The Dealer Playbook
The Dealer Playbook

Episode 499 ยท 4 months ago

Amberly Allen: Save 75% On Dealership Credit Card Processing Fees


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Amberly Allen is the CEO of Dealer Merchant Services, a firm that is helping car dealers save up to 75% on their credit card processing fees. In this episode of the Dealer Playbook, Michael and Amberly explore how dealers can save thousands of dollars per month by reframing the way they handle credit card processing.

How Car Dealers Can Save 75% on Credit Card Processing Fees:

00:53 - Jokingly Michael and Amberly laugh about how this is probably the least sexy topic to ever be discussed on the show, but at the end of the day, what's sexier in business than keeping more money in your pockets?

01:57 - Amberly got her start selling direct mail to dealers and eventually started her own digital agency. During her time building the agency she started hearing about how much car dealers were spending on credit card processing and she determined to find a solution.

03:06 - When making any changes to how credit cards are processed, it's important to find a solution that is both legal and won't destroy CSI.

05:49 - For every $100 dollar that gets spent, $2 dollars of that goes to credit card processing fees. Credit card processors don't want you to know that there are limits to how much they can charge so they're not in the current hardware that many dealers typically have in the showroom.

07:49 - Amberly encourages car dealers to look at how much they are spending on fees and question whether or not it's necessary.

Listen to the full episode for even more insights and context about providing a killer customer car shopping/buying experience.

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Thanks, Amberly Allen

If you enjoyed this conversation with Amberly Allen, please let them know by clicking on the links below and sending him a message.

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Get Your Google vehicle adds up and running fast with flex dealercom. The car business is rapidly changing and modern car dealers are meeting the demand. I'm Michael Cirillo and together we're going to explore what it takes to create a thriving dealership and life in the retail automotive industry. Join me each week for inspiring conversations with subject matter experts that are designed to help you grow. This is the dealer playbook. Hey Gang, welcome back to this episode of the dealer playbook podcast. You Know Me. We've been together for like, what, nine years. I like to bring in topics that we don't get to hear a lot about. I mean, it's always sales, it's always an eyes, it's the car, but I don't know, I don't know how many more ways we can talk about negotiating a car deal and so we're always looking for new, relevant information that can help this industry move forward. And no better person to help talk about that than our guest today. She is the managing partner of Dealer Merchant Services. They're on a mission to well, let me just put it this way. She'll speak to it better than I ever could. Save you a crap ton of money and remain compliant and keep the CSI hi hi high where it should be. Amberley Allen, thanks so much for joining me on the dealer playbook podcast. Michael, thanks so much for having me. I'm thrilled to be here. We're going to talk about probably the least sexy topic in the world, credit card processing, right, but it's also a necessary evil, so I'm thrilled to be here. Well, look, I was I was on your website and I'm seeing savings between five and fifteen thousand a month and I'm like, well, okay, maybe credit card processing sounds unsexy, but saving that amount of money, I mean this is a good, decent six figure savings potential every single year. And I think about wall hey. What could a dealership do with that extra money? Back in the in the pocket, and I it reminds me, amberly, of what my dad used to say growing up. He says how much you earn does matter, but how much you keep matters more. Question. And so first it, first and foremost. How did you get into dealer merchant services? How did you decide to start something like this up? So good question. It two thousand and five I started my marketing company. Admittedly, I started in the business when I was twenty three. I was a weepop selling direct mail to dealers and if it tells you a little bit about how long I've been doing it, it was back when they had radio remotes and greets and gifts and balloons in the whole nine right. So That's how long I've been handling the marketing side of things for dealers and I still have that company. But I took a little bit of time off and when I got back...

