This value add service aligns with our goal to make our clients’ lives easier by streamlining their process and helping them to run more efficiently.

Contact Us: https://www.magothy.biz/contact
WooPOS Free Trial: https://www.bit.ly/trywoopos

BEGIN TRANSCRIPT:

Ladies and gentlemen, boys and girls, it’s your boy, Jaron Rice, founder and CEO of Magothy Payments, Maryland’s highest-rated merchant services provider. Back from hiatus. Been in the lab cooking something up. No. But seriously, typically first quarter and the first half of second quarter is our busiest season for new account acquisition, so I’ve been grinding, getting those accounts, trying to make up for 2020, which kind of sucked, right?

I have a very, very, very special announcement about a new product that we are offering. Now as many of you know, we primarily focus on card-not-present business, and we also focus on omnichannel business. On the omnichannel side, we have recently partnered with a point-of-sale system called WooPOS, and WooPOS is great for the omnichannel merchant that has a retail store location, a storefront, that is also selling items and services online through an e-Commerce website. So as the name might imply, WooPOS, they’re not affiliated with WooCommerce, but their POS system integrates with and syncs with WooCommerce.

Now, this means that if you are a retailer that has a physical store and an e-Commerce store, this single point of sale can manage and maintain your inventory across those two environments. One of the biggest of challenges that those type of retailers have is they may have widget A. And their inventory shows that they have two sitting on the shelf, and somebody walks into the store and buys those two that are sitting on the shelf. The website probably doesn’t immediately, or if at all, reflect that they no longer have widget A in stock because someone came in and purchased them.

With WooPOS in their inventory management, when an item is purchased in-store or online, it is removed from the inventory so that you can’t oversell an item that you don’t have, which is fantastic. Now WooPOS has a direct integration with Elavon Converge gateway which is wonderful because you can utilize one gateway for the point-of-sale side and that same gateway can integrate with WooCommerce on the e-Commerce store side, so all of your transactions flow through the same gateway. And from a hardware standpoint, for the customer-facing PIN pad using the Ingenico Lane 3000 device, that integrates with Converge.

One of the best things that I really like about WooPOS is that it is a Windows-based platform. One of the biggest challenges that you have in the point-of-sales space is that a lot of these programs and software are designed in a way to work with specific hardware that you have to buy from the manufacturer which tends to cost more, and it makes it more difficult to replace or fix or troubleshoot. WooPOS is a Windows-based point-of-sales system, so you’re using a typical desktop, right? So you can use a small-form factor. You can use an all-in-one which we’re looking at doing that has a touch screen. You can use a standard cash register with a USB-triggered cash drawer for when the sale is completed, and all the peripherals – the printers, the barcode scanners and things like that – you can use generic stuff that you buy on Amazon to work in unison with this platform.

Because it’s Windows-based, it’s much more stable, and they’re using standard Windows drivers, which will make it very easy. The cost barrier to entry is very low because a lot of this equipment, especially the computers, the business may already have. We’ll put together some packages that will bundle all of that if a merchant is starting from scratch. But the installs that we’ve done so far, the vast majority of the hardware the merchant already had, so we’ve been able to use the hardware that they had and save money and time on that part of the installation.

I will post an affiliate link in the description here if you want a 30-day trial, but, again, we’re really, really excited to partner with WooPOS, looking forward to some great things. I’ve started using it. I’m a huge fan.

One of the things that I like most – a lot of things I like most, but another thing that I like most – is the owner Benny and their programming team, they are on the ball. We’ve recognized a couple of things that needed little tweaking and changes to personalize it for our merchant. We sent the request over to the development team, and within a couple of hours they had it changed and up and running on their platform, which is something that you really like to see from software developers who aren’t rigid and think that they know best how to use or develop the system. But they value the feedback from their merchant services provider partners as well as the merchants, the business owners themselves.

That’s what I wanted to update you on. Again, I know it’s been a minute. We’re going to try and work through and get some regular content going, but it is RV season and I’m all about that glamping life. So I’m going to be in and out quite a bit.

I hope this information was helpful. I hope you check out WooPOS and please don’t hesitate to reach out if you have any questions or would like to schedule a demo. All right. That’s all I got today. Have a good one.

The post HUGE ANNOUNCEMENT!! appeared first on Magothy Payments.

This tax would be levied against digital ad providers who make more than $100M a year in ad revenue nationwide, and could be up to 10% on the revenue that they generate on said ads running in Maryland. For context, Facebook and Google made roughly $2.5B in ad revenue in Maryland last year, which would’ve generated $250M in tax revenue. The obvious downside is that this tax imposed on the tech giants would undoubtedly be passed along to small businesses using the ad services who are already struggling.

The good news for Maryland small businesses is that this lawsuit will probably be tied up in courts for the foreseeable future.

