Jim Fitzpatrick: 0:03

This is Driving Solutions exclusively on cbtnewscom. Hey everyone, jim Fitzpatrick, thanks so much for joining me on another edition of Driving Solutions right here at cbtnewscom. We are so happy to have with us once again Amberlee Allen, who's the founder and managing partner of Dealer Merchant Services. She's here to talk all about credit card merchant services, how you can make some money and the ways to do this right. And so, amberlee, thank you so much for joining us once again in the studio. Our viewers always get a lot out of whenever you're here. I know because they send me emails and say you got to have her back again. So for maybe the few dealers that are out there that might not be as familiar with dealer merchant services as we are here, tell us about your company. Tell our dealers and our viewing audience about your company and what solutions you provide.

Amberly Allen: 0:52

So we work with 1,000 dealers right now across the country in 45 states. We're endorsed by 14 state associations and we help dealers pass along their credit card fees to their customers, but we want to make sure they're doing that within compliance and within state and federal regulations.

Jim Fitzpatrick: 1:08

Okay, and how long have you been around?

Amberly Allen: 1:09

So we started right before COVID in 2020. And although that seems young, bottom line is the laws have just recently changed and so we want to make sure that they're handling it. So different states have turned since we've been in business and so we're very up to speed with all of the regulations.

Jim Fitzpatrick: 1:24

New.

Amberly Allen: 1:24

York for example, just made some updates to their laws. So it's constantly evolving and so we're young. But mighty.

Jim Fitzpatrick: 1:33

I was going to say you're young, but you have over a thousand dealerships. That's incredible and if my research is correct here and I think that it is, we've talked about it before you're like five, six hundred more stores than your closest competitor in this space.

Amberly Allen: 1:46

talk to us about that yes, so we've launched more dealerships on a compliance surcharge program than any other company in the country by a long shot, again by four, five, six hundred rooftops. So we know it better than anybody. Yeah, and we also work with trucking companies as well, heavy trucking companies. We've got some RV, motorsports, all of those.

Jim Fitzpatrick: 2:02

So we have dealers that have those offshoots from their own groups and we can certainly help them with those as well, and then in that lineup of clients that you've got, you work with many of the 150 top dealer groups in the country, right, yes, we're very proud of that.

Amberly Allen: 2:16

We've got lots of people on that list.

Jim Fitzpatrick: 2:17

I wish I could name them, but I can't right.

Amberly Allen: 2:20

Neither can I.

Jim Fitzpatrick: 2:21

Neither can I, that's right. So this is obviously a very hot topic and I've said before on air that is that for dealers that are out there that want to learn more about this particular topic because it's not going away and you can make some money from it you can give Amberly a call to just say, hey, come on in and do an assessment, that's right. Talk to us about that, because without any obligation, right, that's right.

Amberly Allen: 2:46

So we need three months worth of credit card processing statements, including American Express, if it's separate Some of these bigger stores, american Express is separate and we just need two days to go through the numbers 999 times out of a thousand we find hidden fees. So our proprietary software will find any interchange padding, any hidden fees, things like that. Typically their statements are 26 pages long and confusing by design.

Jim Fitzpatrick: 3:11

But not for you, not for me. You know exactly what to look for, that's right.

Amberly Allen: 3:14

That's right. We'll be able to isolate what percentage of their customers are already using a debit card. That data point's really significant because when a dealer is going to a surcharge program, typically 30% to 40% of their customers don't have any pricing change. Okay, and so that's an important piece that we can tell them. We can tell them if they've gotten rate increases. Okay, that typically happens in April and October. So most of our stores we're looking at now they'll send us last year's statements and we find a hidden rate increase and as you said, they put that right in the fine print.

Jim Fitzpatrick: 3:46

They do If you don't have any problem with it. That is incredible.

Amberly Allen: 3:49

Yeah, they don't send you any notification. It's typically on your statement that you have to download at the end of the month, when your controller is the very busiest.

Jim Fitzpatrick: 3:56

Wow, that's amazing and it's in like six-point font.

Amberly Allen: 3:58

Eight-point font that says if you continue processing with us, you've agreed to that rate increase.

Jim Fitzpatrick: 4:03

Unbelievable it is. Yeah, as you said before, if we did that in the auto industry, we'd be crucified, right.

Amberly Allen: 4:08

We would Absolutely. No dealer could get away with that.

Jim Fitzpatrick: 4:10

Yeah, no there's no question about it. Yeah, from the time that they make the decision, walk us through what day one looks like, because I know that it's a big endeavor for a dealer, right, right to move over that's right credit card process.

Amberly Allen: 4:23

So we have 93 items on our checklist for a reason because we've learned it a thousand times how to do it the right way right.

Jim Fitzpatrick: 4:28

Probably some mistakes and items. That's right. Let's put this one on there.