...into it I kind of called it Di Marketing to and when you know, direct mail has changed and all of those things. But I reached out to every colleague I knew in the business. Hey, what's working, what's not working? What are you seeing out there? And obviously on the marketing side we moved very quickly over to digital. But at the same time I started hearing about these law changes and I started hearing okay, well, this is happening and dealers are spending a ton and credit card processing and so I've been really lucky that I have a dealer body that I work with that I could see counsel from like Hey, what do you think about this. Do you think that it would work in the dealership space? We're seeing it at TACO stands, we're seeing it in universities, on our utility bills, ben Mo cash apt, but will it work in the dealership space? And I asked a ton of people and some of their first questions were liable, is it legal? Okay, so I went back to the drawing board. Okay, did a ton of research. Okay, looks like it's illegal. Okay, let's find out more. And then, since I've started down that path, even more states have become legal, and so I have a merchant services attorney on retainer and really just making sure that no dealers going to get started down this path if they can't clear, you know, just making sure it's legal and compliance. So that was step one, and then, of course, step two is, what about my customers? How is CSI GOING TO BE EFFECTIVE? You know, we're not trying to, you know, trip over dollars to pick up pennies here. So again, back to the drawing board. Okay, how do we, you know, Commune Kate this to our customers in the right way? And so we created a dealer Merchant Services University to certify the staff on the word track and all of those things. So and then of course the next thing is if the controllers not happy, nobody's happy. So to how do we implement this? You know, in the accounting department and you know my right hand is a former controller, and so we figured out how to navigate all that. But very specific to automotive. Is the only way this thing will work. Yeah, it sounds like a ton of work, is it? Is it? Do you have a passion for keeping track of legal compliance? God, no, now that is so boring. But it's also it also was step one right. But what I realize pretty quickly is that dealers wanted to save this money. But if we had one dealer that was a bad apple that did this all wrong, then they go back to their twenty groups and say, okay, I got sued, my customers are pissed off, this wasn't worth it. And so we kept going okay, if we do this the right way, if we do it for automotive, it will work. It will work, and so that's where I got to a point where, if they don't go with us, they need to make sure they're doing it the right way. And you know, naturally people will go to us if it makes sense right. So that's where I kind of started down. Let's focus on educating the dealer body and being the foremost expert and the rest will work itself out. I love it. And so I see that there are of variety of things you do.

You mentioned the university, but when it comes down to and I'm looking here, it says proprietary solution to help dealers save up to seventy five percent of their credit card processing fees without disrupting CSI. What does that look like from where the rubber meets the road? What does that what does that mean? You go into a store and are you swap it out? Hardware are you like? What does that actually look like and what what is the potential disruption that you're seeing to CSI in current models? So great questions, twofold. So first things first. We want to create some awareness with the dealer body on how much are you spending and so on. Average, every hundred dollars that gets spent, two dollars of it goes to credit card processing. But what's interesting is that in two thousand and ten, with the dot frank out, they started regulating debit card costs to the businesses, but they don't. Your credit card processor doesn't want you to know that. So they're not in the current hardware you have. Typically you don't have an opportunity for the customer to put in a pin all these various things because they basically don't want you to see under the hood. And so when we do these webinars to start teaching people, I will it's it's hard to say, but there's probably sixty percent of dealers that don't even know what they're spending. Right comes out every month. It's not line items on their financial statement. It's just an outside services. It's being debited at the busiest time of the month for the controller and so when we survey the dealers, they say I haven't looked at it in six months or I don't know the last time I looked at right. And so now there are some that know their numbers and think there's nothing they can do about it. So the first thing we want to do is make sure we create that awareness on look how much you spending. Even if you don't go with a second provider, you should get a second opinion. You may need more updated machines, for example, if you don't have a chip reader these days, you are going to get penalized for it because there's a high let higher level of risk. So that's just one thing that dealers need to know that they could be saving money right off the rib and then from there we actually do bring in brand new machines and that is required for for our program or, frankly, any other program that synonymous is that the program the machines themselves are backed by US patent and they differentiate between credit card and a debit card, and that's part of the regulations and the Dot Frank Act and there was even a supreme court case and a class action. Laws. Of these are all really important cons and so the machines themselves differentiate between credit and debit because you're not legally allowed to add a surcharge or a three percent cost on top of a debit card. So trusting. That's where the proprietary peace comes in and that's where it's really important that dealers don't go. Okay, this is a DIY project. I'm just going to add it to my ro no, no, this is not a diy project. So is this...