BEGIN TRANSCRIPT:

Ladies and gentlemen, boys and girls, it’s your boy Jaron Rice, founder and CEO of Magothy Payments, Maryland’s highest-rated merchant services provider. I came back today to give you an update on the Maryland digital ad tax.

If you don’t know and you’ve been living under a rock or you don’t live in Maryland, the Maryland legislature passed a bill that would impose a tax on revenues that are generated for online ads here in Maryland when the company imposing them has more than I think it’s $100 million a year in ad revenue. So it targets big tech companies like Facebook and Google and places like that, and it would levy up to a 10% tax on the revenues generated for digital ad sales here in Maryland.

They were estimating that it would raise about $250 million in tax revenue which, of course, anybody with a functioning brain understands would be passed on to the small businesses who are actually using these services. So that was the bad news.

The good news as of right now is that companies are coming out of the woodwork to sue the state of Maryland because of this unconstitutional and asinine piece of legislation. Notably, the U.S. Chamber of Commerce and the Internet Association, they are obviously suing the state of Maryland because the law is unconstitutional. It’s predatory, and it specifically targets digital ads while ignoring print and television and other avenues like that.

So this legal battle could be in the works for a while, and so the good news is hopefully it gets overturned and is deemed to be unconstitutional so that small business owners like us don’t have to shoulder those costs.

Keep your fingers crossed. We’ll bring you any updates as they happen, and I hope you guys are having a wonderful day. I’ll catch you in the next one.

The post **UPDATE** Maryland’s Digital Ad Tax appeared first on Magothy Payments.

We’re literally going through a pandemic and small businesses are barely surviving as it is, and these people think that more taxes are the answer. Who exactly do they think is going to be paying those taxes? Facebook? Google? Psh. Those guys will just raise their prices to offset the tax loses so that small businesses carry the burden.

This is what happens when government runs amok. These people must be stopped. Governor Hogan has already vetoed the bill, but they’re scraping together the votes to override his veto.

BEGIN TRANSCRIPT: 

Ladies and gentlemen, boys and girls, it’s your boy, Jaron Rice, founder and CEO of Magothy Payments, Maryland’s highest-rated merchant services provider.

I wish I was coming to you under better circumstances, but apparently the legislature in the state of Maryland is terrible. Yeah, they’re terrible.

If you don’t know, some of the brilliant folks on the Maryland legislature think that a digital advertising tax is a good idea in the middle of a freaking pandemic in which small business are barely hanging on. Somebody had the bright idea that companies like Google and Facebook that sell digital advertising should pay a tax to the state of Maryland up to 10% based on the volume of digital ads that they sell in the state of Maryland.

Using round numbers, if Facebook sells $100 million in Facebook ads to Maryland businesses, the state of Maryland wants Facebook to pay them $10 million in a tax. Indulge me, if you would. Who do you think is actually going to be paying that tax? Do you think it’s Facebook, or do you think it’s the small businesses that purchase ads from Facebook whose costs are going to go up? Who do you think?

As a merchant services provider, we are a trickle-down business. We work a lot with home improvement contractors, home services companies, and a lot of our clients – a lot of them – use Google ads and Facebook as their primary lead generation tools.

In the middle of the pandemic, not only getting used to the restrictions that the politicians are putting on them but the fact that so many Americans are hurting and out of work, if you’re a home improvement contractor, your cost per lead is going through the roof, as it is, simply because your ad has to be shown to more people just to find somebody who is interested in a position to be able to purchase that service from you.

On top of that, the bright folks in the Maryland legislature think that taxing Google and taxing Facebook is a good idea. Yeah. This is what happens when people who have never run anything or owned a business try and control the economy and people who actually produce. It’s terrible. It’s idiotic. Governor Hogan has already vetoed it, and they’re scraping together the votes to override his veto because they’re terrible.

Please do us a favor. Call your elected officials. Tell them that this is asinine and that they’re going to be voted out in the upcoming election because I can’t even for the life of me understand why anybody with two brain cells to rub together thinks that this is a good idea right now. But, you know, crazier things have happened.

With that, we’re signing out. I got nothing else.

The post STOP THE MARYLAND DIGITAL AD TAX! appeared first on Magothy Payments.

When a consumer purchases something from a business, they expect the item to be shipped and delivered in a timely fashion. Unfortunately, the USPS has had problems losing packages and not updating the tracking information, which in turn causes the consumer to think that the business ripped them off and took their money without ever sending their items.

This is a widespread, common problem. If you’re a consumer, please be patient. This isn’t the fault of the business, and issuing a chargeback with your bank is hurting that small business for something that’s not their fault. If you’re making a purchase online and you have the option to select the shipping provider, we advise you to use one other than the USPS. Yes, USPS is [usually] a lot cheaper. But as the old saying goes, you get what you pay for.