Amberly Allen: 4:33

So first we want to start with the LOI process. We want to work together. We want to get a list of all of their employees. They're going to have to have a new application and so if a dealer hasn't opened up a merchant account in a while, the banks look at it like opening a bank account. And so there are some federal FinCEN. Know your customer rules, okay, so we'll walk them through all of that, the application process, and then for there we from there we get a list of their employees on who they want us to train.

Amberly Allen: 5:00

We have a proprietary training process called our dealer merchant services University where we've trained and certified 16,000 dealership employees so far across the country specific to word tracking compliance training. And then we actually send our team on site to the store and work specifically with accounting on their reporting and reconciliation process. We've got integrations and custom-built reporting for the accounting team. And then we work with IT make sure the machines are working properly. We work with the service advisors to make sure they know how to handle the new machines and the word tracking. So very much a white glove launch on-site rollout so that your controllers don't have to be taken off point from their day-to-day. I think it's also cool that your team is't have to be taken off point for their day-to-day.

Jim Fitzpatrick: 5:40

I think it's also cool that your team is made up of controllers, so when those two are able to converse, they're speaking the same language, right? I mean, the one knows what the other one's looking for, right?

Amberly Allen: 5:51

Well, we have a joke If the controller's not happy, nobody's happy, that's right. And most of our dealers don't find that funny at all. They know, they want to keep their controller happy. And so we do. Our accounting team is comprised of former controllers, so when they call us, not only do we answer and we're stateside, but we also understand exactly what they're looking for and we work at the speed of business, right? We know that they need an answer, so that they can reconcile their books and keep their day moving.

Jim Fitzpatrick: 6:15

You said stateside. That means a lot, by the way. It does, at least to us it does, I'm sure, to your clients as well, because there's nothing more frustrating than having a problem in communication. That's right and going. I just got to get an answer to this Correct. You know what I mean. So you're all here and ready to take the calls. How big an issue is this out there?

Amberly Allen: 6:34

Well, we talk to dealers all the time. We're always educating them with educational webinars. We want to make sure the dealer body is doing this the right way. We know the audits are coming, so we don't want them to charge any surcharge on debit cards we have the technology that knows the difference between credit and debit cards and what's important there is that they make sure that they're trained, that they are compliant in their debit and credit card processing and really making sure that it all is flowing properly.

Jim Fitzpatrick: 7:03

Right, right, yeah, for sure. And for the dealers that are on the program, you have shared with me some astounding numbers as to what these dealers are able to realize. Right, sure, and it's just incredible. You must get phone calls from dealers going wow, I've got 10 stores and this has been a game changer.

Amberly Allen: 7:21

Well, 10 stores could equate to $2.5 million in savings over three years net profit savings. We had a dealer group today that we talked to and we showed them their numbers. We looked at their actual statements. This isn't pie in the sky numbers. We look at their numbers ahead of time and then we look at them once they've launched and so we know we're accurate in our assessment. And so, yeah, a 10-store group, $2.5 million in net profit savings over the next three years. So a good rule of thumb is for every $10,000 a dealer is spending today, they can save $7,000 a month. So around 70% in savings, $84,000 a year and just over a quarter million dollars in net profit savings over three years.

Jim Fitzpatrick: 8:00

Okay, this is what we call a no-brainer. I mean dealers you've heard me say this before on this very topic with Amber Lee but if you don't make this phone call, I will be mad at you. I mean, this is a no-brainer and a great way to pick up. Maybe $2.5 million if you've got 10 stores, but even if you have one store, I mean I'll take another $250,000 at the end of a three-year period of time just for making that switch and also being compliant and doing credit cards the right way, the way they should be done, right, of course.

Amberly Allen: 8:30

Communicating it the right way to your customers so you mitigate any CSI issues, making sure your accounting team is happy. There's many components to it right Wholesale parts and extended warranties a piece of it. We also know that some states are deeming a surcharge taxable. So we also know that some states are deeming a surcharge taxable. So you want to make sure that you work with a partner that's up to speed on all of it. Because there are red flags everywhere.

Jim Fitzpatrick: 8:50

Right, and when they come knocking and they will it's just a question of not if, but when. You don't want to get caught in that area.

Amberly Allen: 9:02

Well, a perfect example. When we do these educational webinars, we'll have people call and say well, I'm charging certain customers over $3,000 and I'm doing it myself. Jim, I can tell you that this is not a do-it-yourself project.

Jim Fitzpatrick: 9:12

Don't try to do that. Don't try to do that. Not a good idea.

Amberly Allen: 9:15

There's over 400 different interchange rates and for compliance you're not allowed to profit on any one transaction, and so we have to make sure that that pricing is accurate. We want to make sure that they're not charging above 3%, so you can't charge anything above 3%. You can't just make up an arbitrary number. 3% is the max you can't charge on debit cards.

