I started in the car business at 23 years old in 2005.
I quickly learned that maximizing profitability and managing expenses were always a car dealer’s biggest concerns. Early on, I worked with dealers using direct mail as a trackable advertising source and was able to drive traffic to their showroom floors. I soon realized that the marketing world had shifted to digital. Then, in October 2018, I had a seizure, was admitted to the hospital, and underwent emergency surgery to remove a golf-ball-sized tumor from my brain.
During my recovery, I was able to spend time with my children, but I still felt a strong drive to help car dealers. Two key people who stood by me during one of the toughest times in my life were car dealers. I believed there had to be a legal way for dealers to take advantage of changes in payment laws to mitigate one of their largest expenses. I began researching the laws and recent legislation and started uncovering the one legal fee most dealers could pass on to customers but weren’t—credit card fees.
It all started in 2010 with the Durbin Amendment, part of the Dodd-Frank Act, which began regulating debit card processing costs. In 2017, a Supreme Court case ruled that businesses have a First Amendment right to inform customers they could save money by using a different payment method. This was further confirmed in a 2018 class action lawsuit that resulted in a $6.4 billion settlement. By 2022, only two states—Connecticut and Massachusetts—still had bans on credit card surcharges. Last year, Colorado and Kansas lifted their bans and now allow surcharging. I’ll say it again, this is the only fee dealers can legally charge a customer that most do not. That is changing quickly, as we’ve experienced over 2000% growth in the past 12 months.
Why haven’t all smart car dealers made this move? First, only two manufacturers—Mercedes and BMW—list credit card and bank fees as a specific line item, so this isn’t a monthly expense most dealers closely review. Second, there’s a misconception about cost. I’ve spoken with dealers who thought their expense was $4,000–$5,000 per month, only to discover after reviewing statements that it was actually $12,000–$15,000. Third, some dealers are aware of the legal changes but aren’t sure whether it’s legal in their area or what compliance requirements apply. I want every dealer to understand their options and make an informed decision to protect their business.