BEGIN TRANSCRIPT: 

Ladies and gentlemen, boys and girls, it’s your boy, Jaron Rice, founder and CEO of Magothy Payments,  Maryland’s highest-rated merchant services provider.

I want to take a moment and talk to you about the USPS, the United States Postal Service. I have no idea what is going on over at USPS, but it is causing a problem for a lot of businesses and a lot of merchants, especially eCommerce merchants who ship goods to their clients.

I know we personally have a number of clients right now who are dealing with chargebacks from their customers because the USPS wet the bed on doing what they’re supposed to do, which is delivering packages. This is not a direct insult to USPS employees who are doing their job. If you are a good worker and you are doing your job, I am not talking about you, so please don’t take offense to this. But the organization as a whole has a history of incompetence.

When a merchant ships an item and gets a tracking number and it goes off and USPS does what they do and that tracking number doesn’t update for weeks or months, then that customer who is expecting those goods, turns around and issues a chargeback on the merchant as if the business didn’t do their part when in actuality it is the post office who sucks. This is happening a quite a bit.

The advice that I have is if you are consumer, please, please, please be patient with these businesses. It is not the business’ fault. I understand that you purchased something. You’re expecting it. It’s not their fault, OK? Issuing a chargeback only hurts the business.

If you are a business, we can help you with the chargeback portion. Our clients, we offer chargeback assistance at no additional cost. Just an update to our existing clients in how we do our order of operations for chargebacks, we’ve recently updated it so that we, Magothy Payments, are notified via email the moment a chargeback comes across so that we can begin that process for our clients.

It’s very, very difficult right now for eCommerce merchants, and a lot of them, a lot of our clients are dropping USPS as a service provider because they’re not doing their jobs properly. When an eCommerce merchant has multiple providers, as a consumer you go the website and it says, “FedEx is this much. UPS is this much. USPS is this much.” USPS is usually the cheapest option, and so people by default are like, “This one is cheaper. I’m going to choose this one.” A lot of times in life you get what you pay for, and it’s causing problems.

Again, we want you to be aware of an issue that is happening quite a bit. If you’re having an experience like that right now either as a business or a consumer, tell us about it down here in the comments. Leave us a note, and I hope this information was helpful. I hope you understand why things are happening the way that they are.

If you have any questions, you can always reach out to us. So if you enjoy the content, please consider subscribing and liking and sharing this video. Hope you’re having a great day. Take care.

The post The USPS Is Causing Chargebacks! appeared first on Magothy Payments.

BEGIN TRANSCRIPT:

Ladies and gentlemen, boys and girls, it’s your boy, Jaron Rice, founder and CEO of Magothy Payments.

If you are a business owner, I have a question for you. Are you shopping locally for your credit card processing services?

The reason I ask this is because going through COVID and all of the challenges that the small business community has, I’ve seen an amazing local rallying cry here in Maryland, specifically in Anne Arundel County, regarding the importance of shopping local. It’s one of those things where it’s really important for the small business community to stick together. I’ve seen a lot of local retailers who sell goods and things like that, and they’re like, “Don’t use Amazon. Buy locally. Shop locally.”

You ask them, “OK. I know you want us to shop locally. Who do you use for your payment processing?”

“Well, I use Square.”

Really? Because Square is to payment processing what Amazon is to local small businesses. There’s some good. There’s some bad, but ultimately, you’re sending those dollars somewhere else. You’re not keeping them in the community. Obviously as a merchant services provider here in Maryland, that sounds self-serving. It is to a degree, but the entire concept of shopping locally is self-serving for the business owner. You want people in your community to spend dollars at your business that is in that community.

When it comes to the payment processing side of things, a lot of small business owners don’t take the time to actually consider that there are local merchant services providers who have owners and employees who live in that community, who work in that community, who go to church in that community, who play recreational sports in that community. Wouldn’t you want to support those businesses?

Now obviously the quality of the product and service is paramount. Nobody is suggesting that you go with a crap company because they’re local as opposed to doing business with a better company who is far away. But all things being equal, wouldn’t you rather support the businesses in your local community? And so, that’s one of the things that I suggest.

If you’re in the Maryland area it doesn’t have to be Magothy Payments. But if you’re a member of a local chamber of commerce, I would highly suggest you get your chamber directory and see if there are reputable merchant services providers in your community who you can give your business to because, again, as a small business owner, you want people to shop locally and support your business. It’s fair to have the expectation that that kind of shop local mentality will be reciprocated in all areas of your business.

Just giving you something to think about. Once again, if you have any other questions you can certainly reach out to us at magothy.biz or calling 855-MAGOTHY. That’s 855-624-6849, and I will catch you guys in the next one.

The post Are You Shopping Locally For Your Payment Processing? appeared first on Magothy Payments.

