How To Read A Credit Card Merchant Statement – 5 Ways To Categorize Fees

Reading your merchant statement and finding the rates and fees you’re being charged can be like playing “Where’s Waldo?”. One reason is because there are nearly as many different statement formats as there are merchant acquiring companies. Also, because of how competitive the industry has become, many monthly statements don’t completely disclose the rates being charged. And sometimes they are completely hidden.

I know of banks that don’t even send a statement out. If a merchant wants details of what they paid they have to logon to an online account to find it.

It’s War Out There!

One reason for this is the competitiveness. You have to remember that credit and debit cards make up part of a 2 trillion dollar industry. Money is like a magnet – it attracts Most merchants are being contacted continually by competing processors trying to get them to switch processors, by promising “lower rates”, etc.

So, to prevent a sales agent from another processing company from taking a merchant away – some processors make it as hard as possible for a competitor’s sales rep to walk in to a business, analyze a merchant statement, and do an ‘apples for apples’ comparison.

That being said, there are still some basic keys to look for when reading your statement. Here’s what I look for in analyzing a merchant statement, in order:

  • One: The pricing structure – how has the account been set up? Which pricing model does it employ? Is it using tiers (e.g. 3-tier; 4-tier, etc.) or – is it using “Interchange Plus”? (NOTE: most merchants are on a tier pricing model, which, in my opinion guarantees they’re being overcharged. Also, there are other pricing structures but tier pricing is by far the most common)
  • Two: The monthly fees (sometimes called “Other”) – next, I look to see what the monthly fees are. This can include: a statement fee; monthly service fee; account maintenance fee (normally, you’d only see one of these although I’ve seen two – or, you may see the equivalent fee but using a different term); PCI fee; batch fee; and gateway or access fees. Any miscellaneous, but not monthly fees can also show up here – e.g., an annual fee or semi-quarterly.
  • Three: Processing Fees – this is where the discount rates will be listed. If you are on tier pricing the best statements will print an itemized list showing the “qualified”, “mid-qualified”, and “non-qualified” (the 3 tiers) rate. If you are on Interchange Plus, you’ll see a list showing all the different cards you took, followed by the actual interchange rate for the card, the “dpi” (discount per item), plus the processors mark-up expressed as basis points and a transaction fee (or per item, depending on the term used to list it).
  • Four: Authorization Fees – here’s where you’ll find fees that go to VISA and MC. They’ll show up listed as access, authorization, and /or WATTS fees. You could also find here AVS fees (address verification); assessment fees; brand usage fee; risk fee; settlement fees, IAS fee (Issuer Access & Settlement).
  • Five: Third Party Fees – 3rd parties means networks other than VISA & MC that are included in your statement. This would include American Express, Discover, and the debit networks if you are using pin debit

Part of the problem in reading a merchant statement is different processors use different category names and different terms to identify charges. That’s why I began by saying it can be like playing “Where’s Waldo?” While there are common terms used for certain fees there is also a wide variation used, depending on the acquirer (the company you signed a merchant agreement with).

Again, part of this is due to an attempt to hide what’s being charged and make it difficult for a competitor to analyze a statement. While that’s ‘somewhat’ understandable – in my opinion it’s a disservice to the merchant. Integrity demands transparency. Maybe if processors were more merchant oriented they’d have a lower turnover and would not have to worry about competition so much. At least that’s my opinion.

Differences Between Products And Services

What are some of the main differences between products and services? And when are these relevant?

Tangibility versus Intangibility

Products are tangible. You can buy pork as a tangible product. You buy it, you ship it and sell it. In the same way as you buy stamps, cigarettes and cars.

Financial service companies however, make it possible to exchange pork bellies Futures, on the Chicago Mercantile Exchange (CME). A future is (not the most simple example of) a service with which you can hedge your risk. In this last case, most of the people trading on the CME will never see or smell the pork bellies.

The ownership between products and services is different. A stock could be called a financial product that you own. You can place a stock order which might result in a transaction later on. Your bank services a depot fee for saving you a lot of work. You cannot own a service.

Where the product is much more standardized, the service is tailor-made. Companies differentiate in offering products and services, but the variations between similar products of different producers are less prominent than the variations between services.

You can count products in the same way as you can count your money (or have your bank service you this information). A service is not countable, but is “leveled;” better than the best service is not possible. There is a limit in what a service can offer.

A product is produced by a manufacturing process. A service is offered by the utility element of companies; you subscribe to a service in the same way as you subscribe to your gas and electricity supplier.

And this brings us to the essential of these differences; changing from one (product approach) to the other (service offering) is very complex, because of the last mentioned differences. Not only the process is different but the style change you need to support this change… Good Luck.