...are supper comes in in the machines. Gotcha. So is this? I mean, being a Canadian, this is the one thing where I was like Canada might be ahead of the game for once as compared to the United States, because I might have been, I don't know, ten years old, like we're talking mid mid S, early to mid S, when you know chip card readers and all those sorts of things. And I mean you would come down to the United States to visit and they were still bringing out that credit card carbon copy, click, click thing and I'm like, what is happening here? Aren't they supposed to be more advanced than us? But to your point, it's interesting to me that I can in Canada, I have a debit card, which which means money comes out of your checking or savings account. That's right. It can be a visa check card, but it's never looked at or treated like a credit card. It's just like it's a visa. It's visa, meaning you can use it at any terminal that accepts visa, but it's not looked at. Is that what you're talking about here, where the machine can say, oh no, this is a debit out of the actual bank account transaction versus out of a credit card account. Well, so, all of that's absolutely true. As it pertains to credit cards, there are two rails. You've got the debit and banking rail right, and there's less liability and risk there because it's coming right out of your account, right, and then got the credit rails that have to pay and say okay, Mrs Jones has this much credit available, paying back and say yes, approved, and there's just higher level of risk as far as that goes. So you got two different rails and therefore when they started regulating it, they said, well, this cost less because there's less liability and therefore the businesses should have to pay less. And so that's where things came in. And let me give you a real world example. You've got a hundred dollar row and as it's it's today, the dealerships only keep keeping ninety eight. But if you give the customer a choice and say look, Mr Customer, your Aro today is one hundred and three if you use your credit card, but it's only a hundred if you use cash, check or debit, how would you like to pay? And so the benefit is the transparency and the dealership keeps a hundred dollars of now that credit card transaction. So that two dollars is coming back to them, but the benefit is we didn't have to raise our prices across the board. I mean, frankly, Mike, this is the only fee that we're not passing on to the customer that we legally can. I mean we go back to shop supplies, we go back to doc fees. At the end of the day, this is the one thing that either they don't know that they can they don't feel like they can do it safely without disrupting the apple card and making sure that they do it within compliance. So again, there's there's some different pieces of it, but that's where that that one hundred and three comes in and you can get that seventy five percent or so in savings because they can't charge the customer anything additional on debit cards, and you even alluded to okay, debit or credit. Well,...

...with our program it's what's called been range, and not to get too far out into the technical weeds, but it actually can tell if the customers using a debit card or not. Right, it can show based on the bend that this is a banking rail and so therefore I can't charge this additional three percent, and it does that all automatically. It does it all automatically with our machines and they're all customer program for the store. Now you had mentioned you've mentioned a couple of things. The Dodd Frank did I hear that right? The Dodd franked act? Yeah, so in two thousand and ten it was the actually the derban amendment which was a part of the Dodd Frank Act. Okay, and that's why they started regulating debit card fees, especially with the big banks with over ten billion in assets. Gotcha. So from a dealer's perspective, we hear this, I go man up to seventy five percent of the savings and all these sorts of things, new machines, all of that. Does this very state by state? Is it? Why is it a federal regulation? How does that work? Great Question. So forty eight of the fifty states allow for search arge. So the ban on stear charge has been lifted. The last two states are Connecticut in Massachusetts, and we anticipate there in the docket. We anticipate them switching relatively soon. So right now it is a state by state and there's also specifics based on certain states. For example, Colorado can all charge a Max of two percent on the search arge, and again that's why you want to have a partner that can help you navigate that. And then in New York, for example, we have dealers there. Well, you have to be specific on showing the customer both prices, both cash and credit, and so we have tools for them to be able to watch according to compliance as well. So those are just some of the components there that you got to make sure of. Here's what impresses me. Just as a little bit of a Sidebar, I asked you point blank if you were passionate about this. You're like, heck no, but it's clear that you're passionate about helping dealers and helping this industry, and it to me that's The testament of you can get your hands dirty and think outside the box to bring a solution to people that actually serves them, versus what, like everybody else tends to do. They're like, you know, I think I'm going to be an entrepreneur and clubhouse told me that all I need to do is create a seven dollar pdf on whatever. You're like, screw that. I'm going to get into the weeds here and I'm gonna, like you know, to me. I'm just so impressed by it because it's not something my brain would ever do. I'd be like, Um, the dealerships need a guitar player, you know, like my brain wouldn't go to what's that like? Scary, unsexy, deep regulation. And you went there. You were like no, I went there what. I'm curious as a little kind of to know you. What part of you is like?...