BEGIN TRANSCRIPT:

Ladies and gentlemen, boys and girls, it’s your boy, Jaron Rice, founder and CEO of Magothy Payments, Maryland’s highest-rated merchant services provider, back for another episode of whatever this is. I haven’t quite figured it out yet. But I’ve got a lot of good information that you, the people, the small business community, need to know and need to understand.

Today I want to talk to you about Maryland’s House Bill 777, which is now signed into law, and what it does to protect you, the small business owner, from the predators in our industry, whether it’s the banks or the merchant services provider.

When I got into this industry a little over six years ago, I noticed a huge, huge problem. I would meet with a business owner who wanted to switch their payment processing over to us. We were saving them a couple hundred dollars a month. Then when they went to go cancel the service with their previous provider, their previous provider attempted to levy fines upwards of thousands of dollars for switching their services.

What happens here is oftentimes a merchant services provider or a bank on their agreement for merchant services on the signature page, there’s a line that says, “By signing this document, you are agreeing to our terms and services, which can be located here.” And on the piece of paper, there is a written-out URL that has a link to an often 75 to 100-page document which is their terms and services. Buried in the middle of that huge document in 6-point font, there is a clause that says, “This agreement is good for three years. If you cancel before three years, we will charge a cancellation fee of $499 and liquidated damages penalties of $100, $200, $300 a month for all the remaining months left on the agreement.” In essence, the merchant services provider is saying, “By you taking your business elsewhere, you are causing us financial harm, and so we are going to bill you for our lost profit.” Of course, they’re causing you financial harm because you suck. If you didn’t suck, they wouldn’t leave.

But that’s a huge problem that we were dealing with. Merchants were getting stuck in these agreements, and the merchant services providers would give them literally a 30-day window where they were allowed to cancel that agreement, or it would automatically renew.

I am a mission driven type of person. It’s in my nature. I cannot see a wrong being done and just be quiet and be silent about it. Providentially, I ran into a gentleman who was a referral. He owned a cigar shop. I was telling him stories of things that I had seen in the industry about big banks and merchant services providers ripping off small businesses. We were trading horror stories and things he had seen, and I jokingly said to him, “I wish I could make that illegal” or “I wish I could write a law to make that illegal,” or something to that effect. He looked at me and said, “Did I mention to you that I’m a state delegate?” And I said, “No, you did not. But that would be useful.” He is delegate Seth Howard here in Anne Arundel County, and he invited me down to Annapolis. I met with his legislative team. We hammered out a bill, and it took us three years, three legislative sessions, to get this bill passed.

Basically what it does is if you are a small business in Maryland, you have fewer than 50 employees and you are processing less that $2 million in credit card volume a year, this is designed to protect you. The majority of our clients are those small businesses. What it does is it caps all of the fees, fines, penalties, liquidated damages that a company can charge you at $500. It levels the playing field and makes it more competitive in our industry so that if you are a small business owner and you’re not happy with the service that your merchant services provider is providing, you can then shop elsewhere without fear of a huge financial retribution being levied on you for taking your business somewhere else. it also makes it so that if your agreements automatically renew, once it automatically renews, there can be no fees, fines or penalties levied once you’re in the renewal period. The information about your cancellation fees, it has to be in 12-point, bold font on the actual agreement that you sign. The renewal date, the penalty for cancellation, the contact information of the merchant services provider, all of those have to be on the actual agreement that you sign in 12-point, bold font. Each individual clause has to be initialed by the merchant. This was huge in bringing transparency to our industry, which is obviously not known for being transparent.

In the first couple of years, we had a lot of opposition. First Data and the Maryland Banker’s Association and all of these big, huge corporations who didn’t want us to go forward with this legislation, even though I work in the industry, my industry hates me because this legislation in Maryland affects how merchant services providers can compensate their sales agents because they know that they can no longer slam a merchant for thousands of dollars. They can’t afford to pay this merchant sales rep several hundred dollars, a thousand dollars in up front bonuses knowing that they can recoup the money if the business takes their business elsewhere.

It really ruffled some feathers and pissed off a lot of people, but, frankly, I don’t care. I believe that this is the right thing to do. I am a free market capitalist. I believe in the less government the better, but the payments processing industry is like the wild west. And these merchant services providers and big banks were running rough shod all over the small business community. I think that merchant services providers, banks, and their clients, the actual small businesses, that we should be on the same side of the table. We have a vested interest in the long-term growth and success of their business. Why are you trying to violate the people who are your customers? I don’t get that. I don’t understand that, so we took steps to change that.

If you are a business owner in Maryland, again, you have fewer than 50 employees and you’re processing less than $2 million a year, this applies to you. This was signed in April of 2019. It went into effect in October of 2019. As of this recording, this is the last day of November 2020, it is in effect, and it is protecting you right now. If you have any other questions about that legislation, you can visit www.mdhb777.com and there’s more information about that and how you can file a claim if you have a merchant services provider who is violating that regulation.

