Negotiate Credit Card Rates and Save Big


Poring over line items to make cuts in a budget is tedious, stressful and time consuming. But as every small business owner knows, it’s also necessary.

And if you’re looking at making staff changes, it can be downright painful. But Jim Pacifico, founder of World Class Financial Services, says there’s one item that’s simple and painless to adjust—your credit card fees.

“People don’t pay attention to them,” he says.

“They pass right by it in their budget, and if the P&L isn’t benchmarked for them and that number doesn’t show, they aren’t going to know.”

Negotiating Your Rates

World Class Financial Services offers financial support to the salon and spa industry with accounting, benchmarking and analysis of financial statements.

“We give our clients two P&Ls,” Pacifico explains. “One with benchmarks and one without. This type of accounting allows salons to see exactly what’s in their budgets. A lot of salon owners are too tired and afraid to look at it, but we’ve created a P&L with line items that aren’t scary to look at, and then benchmark it.”

This user-friendly P&L also takes the guess work out of a budget that may otherwise seem intimidating.

Credit card fees, which can range a full percent or more, are an area Pacifico and his team consistently negotiate for their clients.


“We have worked with Chase bank over the years to get charges down to less than 2 percent for some salons, when they were between 2.2 and 2.6 percent,” he says. “You can always go to the credit card company and negotiate.”

Salons doing less volume should be just as aggressive in contacting their credit card companies as larger-volume businesses.

“It’s not the volume of the the salon itself,” Pacifio says. “It’s how much is being charged to credit cards.”

Another key to successfully reducing credit card charges is the salon’s software company. SalonBiz works with salons to get their charges reduced.

“SalonBiz has the relationship with the bank and will analyze and negotiate for the owner,” Pacifico says.

“Many salon owners don’t pay attention to a lot of the benchmarks—tech payroll, frontline payroll, accounting, lawyer fees—things that end up higher than what they should be,” he adds.

Pacifico says he has seen credit card fees go up into the 3 percent range, which can really impact a bottom line, depending on how much credit card usage is happening in the business.

“The major portion of business is done on credit cards—75 to 80 percent,” he says.

“If you’re a multi-million-dollar salon, .7 percent could mean a lot of money to you.”

At the minimum, Pacifico recommends negotiating with your bank annually. And if your business is growing rapidly, every six months.

Talk to your software company or accounting firm as well to be sure credit card fees are included as a line item on your P&L.

Jim Pacifico, World Class Financial Services source: Salon Today

Jim Pacifico, World Class Financial Services | source: Salon Today

“It’s important to remember it doesn’t matter what your volume is—focus on the percentage of clients using credit cards, and know what you’re being charged per transaction per credit card,” Pacifico says.

“This is an area you can renegotiate rates, save your business money, and not have to cut costs or affect your guest experience.”


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