That's me. I got to do that. So it's nice of you to even ask. So I'm a I'm a third generation entrepreneur. My Dad and and Granddad and all the powers that be within it were entrepreneurs and at twenty four is when I started my marketing company. I felt like I could do it better and with more integrity, and I'm grateful that we've sold over forty million dollars in marketing to dealers. Sense and with all that being said, I really have a plan of decent amount of cart biscard tissue. Right. I've made some huge mistakes and I think at the end of the day I felt like it was not only a great idea, but dealers have given me tremendous opportunity in my career. Here I am, eighteen years later and dealers are some of the best entrepreneurs out there right. They know their numbers. They work harder than anybody I've ever seen, and you know, it's twenty these things. They help their community, their philanthropic efforts are beyond measure. I mean there's all these things and I don't know, I guess it just stuck that I loved the automotive space. It was just the right Gig for me and I always felt like I'm really lucky to have the right Gig. So many people aren't in the right seat on the bus in their career and for me I've just I've been there and it's certainly there were some moments where I was in the corner in the fetal position, going what in the world am I doing right? What? What am I thinking? You know, I don't know why. Credit Card process thing, I don't I really just felt like I had something special and I started with with one. I mean, that's all there is to it. I had one dealer that I had worked with on the marketing side. They knew I could execute and frankly, just at that point I felt like he said he give me a shot, and then now we have almost a hundred dealer since. Wow, you've got a you've got a fighter's spirit. Is that accurate? Also? That's accurate. But part of that too, Michael, is I had a brain tumor three and a half years ago and you know, we won't get too far off topic, but that, I would say, gives me a huge amount of perspective in my life, and so fight is definitely a part of it, for sure. I love that. You know, I've never had to deal with a tumor anything like that. My my journey was like severe depression, suicidal depression. I don't with that for the better part of a decade. But I understand what you're saying and that when you recover, it shifts your it just shifts the lens by which you see the world, doesn't it? And and especially the way I see this industry. You know, some of the like you were saying just some of the best people I've ever known in my entire life work rate inside of the auto industry, and I can understand how that's fueled my desire to do things that I probably wouldn't otherwise do, and that's kind of what I'm picking up from you. Well, I mean I joke because most of our dealers play golf, right. That's how big the tuber was. So I tell you know, anytime you're playing golf,...