Jim Fitzpatrick: 9:35

You have to have signage Right All of those pieces of it.

Amberly Allen: 9:38

And so we have lots of dealers that call and say I think I'm doing this wrong. Can you help me clean it up?

Jim Fitzpatrick: 9:46

So we're happy to do that and then you find out they were doing it wrong. They were, yeah, and that's a scary part or a scary point, but nevertheless, you know you're a phone call away, dealers, or a click away, you know, from doing it right and, at the same time, making money doing it. And you know the reason that we love when Amberlee comes into the studio is we get a ton of different comments and also questions.

Amberly Allen: 10:07

And I welcome them calling any of my dealers right. I've got dealers for them to talk to, whether it be a dealer principal or a service director, a controller, even anybody that they want to talk to within the store to really see what it's like to experience a surcharge and working with dealer merchant services.

Jim Fitzpatrick: 10:22

In the dealer 20 meetings. I bet you've been like the best idea award. We've won a few of those.

Amberly Allen: 10:28

It's always a huge compliment when we get a call from a dealer that says, hey, you're working with several folks in my, in my 20 group and we'd like to talk to you.

Jim Fitzpatrick: 10:35

That's a huge compliment to us and there's no exclusivity, right? It's not like you. If you go into a town, you can't hit the other dealers, right, that's right.

Amberly Allen: 10:42

We have a tendency to do that, though there are certain towns where we'll go and we do all the processing for all the stores in a certain area. It makes sense. It's growing quickly.

Jim Fitzpatrick: 10:52

Yeah, and I would think that we talked a little bit about it. But some of the really large publicly traded groups, they're all over you, right, Because they're like we're having all those conversations, right.

Amberly Allen: 11:03

Every dealer group is having a conversation about this. Should I go to surcharge, should I not? What are the pros, what are the cons, what are the rules Right? And we'll help them navigate that. Essentially, they have to figure out if it's the right decision culturally for a fit for them. But I feel like it's not a matter of if, but when.

Amberly Allen: 11:20

they go to this Right 30 to 40% of all new merchant accounts are being opened as a surcharge account. But there's some complexity because some merchants are providing what we call a zero fee or a cash discount and we really want to make sure that they don't go with a program like that. Compliance surcharge is the only fit for automotive One, because there's a real target on their back as far as making sure they're in the spotlight and doing it the right way. But also from a CSI perspective, you can't charge a customer on a debit card and so a zero fee or a cash discount program, they're charging on all things plastic.

Jim Fitzpatrick: 11:54

Okay, yeah, that's interesting there. What if a dealer is not ready to pass along these fees? What can you provide to dealers who are not really ready to surcharge?

Amberly Allen: 12:03

We recommend knowing their numbers, we recommend making sure we take a closer look and seeing if there's hidden fees, if they've received a rate increase, things like that, and just being armed with great data. And sometimes dealers want to. They know that they need new, upgraded equipment and they know they're paying too much, and so they'll come to us and we'll just do their traditional processing for a period of time, we'll make sure they've got upgraded machines.

Amberly Allen: 12:27

That's typically at no additional cost to the dealer, so there's really not a lot of upfront cost. And so we'll provide them new, updated machines with Google Pay and Apple Pay and all these great things, and then they'll just do traditional processing with us for a certain period of time and then they'll move to surcharge. So they get a rate savings, they get upgraded machines and that they know at some point in time when they're ready to go to.

Jim Fitzpatrick: 12:53

Surcharge. We can simply flip the switch and make sure their team is trained. Very good, yeah, very good. Final thoughts, I mean, as we wrap up this segment what do you want to leave the dealers with?

Amberly Allen: 13:00

Well, it's such a privilege to work with all these smart guys and gals across the country and it's such a huge compliment that they tell their friends and their colleagues in the space. And we want to just continue to be a superior company and one of excellence, so we're grateful for it. We're grateful for the growth.

Jim Fitzpatrick: 13:19

Well, we are grateful for you to share your story here at CBT News. Very much appreciate it. I know a lot of dealerships have benefited greatly from your appearance here. Dealers, this is your opportunity. We're in an area right now in the industry that every single penny counts, and this is an area that you just heard. If you have 10 stores, you could be picking up another $2.5 billion over the next three years. I think that probably warrants a call to Amberly. I'm going out of limb here, but if I were you, I'd make the call right now. So, Amberly Allen, founder and managing partner at Dealer Merchant Services, thank you so much for coming in once again.

Amberly Allen: 13:54

Yeah, thank you Great.

Jim Fitzpatrick: 13:57

Great Thanks for watching Driving Solutions exclusively on CPTnews. com.