a new processor,” Gueldner says. Manndible had paid around $24,000 in processing fees the previous year with the first company, and was already up to $34,000 in less than 12 months with the new company.
“It was unbelievable. Even the sales guy couldn’t figure out how to make a direct comparison between the old and the new fee structure to help me understand why the cost had gone up,” Gueldner says. “If they can’t figure it out, how can I? I’m trying to run a business here. Who has time for this? That’s how they get you—they know you don’t have time to figure it all out and they make it as difficult as possible in order to suck you in.”
The Nightmare Continued
When a mistake in the setup of her account with the new processor resulted in more than $15,000 worth of transactions getting held up and not being deposited in her bank account for over four months, Gueldner had finally had enough. After going to battle with banks and fending off an attempt by the processing company to rope her into a 3-year deal on the questionable contract, she looked online for help.
“It was such a nightmare. All I could think was ‘Please, God, let there be someone out there who can help me figure this out,’” she said. “I found FeeFighters and got an immediate response from Stella, who spent the next few months helping me work through the mess over email and by telephone. It was amazing.”
FeeFighters to the Rescue
Stella Fayman is marketing manager at FeeFighters and works every day to help small businesses cut through the chaos to find the best deal on payment processing from the most reputable companies.
In the case of Manndible Café, their low transaction/very high volume situation was a challenge. But, with Fayman’s diligent attention and invaluable assistance, FeeFighters was able to hook Manndible Café up with the right provider that lowered her processing fees by a whopping 40 percent, cutting her out-of-pocket expense by $7,000 in less than a year.
“Unfortunately, we see it all too often that small business get ripped off by credit card processing companies. Manndible certainly wasn’t getting any extra special service for that extra $7,000 they were paying,” Fayman says. “The whole system is broken—the processing companies work hard to keep it very opaque. We’re trying to restore some transparency and help small businesses get a better deal.”
FeeFighters provides a free online comparison engine that lets business owners enter some basic information about size and scope of their processing needs (number of transactions, average size, etc.) and instantly get bids from top-tier processors for apples-to-apples comparison. Unlike lead generation sites, merchant information is kept confidential and shared only when a business owner selects a processor.
Participating FeeFighters processors have all been vetted and must adhere to strict rules for transparent pricing and contract clarity to ensure business owners won’t be taken advantage of or sideswiped by hidden costs. The site works off a model similar to that of the Priceline or Expedia travel sites, and is just as fast and easy to use.
Even though they’d found a new, much better deal through FeeFighters, the nightmare wasn’t quite over yet for Manndible. When they decided to make the switch to the new FeeFighters provider, the old processor not only cancelled their service abruptly, leaving the café with no credit card service for half a day—a $4,000 loss of business—but, also slapped them with a $1,000 early termination fee, which had been automatically deducted from their checking account. The obscure early termination clause was buried in the fine print of a terms and conditions attachment—not in the contract itself—that Gueldner says she doesn’t even remember seeing. FeeFighters helped her dispute the charge and recover the money.
“We see businesses get hit by that cancellation fee all the time,” Fayman says. “We don’t allow cancellation fees on the FeeFighters marketplace.”
Real Bottom-Line Savings
After a year-long process, filled with overwhelming frustration and stress at nearly every turn, Guebner is now finally able to get back to the business of satisfying her customers with her café’s unique blend of local fare served in sustainable packaging. With the money saved in lowering the credit card processing fees through FeeFighters, Guebner says she can now invest that money directly into the café. She’s already leveraging the savings to get a loan to expand the business.
“FeeFighters helped me with all of this at no cost. I could tell they just wanted to help me get the best rate and I immediately felt like I could trust them,” Guebner says. “It was so refreshing and such a contradiction to the sales guy I dealt with. He didn’t listen to me, didn’t take the time to understand my business—he just pushed through his own agenda. FeeFighters helped me cut through the jargon and make the best decision to save money and help me grow the business.”