As a salon owner, offering credit card processing is simply a minimum requirement to support your clients. Unfortunately, what you don’t know could literally be costing you hundreds to thousands of dollars. A critical Metric that Matters to you should be your Effective Processing Rate.
Your effective processing rate is the true cost you are charged for processing each transaction. Whether you have a daily deduction or a monthly ACH debit from your account, you will want to understand this cost better because you are likely overpaying for credit card processing or unknowingly being taken advantage of. When determining a company to serve as your merchant processing partner, you should ideally start with a company you know and trust since that processor will directly affect your net income. This metric, your effective processing rate, is a simple subtraction calculation:
(minus) Processing Rate
(minus) Per-Transaction Fee
(minus) Sum of All Other Fees (unfortunately, including junk fees at times)
Additionally, there are indirect costs that most salons never calculate, including the time it takes to reconcile from your daily gross tickets to your daily deposit. There is a significant benefit if you can process through your salon software because reconciliation is virtually built-in.