I started in the car business at 23 years old in 2005.
I quickly learned that maximizing profitability and expense management was always a car dealers biggest concern. Early on, I worked with dealers using direct mail as a trackable advertising source and was able to really drive traffic onto their showroom floors. I soon realized that everything in the marketing world had shifted to digital. Then, in October, 2018 I had a seizure, was admitted into the hospital and had to have emergency surgery to remove a golf ball size tumor that had developed in my brain.
During my recovery stage, I was able to spend time with my children, but there was always this drive in me to help car dealers. Two key people that were by my side 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 current legal changes in regards to payment options for customers where they could mitigate one of their largest expenses. So, I started heavily researching the laws and recent legislation and thus started my journey into uncovering the one legal fee that most dealers could pass along to their customers that they weren’t, credit card fees.
It all started in 2010 with the Durbin amendment, part of the Dodd-Frank Act, which started regulating debit card processing costs. Then, in 2017, a Supreme Court case determined that businesses have a First Amendment right to communicate to their customers that if they use a different form of payment, they could save money. This was confirmed in a 2018 a class action lawsuit that resulted in a $6.4 Billion settlement. Fast forward to 2022 and there are only two states that remain with a ban on credit card surcharges: Connecticut and Massachusetts. Last year, Colorado and Kansas both flipped and are now allowing surcharging in their states. I’ll say it again, this is the only fees dealers can legally charge a customer that most do not. But this is changing quickly as we have experienced over 2000% growth over the past 12 months.
Why haven’t all smart car dealers made this move? 1. There are only two manufacturers — Mercedes and BMW — that have credit card fees and bank fees as a specific line item on their statements. This is not a monthly expense that car dealers review. 2. Misconception of expense. I’ve talked to dealers who believe their expense is $4 - $5k / mo, then after review of their credit card statements, we determine the fees are around $12,000-15,000. 3. Some dealers are aware of the legal changes, but not sure if it’s legal in their area and what the compliance parameters are that enable them to implement a compliant program. I want every dealer to understand their options and make an educated decision for themselves to protect their business.