Dr. Jeffrey A. Nichelini
American Canyon, CA
PCSO Bulletin Section Editor
Inspect Your Merchant Services Statements
Merchant fees cost my satellite office 4.2% of its collections in 2020. Monthly statements from merchant services are cumbersome, with hundreds of lines of long numbers and lots of commas and decimal points, and it never seemed like a good use of time to inspect them for discrepancies of small dollar values. However, seeing this large number staring at me on my annual profit and loss statement proved this philosophy to be incorrect. After a thorough inspection of my monthly statements, many cost-saving discoveries were made.
The merchant service provider I use is very common among orthodontic offices, but it will remain unnamed. The last section of the monthly statement lists “other fees” charged, and it represents the biggest sources of wasted money. Specifically, for each month in 2020, there was a $39 charge for “Reg Comp,” $45 for “CE Suite,” and $25 for “Check Fees.” The Reg Comp fee appears if your office does not complete a regulatory compliance tutorial online annually. The tutorial is quick and easy to complete, but somebody at your office needs to remember to complete it every year. My office used to be diligent about this, but one year, the reminder email was overlooked, and consequently we have paid $39 every month ever since. The CE Suite fee was introduced in August 2019 or a feature that required an opt-out to avoid being charged. The feature is completely irrelevant to my office and very likely to most orthodontists. Please do yourself a favor and look at the last page of your merchant service statement to make sure you are not wasting $45 every month. The Check Fee is for the privilege of allowing patients to make payments on our credit card terminal using their checking account information, much like a digital check. To clarify, this is not a fee for a transaction, just the privilege of being able to complete charges in this manner. Apparently, in the past five years I have had a total of six patients pay with this feature, but I have paid $25 every month for five years to provide the option. Eliminating these three fees will save me $1,308 this year!
There is also a “Discount Fee,” which is the amount of money kept by the merchant for each of your transactions. The total discounted amount is calculated by adding a fixed amount for each transaction and a percentage of the total transaction values. The fixed amount that each transaction costs changes depending on how the transaction is completed. In my office, we discovered that a setting in our software omitted the requirement that patients enter their zip codes into the terminal when completing payments. Payments were still approved but with a higher fee than if the zip codes had been entered. The Discount Fees, both fixed amounts and percentages, attached to your account can also change with time. It was an unpleasant surprise to discover the fees charged to my account were much higher in 2020 than when the account was opened. A call to the service provider initiated a renegotiation that brought them down significantly.
Merchant service fees are small for each transaction but accumulate and result in big dollar expenses. If you have not audited your statements recently, you might have many thousands of dollars waiting to be easily saved