So I hope that information was helpful, and we’re continuing to commit to bringing you some useful content. I hope you guys are having a great day.

The post What Every MARYLAND Business Owner Needs To Know About Their Credit Card Processing. appeared first on Magothy Payments.

BEGIN TRANSCRIPT:

Ladies and gentlemen, boys and girls, it’s your boy, Jaron Rice, founder and CEO of Magothy Payments. I came back to do a part two for the merchant services account structure video that we just posted to offer a little bit more clarification.

There was something that I said in regard to your account structure. If you have a MOTO account (mail order telephone order) and you punch in the address for the AVS system (address verification system), and that information is wrong, you are not penalized by the card brands with a downgraded interchange cost. That is true.

However, if it’s an eCommerce transaction, whether you’re structured for MOTO or eCommerce and the person puts in their information and it happens to be wrong, it fails the address verification service, and you still ship those goods, there’s a possibility that you’re going to be liable for a charge right down the road if that turns out to be a fraudulent transaction.

When it comes to eCommerce and selling of goods, if someone comes to your website and puts in payment information, you should have a setting to protect you in the event that the address verification fails.

I mentioned before that gateway settings allow you to tinker them so that if you’re keying it in yourself and you got their information over the phone and the AVS fails, that the transaction goes through. But if it’s passively set up on your end so that they’re the ones doing the work and punching in the information, you may want to have it set in a way that it’ll decline if the AVS fails so that you’re not liable for a chargeback because the burden of proof is on you. If have it set up and it’s a fraudulent transaction and they don’t know the person’s correct billing address, you need to have something in place to stop that transaction from going through.

The same is true if they know the billing address. They put the billing address in and the billing address passes the AVS system, meaning it’s accurate, but they have a different shipping address. So that get’s a little wonky because we’ve had clients that have had that happen to them where someone will put in the billing address, which is correct to the cardholder. They’ll put in the shipping address which is different. The shipping address is either a fraudulent address or a freight-forwarding service where the transaction goes through, the goods are shipped to that address, it gets to a freight-forwarding service, and then it’s forwarded somewhere else where they have no record of it. And the only way you can figure out where a freight-forwarding is going is with a court order. When it turns out that was a fraudulent transaction, the merchant is liable to pay back the actual cardholder, and they’ve lost those goods that they shipped.

To again clarify on that, if the AVS information is wrong, you’re not going to get hit with additional interchange downgrades if your account is set up properly, but it will leave you open for a chargeback down the road if it turns out to be a fraudulent transaction. So depending on how you’re set up, you definitely want to consider that.

I hope that information was helpful. If you’d like some more information or want to reach out to us, you can always give us a call at 855-MAGOTHY. That’s 855-624-6849 or visit us at magothy.biz. I hope you enjoyed the information. Catch you guys in the next one.

The post Merchant Services Account Structure Part 2 appeared first on Magothy Payments.

BEGIN TRANSCRIPT:

Ladies and gentlemen, boys and girls, welcome back. It’s your boy, Jaron Rice, founder and CEO of Magothy Payments, Maryland’s highest-rated merchant services provider. I just came back to drop another tip for you.

This is specifically for card-not-present businesses. If you’re typically running a transaction when your customer is not standing there in front of you with a credit card, this is for you.

A lot of people don’t understand that if you’re primarily doing card-not-present transactions, there’s no need for you to have physical hardware. If you are a home improvement contractor, if you’re a home services company, if you’re in B2B or you’re doing eCommerce or things like that, and you’re taking payments over the phone, through a website-hosted payment page or a secure shopping cart or something like that, there’s no need for you to have a physical terminal.

One of the things I’ve learned in my experience is that, unfortunately, people in the merchant services industry, companies in the industry will do whatever they can to make an extra buck. And so, a lot of times your accounts are set up in a way so that they can maximize their profits while you’re paying more and being inefficient.

Here’s an example: we have a client that we met that’s up in Hartford County, and they were working with Bank of America. They had a Clover Mini point of sales system in the office. When I was reviewing the statements, I saw that there was a fee called a POS misuse fee. So they were on tiered pricing. The bank had sold them on the qualified rate at 1.79% or whatever it was without really telling them that this is basically for qualified transactions which are in-person card-swipe debit cards, which they almost never have. And then they had a mid-qualified rate that was 2.9% and a nonqualified rate, which are keyed-in transactions, which was 3.79%. And so, their account was structured as a card-present retail account when it should’ve been structured as a MOTO account (mail order telephone order).

