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Change places with a typical merchant for a moment. Remember that no one has ever taught you the difference between a transaction fee and an interchange rate. So what do you do when a fast-talking salesperson strolls into your office spitting out numbers?
None of what the sales agent says makes much sense to you, but he assures you the offer is the best deal in town-just because he feels charitable and likes you.
Although skeptical, you like the numbers and sign up for a shiny new leased terminal and processing contract. And then the first statement arrives.
It turns out that glib swindler "neglected" to tell you about the exorbitant monthly fee, your new, unthinkably high transaction costs and, oh yeah, your store does not clear nearly enough volume to qualify for that rock-bottom rate the agent promised you. When you call to complain, the salesperson has moved on, a commission check in the bank account, never to be heard from again.
While it would be nice to think that unethical deals like that were the exception in the payment card industry, enough bad actors have burned enough merchants to sully the name of the industry for decades.
"Our industry has been damaged by the unethical tactics of the few. They have made it difficult for all the other ISOs," says Kevin Jones, vice president for sales and marketing at First American Payment Systems LP, a Fort Worth, Texas-based ISO. "I am constantly offended by their smoke-and-mirrors tactics. They are damaging our reputation and our industry."
Because so many merchants either have suffered at the hands of an unethical sales agent or have heard stories from their business colleagues, many have the idea everyone in the payment card industry is cheating them, Jones says.
Closing Culture
The pressure to close sales at any cost often serves as the catalyst for ethics problems, says Mark Dunn, owner of Hartland, Wis.-based Field Guide Enterprises LLC, the publisher of FieldGuideForISOs.com.
"We are a service industry but if all management talks about is closing, that is step No. 1 down the road to questionable practices," Dunn says.
Most payment card professionals agree that commonly abused scams can increase short-term sales, but they harm ISOs over time. With so many agents making so many sales calls each day, a competitor is sure to come by and reveal a company's slight of hand. When that happens, an ISO will not lose merely a customer. An angry merchant may share the bad experience with industry associates, potentially endangering an ISO's other accounts.
Although it seems contrary to the way most agents think, companies should walk away from deals that do not work for the merchant, says sales consultant Brian Parsley, president of Charlotte, N.C.-based TrainOne Inc., which offers sales training geared to consultative selling.
"Understand that if you are not the right fit, then the ethical thing to do is send them to the people who are," Parsley says. "Put the customer before the commission. Ethics is not what you say. It's what you do."
Boomeranging Ill Intent
Shady business practices are not just a subject for Sunday-morning sermons. They also could wreck a sales team's bottom line, especially when practices cross the line from unethical to illegal.
"The pinnacle of shame is a [Federal Trade Commission] or attorney general investigation for deceptive sales practices. That is 'game over,'" says Dunn.
News stories or letters to the editor in a local paper follow as a close second in terms of destroying profits.
But even if investigators are not hauling computers out of the office on the evening news, questionable ethics still could pinch the bottom line, Parsley says.
Those upset customers may not stop at dropping an offending company's services, either.
Irate clients may post complaints on "slam" Web sites, such as RipOffReport.com, where users write screeds about bad experiences with companies. They also can take the old-school tactic of filing a complaint with the Better Business Bureau. Both tactics could mean lost profits for an ISO.
"People will stop doing business with you as you build your lousy reputation," Parsley says. "You may wonder why people will stop returning your calls. You may blame it on others. But if you look in the mirror, you will realize it all comes back to you."