...think of me. But even what you've been through, I mean there is there's a lot of as far as recovery and the things that happen on the other side of it, and it's terrifying and all of those things, but it's true. I mean I've been given a tremendous amount of opportunity within automotive there's just there's no question about it. Let me ask you this, because we've talked savings, we've talked about, you know, the proprietary stuff, the hardware in your process and you've got a university, which I want to talk a little bit about in a minute. Why, if any, is there? Is there any hesitation to like, why is this not a no brainer? Why? Why Do More Dealers Not Join The bandwagon? So for us, I feel like so we've had this exponential growth and we've had we've grown over twozero percent in the last twelve months and part of that is because the consumer conditioning has changed. Right, we've seen the way that people pay for things is changing. Cash APP and Venmo have nearly a hundred and twenty million users on just those two platforms alone and they have this same policy. Credit Card is additional three percent. If you use your bank account, it's nothing additional, and so I believe that just the subset of customers that are used to it is changing. Dealers also know, I mean just to give you an idea, on the five to fifteen thousand we have calls with dealers every day. That could save one million two million dollars over the next three years, and so you know the hesitation is always pow, are my customers going to react? And there certainly is a subset of customers that maybe older. Haven't used Venmo, haven't used cash have they want their American Express points. They don't want any person back right and so before we ever get to the store we communicate that we're not trying to hide from it. There is going to be some people that will ask and some people that may push back on it. At the same time, you at the store level have the autonomy and now the ability to be much more generous, should you choose to. Okay, Mrs Jones, I understand you've been coming here for fifteen years. I'm going to go ahead and waive this three percent. Give you that three percent off this time, but just know for next time. You know next time you come in. And we're simply doing this to make sure that we have more resources for our employees and our and our facility and that sort of thing. And so I think it's important to note. I have a dealer that got to raise their minimum wage because they could save the enormous chunk of chains twenty grand a month. So I think we just have to see why are we doing this? You know, what is the point? At the same time, we see about less than one percent of people pushed back on it and we give the dealers the tools to make sure. How do we communicate that to the customer ahead of time so you mitigate any heat and if you do have heat, we tell him never let the toothpaste out of the tube. Don't ever let it get past you know a point where you've got this frustrated because smers they deal with heat all day every day.

They know how to handle this right. Just fix it and get on down the road. Yeah, Oh man, that makes perfect sense. Talk to me a little bit about you. You'd mentioned you have a university. Is that built to train on the implementation of your product in your service. It is so for us, we feel like that's where we shine. Is Me and my executive team have over seventy five years in the business. My vp as a former controller, thirty years controller with vantile that's now bursture Hathway, and and then I've got another Gal that's been twenty eight years in the business and she actually focuses on the launch and we reverse engineer this in a way where we understand the steps to make it as seamless as possible. And but not only do we show up on site at the dealership. oftentimes some require virtual because they're smaller or only doing one department, but we show up at this door. We don't just send them a box of machines and a one eight hundred number and wish them good luck. We do a huddle beforehand with all of the management and then we do a full training program so we actually they go through dealer Mers and Services University and get a certificate at the end of it to make sure they understand. Why are we doing this? What's the word track? You know, what's the point? What is the point of all of this? You're going to make me fly into a Hornet's nest, supposedly, and how do I how do I mitigate that? And so before we ever get there, we make sure that they're trying going ahead of time. They know how to communicate this in a way that they can mitigate any heat. And they're all certified by dealer Merson Services University. Amazing this is. And we offer training. We offer training into perpetuity as well. I mean, we aren't just going to you know, it's these things were sometimes they need some handholding and that's okay. Hey, I got a client that they keep saying this, will figure it out on your own. Right, right, exactly. Hey, guys, something's going wrong with my machines, or something's happening with this customer in their debit card, whatever the case may be. You know that White Glove Service is really where we shine. Yeah, this, this makes a ton of sense to me. I mean why would I not want to recoup this, this money? And, like you said, I love that there's dealers out there. They're saying, Hey, now that I've recouped it, let's reinvest it back into our people. I love that. I could talk about that all day. I'm not going to do it to you, but that's I just love that element of these strong leaders in the industry and you know, it's just been such a delight to spend some time with you today. How can those listening get in touch with you? So I'm all over linkedin. You know we're trying to continue to educate the dealer body. So amberley Allen on Linkedin, and so please reach out connecting me. I'd love to connect to all your listeners and our website is dealer merchant servicescom. So pretty simful there. Up, I'm Michael...

Sirillo and you've been listening to the dealer playbook podcast. If you haven't yet, please click the subscribe button wherever you're listening right now, leave a rating or review and share it with a colleague. Thanks for listening.

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