Cutting costs on expenses, without cutting the level or quality of those expenses, is one of the best and most efficient ways to make sure an organizations income is best serving and implementing its goals. This is true for all organizations and can be essential for nonprofits.
Here are six tips to reduce processing fees to make the most of your donations.
As a nonprofit - ask nicely and provide proof of your nonprofit status in order to see if the processor will offer a lower rate. Most contracts allow the processor to increase rates. They are usually required to notify you of the increase, but the notifications can be in the small print. If the processor does not want to budge on the rate – negotiate. Let them know you are looking for the most competitive rate. Some things are not negotiable when it comes to processing fees - the markup is not one of them.
Watch your rates:
Because most standard contracts allow for an increase in rates and any required notifications aren’t always clear – complete monthly audits of your merchant services statement. Check for billing errors, which are more common than we tend to think, and check for rate creep. It can be as easy as a quick call objecting to the rate creep to get the processor to waive the increase.
Research programs that can reduce your fees:
Many programs exist for nonprofits to reduce fees. For example, programs that cover most of the fees for donations, or programs where the donator can opt to use their reward points to cover the processing costs. If you do a little research, you might find that your processor offers these programs. If so, implement them as quickly as possible.
Is your PCI Compliance up-to-date:
PCI compliance forms should be filled out annually. Monthly fees from the Payment Card Industry (PCI) can build up indefinitely until compliance forms are filled out. This small step can save hundreds of dollars annually and usually takes less than 30 minutes to fill out.
Make sure you swipe cards and answer all questions:
Risk is the primary component of the credit card processing fee. The higher the risk of fraud, the higher the fee. Processors consider a credit card number that is entered by hand to be a higher risk than one that is swiped. However, it is not always possible to swipe or insert a card. If it is necessary to input the number manually - answer as many of the questions as possible. Answering any zip code, credit vs. debit, 3-digit code, etc. questions - lower the risk and therefore the lower the transaction fee.
Hire a professional:
An independent cost saving consultant will find you the lowest rates possible in your area, and can also track your rates going forward to make sure you’re never paying more than you should. They can look out for your best interests by providing objective advice to reduce your electronic payment processing spend and improve service.
Systematic analysis and auditing will:
- Uncover and eliminate hidden fees
- Identify and recover overcharges and billing errors
- Select and apply appropriate rate categories
- Ensure government legislation is properly applied