© 2006 Hans Bool

A Craft Industry Analysis

The Craft and Hobby Association in 2011, released results of research into the U.S. Craft and Hobby Industry. You may be surprised to learn that the craft and hobbyist’s contribution towards this industries net worth is approximately $29 billion, double the $14 billion first reported by Craft Organization Directors Association (CODA) in 2001. A surprising figure to emerge from this research (even to us avid craft enthusiasts) is that over half of U.S. households acknowledged engaging in a craft activity at least once per year.

When we unpack that $29 billion net worth figure we get a clearer picture of who it is that loves their hobby. Woodworking was the front runners in the top 10 craft sectors by spend, coming in at $3.32 billion with 16.8 million individuals engaging in this activity. I myself have some lovely bookends purchased at a local Sunday market that have clearly been lovingly produced by one such woodworker.

Since the internet revolution every industry engages in analytics and who wouldn’t want to have a picture of their client base so savvy marketing campaigns can bring a little more of that dollar value into the business. And what an impressive dollar value it is. The artists among us, thought to be 21.1 million households, spent $2.6 billion on our passion. The jewelry making and beading craft accounted for $2.3 billion with 14.7 million people crafting earrings, necklaces, bracelets and broaches etc. Over 18 million households engaged in Scrapbooking and other paper crafts spending $3.3 billion preserving family memories and turning photos into family heirlooms. The crocheting hobby injected $1.062 billion into the industry via 17.4 million strong crochet fans. That’s a lot of towels getting topped.

Crafting wreaths, historically a symbol of strength, and in Christianity a celebration of the festive season, made it into one of the top 10 favorite craft activities with 11.6 million engaging in this activity. This is not a once a year only at Christmas craft as wreaths are also used as wedding headdress in many different cultures. Incidentally, wedding crafts injected $803 million into the U.S. craft economy.

With speculation that the global financial crisis is responsible for providing this boost for the craft industry Hobby Lobby’s Eileen Liffick attributed an increase of people attending craft shops or online craft sites looking for ways to create craft for their families without spending a lot of money due to the current economic conditions. Ms Liffick says that “not only are people saving money, they’re making it. We have many people selling these items making extra money”.

What was previously a much loved hobby is now a means of saving the family money. “People are looking to create something special, something homemade. They want to help others save money, while making a little extra for themself”. The fabric department’s business has at least doubled in the last three years because of the economy with people trending back to earlier times, making homemade items for themselves, as a gift, or for a fun family activity. Industry concentration has increased over the five years to 2011, as large national retailers take market share from small independent operators.

Despite the impact of large scale business successful craft businesses are popping up everywhere seeking to share in the crafting industries net worth of $29 million. Crafting is a convenient work from home business and respected cottage industry. Approximately 81.2% of total craft industry operators in Canada are estimated to be businesses without paid-employees (non-employers) in 2011.

It’s now easier than ever to publicize your business and get recognition without spending a fortune doing so using a variety of free and low cost tools and resources from marketing on the internet to craft shows and everything in between.

Craft shows bring resources and new techniques to the end user providing an unequalled opportunity to present craft and hobby ideas and products and services to this cashed up audience. The hobby and craft association reported attendee registration at one particular craft show up 40%. In the “buyer” category alone registration was up 48% for this same show planned for 2012 in Anaheim.

Craft Pavilions showcase what’s new in crafts reaching craft and hobby enthusiasts far and wide. Stall holders sell products in a popular, vibrant market place that attracts tens of thousands over the course of the event. The bonus to the community is far reaching as these tens of thousands of attendees require accommodation and spend money on food and drinks in the vicinity of the event.

Peartree Solutions produced a report on the profile of the Canadian craft industry (2003) highlighting that Canadian craft, recognized internationally for its quality and distinctive character, was at the time considered to be a growing and vibrant collection of individual craft persons, studios, enterprises, media guilds, public and private galleries, retail and wholesale shows, and organizations. The industry in 2001 had generated $727 million in economic activity which including over $100 million in exports.

At the time of this research there were approximately 14,048 craft studios operating in Canada, where 22,597 people were employed. Ten per cent of those surveyed had craft revenues in excess of $120,000. The net craft income (or earnings) of full time craft professionals averaged $17,300 in 2001, while the top ten per cent earned net income of $49,000 or more.

Southern hemisphere crafters are every bit as enthusiastic about their hobby. Australia has less than one fifth of the population of U.S. however managed to spend an estimated $250 million on art and craft materials in 2009-2010. These figures are not a true representation of the Australian craft industry however as the Australian Bureau of Statistics (ABS) define a hobby as an activity that was undertaken only for oneself or for family or friends, that is, the output was not for general consumption. If the item produced was to sell, then this would be considered a work involvement and not measured in the hobby category. The ABS survey showed that in 2007 there were 2.1 million people aged 15 years and over in Australia who were involved in Art and craft as a hobby activity.