The reason that’s important is they were being charged – they were being downgraded – whenever they were keying in transactions into that Clover Mini POS. They didn’t have interchange plus pricing where the true cost from the card brand is passed through where there’s a fixed markup for the merchant services provider, which is the most transparent way to price. They were on tiered pricing, and Bank of America was qualifying or not qualifying the transactions that they had.

Every time they would key in a transaction, which is how they would normally take the transaction, they were being downgraded to a nonqualified transaction, and they were being charged a POS misuse fee, right? And so, one of the months that I was looking at it, the POS misuse fee was over $500 in downgrades because they were keying in transactions into the Clover point of sale that the bank sold to them.

Their account was not structured properly. It should’ve been set up as a MOTO account. They should’ve had a virtual terminal or a gateway solution where they can key the transactions directly into a secure web portal after they take the information over the phone or something like that. And so how the account is set up is very, very important and will ultimately, that in conjunction with the pricing structure that the merchant services provider offers, is going to determine ultimately how much the business spends on their payment processing.

Another point when they’re set up that way is that oftentimes it’s not set up to go through the AVS (address verification system) that most of the card brands use, specifically VISA. So when you’re keying in a transaction, inherently there’s more risk of it being fraudulent because it’s a card-not-present transaction. You’re running the card information. You’re not actually running the card. And so, when you are keying in the information, the program that you’re using, whether it’s a physical terminal or whether it’s a virtual terminal, should require or prompt you to put in address information. And that is to verify that you know who this person is, you know where they live, the billing address, that sort of thing, and when that information is not provided, the card brands will downgrade you.

And so, the importance in how the account is structured affects the AVS. Because if your account is set up as a retail account and you key in a transaction, and it prompts you for the address verification information, and you punch it in, and that address information that you punch in is wrong, you are going to be downgraded because it’s structured as a retail account.

The card brands for retail accounts have a reasonable expectation for you to look at that person’s license, right? So if you are set up as a retail account and you have a physical point of sale, and for whatever reason you need to key in the transaction, meaning your chip reader is not working or something like that, they expect you to look at their driver’s license and punch in the information off of that driver’s license. They will penalize you if the information that you punch in is wrong.

If your account is structured as a MOTO account (mail order telephone order account), while they require you to put information in, you will not be penalized for it being wrong. There’s no reasonable expectation for you to know definitively whether that information is correct, so you’re not penalized if it’s wrong. And so again that goes back to, is your account structured properly?

Now if you’re using a gateway, you can put in a security protocol where if it runs the AVS and the address information is incorrect with what the bank has on file that it rejects a transaction, you can certainly do that. But ultimately if the account is not structured, it’s going to cost you more money.

These are the types of things that you need to ask when you are searching for a merchant services provider, and you need to review your statements because you may be being charged extra and not even realize it.

I hope this tip was helpful. Again, Jaron Rice with Magothy Payments. If you’re interested in working with us or getting some more information from us, phone number is 855-MAGOTHY. That’s 855-624-6849. Or you can reach us at magothy.biz. I hope this was helpful. Have a great day.

The post Merchant Services Account Structure appeared first on Magothy Payments.

BEGIN TRANSCRIPT:

Ladies and gentlemen, boys and girls, it’s your boy, Jaron Rice, founder and CEO of Magothy Payments, Maryland’s highest-rated merchant services provider. We help business become more profitable by lowering their costs of credit card acceptance and decreasing their time spent on payment reconciliation. Today, I want to give you three tips to help ensure that you don’t get ravaged by a chargeback.

Tip #1: Document everything. When I say everything, I mean everything.

Now, a lot of home improvement companies are really good about documenting on the actual contract. Home services companies, you guys need a little bit of help. Often times a plumber, electrician, HVAC contractor, they’ll do pretty good with the actual proposal. But I’ve seen from our clients and other prospective clients that a lot of times the actual agreed upon scope of work is not actually documented in the form of a signed contract. That is problematic because you can have someone who understands how chargebacks work as a customer and intentionally give you the runaround because things are not documented properly, so keep good records.

Make sure that everything is documented, and even document the exclusions. If you are a roofing company and you suggest replacing skylights because they’re old and the flashing is damaged and there’s a potential for leaks and the customer declines because of the cost, put that on the agreement that we have recommended replacing the skylights because they’re old and the flashing has gone bad, and they’re probably going to leak and we’re not responsible. Put that on the agreement and have them sign it so that eight months down the road when it does leak like you said it would, they have no ground to stand on for a chargeback. Because if you don’t, you’re automatically going to look suspect if you just replace a roof and now it’s leaking. So keep that in mind.

Tip #2: Keep good records of everything that you document and have it readily available.