Craft exhibitions, craft festivals, craft shows are an unequalled opportunity for crafters and retailers alike to show case their wares. “Handarbeit & Hobby” Exhibition (Cologne, Germany) was held in 2009. Thought to be the largest European exhibition of manufacturers of the goods for needlework and creativity, the exhibition attracted more than 200 craft product companies. Many companies from Mexico, Japan, Australia, the USA and other countries saw the financial benefits of crossing the globe to present their products and shore up a slice of the lucrative European craft market.

Prize money from craft competitions can be quite lucrative for the hobbyist. A winner of an award for embroidery in 2009 beat the pool of 24 finalists from 24 countries selected from 330 applicants to take home $10 000. Craft enthusiasts can compete with the best by entering craft competitions. A European quilting championship has been held annually, since competition commenced in 2002. Masters and designers of ceramics and porcelain from Canada, Russia, Spain and other countries were among the last biennale visitors to the British Ceramic biennale festival in 2009. A mosaic technique summit was organized by the Society of the American Mosaic Artists and coincided with 10th anniversary of this Society.

In a news release issued on April 14 2011, CHA Member Northridge Publishing (PROVO, Utah) announced the launch of a new craft industry trade publication “Creative Retailer,” The publication aims to provide retailers the very best in industry information and product awareness and canvas a wide variety of topics, provide project ideas and discuss solutions for common retail problems for craft retailers. The craft industry hopes that the introduction of a new trade publication is a signal that the industry has a positive future for retailers and craft enthusiast alike.

As former partners of Scrapbook Premier, Inc. and Scrapbook Business Magazine, Torrie and Kevin of Northridge Publishing will provide leading-edge programs and media support that will strengthen business practices for both vendor, manufacturers and retailers. Brian Kunz, founder and president of Northridge Publishing stated ‘”they are striving to expand the industry by building greater awareness to their many subscribers” (hundreds of new readers every month).

Craft industry statistics clearly show that with over half of U.S. households engaging in a craft activity, many, many people experience that unequaled feeling of satisfaction that comes from creating something beautiful. Nothing is as self-soothing as those stolen hours immersed in the craft you adore.

Top 5 Types of Entertainment for Parties

When choosing the most memorable entertainment for parties, first take a look at what kind of party or event it is. Depending on the event, such as weddings, there are wedding entertainment ideas and for corporate events, there are corporate event ideas.

To make it simpler, you can divide the types of entertainment into a group. Remember, entertainment for parties and events can be considered an amusing type of activity from very passive to very interactive. For instance, group classifications are: children, group, public, private or corporate. You want to find the right entertainment for the specific group you would like to entertain for the event.

Here are some examples:

Public Entertainment

When you walk through the park or subway station in any big city, you can probably see a large range of public entertainers amusing the city’s bystanders and passers-by for any amount of money. There are all sorts of public entertainers from Jazz musicians, a violin soloist to mimes. Public entertainers flock to bigger cities because there are a large number of concentrated people in an area to hopefully make some kind of wage. On the other hand, once you make your nominal donation, you can enjoy the gifts these talented public entertainers have to offer.

Corporate Entertainment

Corporate entertainment is aimed specifically at corporate events, award ceremonies and product launches, and is usually private and by invite only. Corporate events can run the gambit scale-wise, from very intimate to thousands of people. Forcorporate event ideas, think about including live speakers or even consider booking live music for corporate picnics and charity functions.

Adult Entertainment

Adult Entertainment is not only referring to the sex industry but can involve entertainment that adults might enjoy, like live concerts, sports, theater and even other activities that might be also appealing and appropriate for kids such aswedding entertainment ideas.

Live Entertainment

Live entertainment can be broad-including all ages and encompassing many varieties of entertainment. For example, music concerts, arena sports, musical theater, plays, live talk shows and seminars-practically any other activity that are aimed to bring large groups of people together and be amused. They can be for wedding entertainment ideas to corporate event ideas.

Child Entertainment

Entertaining kids is a fine balance between mental stimulation and physical activities. That’s why clowns, magicians and puppets are usually the most popular, coupled with games and races. They can be quite enjoyable for adults as well. Live music is also a hit at children’s parties for both young and old alike.

So when considering what kind of entertainment for parties or events, it is simply a matter of matching up the type of entertainment, with the type of audience or group to suit their tastes! Drawing people together with live music is almost always a sure hit! Book your live music today. Call an entertainment professional to help you choose what type of band or DJ you’d like to feature at your party or event!