There are some companies like our company. We assist our clients with the chargeback process, so myself and my team, we will craft the dispute letters on your behalf after we get your side of the story. But we need the signed agreement. We need any change addendums. We need the exclusions and things like that to be able to submit to their issuing bank, to the processor, to the card brand so that they can get an overview of what’s actually happening. The quicker you get this process done, the better it’s going to be. Typically you have 30 days to respond, but, if you spend 15 days trying to get your records together, then that gives you very little wiggle room to get follow-up documentation if they need it. So keep good records and have those documents readily available.

Tip #3: If after the client has issued a chargeback you decide that you are going to issue a refund or a partial refund so that the chargeback just goes away and you really don’t want to deal with this customer, please, please, please, please, please make sure that you’re issuing a refund the same way that you collected the payment.

If you took a credit card, then you need to issue a refund back to that credit card. Do not give them a check because through the process of the chargeback, if you issue a refund, you then have a digital documentation of that transaction in the processor system that they can see and verify. If you give them a check outside of that transaction, the chargeback doesn’t automatically go away because then they have to take the time to actually verify that you did issue them a refund through another means. And if you have a sheisty client that is trying to get over, they can say, “I never got a check.” So then you’re starting over.

The downside to this is you’re going to have to float that money twice. So let’s just say it’s a $1,000 transaction. They’ve issued a chargeback. The bank has pulled the $1,000 from you and is holding it in escrow while the investigation is going on. If you issue a refund to get that chargeback to go away, that’s another $1,000. But it’s going back to the customer and then you have documentation that the issue has been resolved so that your original $1,000 gets returned. Now if you do this properly, it shouldn’t be a long, drawn-out process, typically two or three business days, but it could take a couple of weeks depending on the processor that you’re working with.

So those are three tips to hopefully help you avoid the pain of losing money on a chargeback. Because we work primarily with home improvement companies, home services companies, B2B and large ticket merchants, we assist our clients with chargebacks quite frequently. It’s not necessarily because our clients are doing anything wrong. Sometimes consumers are not great, and they issue chargebacks on silly stuff.

If you found this information beneficial, please consider subscribing for more content. If you need to reach us, again, I’m Jaron Rice with Magothy Payments 855-MAGOTHY, 855-624-6849 or magothy.biz. Catch you guys in the next one.

The post Don’t Lose Money Because of Chargebacks. appeared first on Magothy Payments.

BEGIN TRANSCRIPT:

Amber: In Maryland, people of color own more businesses than almost any other state in the country, and BBB connects consumers with businesses they can trust. To support our community of Black business owners and consumers, we’re spotlighting Black-owned, accredited businesses that promote trust and integrity. Today, I’m here with Jaron Rice, founder of Magothy Payments. Jaron, thank you for joining me today.

Jaron: Thanks for having me.

Amber: First of all, what inspired you to found your business?

Jaron: That’s a loaded question.

Amber: Yeah. I know.

Jaron: Honestly, I’ve been in professional sales my entire adult life. I’ve sold everything from, you know, I did five years as a mortgage banker originating loans. I sold home improvements for five years. I’ve sold pest control. I’ve sold cars. One of the things that really pushed me in the direction of starting my own business was I’ve always been a relational seller. I’m not high pressure. I’m informative and consultative. “Here’s what your problem is. Here’s what the solution is. Here’s how that works.”

I’ve always, always, always been more interested in the relationship after the sale than just getting the sale. One of the challenges that I had being in sales professionally is that oftentimes the organizations I was representing would drop the ball after the sale was executed during the installation or the implementation of whatever the product or service was. And that was very disheartening for me. That kind of pushed me in the direction of I want to start my own company where I can be more hands on in managing and maintaining the relationship after the initial sale. And that rabbit hole, I tumbled down into merchant services.

Amber: That’s awesome. Yeah, maintaining connections with your customers is really important.

Jaron: Absolutely.

Amber: What obstacles have you had to overcome while owning your business?

Jaron: There have been a lot.

Amber: I’m sure.

Jaron: The first one was when you are doing B2B sales and you don’t have a reputation, you have to rely a lot on cold calling. For me, one of the things when dealing with business owners, we live in Pasadena in Anne Arundel County, and cold calling businesses – and I don’t know. I want to preface this. I don’t know if this is my own head trash based on some experience I had before or if it was something that was valid. But when I was cold calling and walking into businesses, I felt that I needed go above and beyond to be exceptionally professional as a large, 6’1” Black man who is covered in tattoos. For me, even though I didn’t want to, I was in a suit and tie all the time. Regardless of the business, I would walk into a sweaty, stinky auto repair shop and I’ve got on a suit because I was concerned about the perception coming from corporate America. That was hard for a long time.

But then as the business continued to grow and our portfolio was growing and we started getting more and more referrals from our existing client base, when we had a reputation and I was seen in the area as the industry expert, then I was comfortable being myself.

If a business is calling me and they’re showing up at our office to work with us, I’m OK wearing a t-shirt and shorts on Friday. You know what I mean? Because this is my office, and you want my service. It’s a different dynamic when you are pursuing people for business versus when they’re coming to you.

We have grown our reputation to the point where people are now pursuing us to work with us, and I’m a lot more comfortable in that environment just being myself. I’ve worn flip flops into the office for three months now. I haven’t worn real shoes in the office in a while, and there’s no way that I would feel comfortable doing that back when we first started.

Amber: Yeah, you had to work really hard to gain that credibility, but now you’ve got it. That’s awesome.

Jaron: Absolutely.

Amber: So what have been your strategies for maintaining trust with your business throughout the coronavirus?

Jaron: I think just being present and being available. When it first happened, we did a couple of video series on YouTube outlining how the payment processing industry was changing because of COVID. When it first happened, we saw a monumental wave of fraudulent transactions and chargebacks. Some of it was on the business side where cash was tight and they were taking payments from cards that they had on file before the work was done, and then on the flipside we had consumers who were then having buyer’s remorse where they paid a home improvement contractor $10,000 for this project and then found out two weeks later that they were no longer employed and then called their bank to reverse the charge because they wanted that money back even though they had gotten the service.

The industry was experiencing a ridiculously high volume in chargebacks that they were working through. And because of that, they kind of circled the wagons and we saw a lot of funding delays and larger transactions being scrutinized more than they had in the past as everybody adjusted to that. And so, we just made sure that we were available.

We’re in financial services, so we were still considered essential. I was in the office every day, our staff was working remotely, being available to reply to emails and to answer phone calls. Because for a business owner, especially during the shelter in place, if you’re not essential and your business is shut down, that’s a very scary time.

We work with a lot of event planners and charter bus companies and limousine companies that COVID basically cleared every event that they had for a two to three-month period. A lot of times, these people have paid deposits six months, a year in advance. Now that business was dealing with a cashflow crunch because they’re having to refund deposits from a year ago whose funds they’ve already used to pay drivers and to maintain their equipment and things like that. And so being available for them to help navigate through that from a payment processing standpoint really helped to build trust for them.

Amber: Yeah, absolutely. Being able to respond to conflicts that your customers are having is incredibly important.

Jaron: Absolutely.

Amber: What are your goals moving forward?

Jaron: One of the things I love best about being a business owner is studying the market and figuring out the next big trend before it gets here. When most people think of merchant services providers, they think of payment processing at a restaurant or a retail location because that’s where consumers are spending their money. And while we do have clients who do that, that’s not a huge focal point of our business at all. They represent the minority. Our biggest segment of clients are home improvement contractors followed by home services companies, followed by B2B and then automotive repair.

A lot of our businesses are in card-not-present environments meaning they’re running transactions when someone is not physically there presenting a credit card to them. We have a gateway software solution that allows them to key in transactions. They can send payable invoices. We put hosted payment pages on their websites. They have mobile apps and things like that. And that pivot, moving in that direction consciously two to three years ago set us up so that we weren’t nearly as negatively impacted by COVID as we possibly could’ve been as some of our counterparts in merchant services have been.

If you focus heavily on restaurants and retail and those businesses are shut down, this is a trickle-down business. If you have a client who stops processing because they can’t open, you stop making money off of them. The pivot that we made years ago to go after the home improvement market segment turned out to be a wise move with what happened because they are still considered essential.

The goal is focusing on how is life going to be different after COVID? Let’s just say a year from now life is back to normal. There’s a vaccine. Everybody is happy. Business owners are always going to have to think about the next possible pandemic. Having a plan in place and working with market segments that are going to have the minimal impact as possible from something like that, we as a company need to start thinking about that now.

There are certain businesses we brought in through COVID. We brought on a client who is a disaster response company who provides PPE and COVID-19 masks and things like that. That’s what they did as a fulltime business for years and then COVID happened. They were doing two, three, four years’ worth of revenue in two or three months because it was an emergency, and everybody needed them. We brought on business like that through the process.

Our goal and our focus is to make sure that we’re paying attention to those opportunities to put ourselves in a position to be able to weather the next storm, whatever it is, because it’s eventually going to happen. We don’t want to be so heavily invested in one industry that something like an economic collapse in the housing market that would affect home improvement contractors affects us. We want to be as well-diversified as possible. That’s really the goal and focus going forward.

Amber: Yeah. Finding balance and being able to adapt is incredibly important.

Jaron: Absolutely.

Amber: Yeah. I think that’s a great moment to end on. Jaron, thank you so much for taking the time to talk to me today.

Jaron: Absolutely. Thanks for having me.

Amber: Of course. And to our viewers, thanks for watching. Watch out for our next video where we will highlight another Black-owned business advancing marketplace trust, and, of course, be sure to show your support for local Black-owned businesses.

The post BBB Black-Owned Business Spotlight appeared first on Magothy Payments.