This submission is more of a warning than a complaint which I hope future potential clients of Collective Point of Sale (CPS) will read before signing. I regret not reading this board before signing myself up at the end of June. It is not a complaint because I take responsibility for not asking the right questions (which I did not know to ask) or reading the full agreement (which took 5 minutes to find on line with the help of a customer service manager when I wanted to cancel) Everything Collective Point of Sale does is legal, but in my opinion and experience is underhanded and unethical. So, I am sharing my experience, information I did find, and questions you might want to ask of any merchant account provider to hopefully save you mental and financial grief.
Things I know now that I wish I knew before signing:
-CPS is a 3rd party provider. In my case Elavon is the primary provider. I am not sure if CPS uses other primary providers other than Elavon. This means that there are 2 agreements or contracts and not one contract with CPS which I thought was the case. Two agreements means paying fees to two companies even though they might be linked into one statement and two cancellation fees if you decide to cancel. In my case this will amount to over $650.00 to cancel for the two companies. When I asked how long the contract was my rep told me there was no contract and that I would be seasonal (month to month) and could close the account at anytime. My mistake for not reading the contract. Also, part of the CPS cancellation fee has to due with fees for equipment rental. With the plan I signed up for I call in the credit card numbers. What I know now: The paper slips they sent me to write the credit card numbers on, is apparently considered “equipment”. What I thought was one company is really two companies with more cancellation fees than I ever could have imagined.
- I am a hobbie artist who has just started selling occasionally at markets (a few around Christmas and a few in the summer) and was considering whether a merchant service account would be feasible for my situation. I was told by my CPS rep that they had the perfect solution for me in that I could operate a seasonal business, no contract, month to month, close and open the account at anytime. No fees for cancellation. No equipment rental as I fill out credit card information on slip of paper and call the information in. What I know now: CPS signed me up as a seasonal business, but Elavon never received that form. After numerous calls to Elavon they told me I did not qualify to have a seasonal business because I can create my art and have the possibility to sell at any time of year. A seasonal business would be along the lines of selling Christmas trees where the sale only happens once a year and is clearly seasonal. Because of this I will be paying fees every month vs only the months when I have a table booked at a market. Again I was told I could close the account for the months that I would not be selling anything, but this is not the case.
-I had many problems in getting the account up and running because of incorrect forms sent from CPS to Elavon. After numerous calls to my CPS rep and his promises to rectify the situation he finally stopped retuning my calls, I presume he gave up on my situation. What I know now: My rep was there to sign me up, not to resolve mistakes he made.
-Elavon did eventually get me signed up on their own (which I now regret because I will be paying such hefty cancellations fees). They signed me up August 30th and my first sale was Sept. 3rd and I was charged full fees for the month of August. Fees I was told by my CPS rep would be $10.00 per month plus the 1.49%. When I asked what the $20.00 min. per card listed on one of the forms was he said, “Don’t worry about that, you won’t be paying $20.00 per card because each transaction takes away from the $20.00.” I told him I might be selling $300- $500 per month. What I know now: My rep put a much higher value on what I would be bringing in each month through credit card sales with the amount he put on the form and with the amount he put down for me vs the amount I said I would be making the $20.fee per card would have been less. My bill for August, the month I sold nothing was $50.00 vs the $10.00 that I assumed I would be paying.
Good Questions to Ask CPS or any Merchant Service Provider
1) Is %%_ the primary provider of the merchnat service or is %% a 3rd party provider?
2) Are there any other associated companies involved with the service that would have their own fees, contracts or agreements with penalties if the contract/agreement is broken?
3) How long is the contract or agreement with %__?
4) What are the fees for breaking the agreement?
5) Other than the monthly service fee are there other fees such as $20 per credit card accepted eg: Visa, MasterCard, AMEX.
6) Is there an online system to access transactions and statements? Is there a separate fee for this service?
7) Are there any technical issues or problems equipment that are causing a problem or are being addressed?
8) Is there a 24/7 toll free tech support number if problems are encountered? (CPS does provide phone help.)
9) Please send me your contract and any other agreements so I can read them before signing up.
If I could make some suggestions to CPS it would be these:
1) Educate sales representative to give the proper and correct information to the people they are signing up.
2) Encourage sales representatives to resolve problems and issues for clients and not to just close the sale.
3) Make any contract, agreements and fee schedules easily accessible to read vs the statement on the contract “I have read the terms of agreement”. As I mentioned, I would have never have found the terms of agreement which are on-line if the customer service manager had not taken the 5 minutes to walk me through the convoluted process to find it. The manager I spoke with said she has suggested making the agreement easier to find for potential clients to her supervisors, but they have decided not to improve the complexity of this matter. This tells me that there are good people working for CPS who are trying to do the right thing, but higher management knows they can make more money by keeping legal documents confusing and difficult to find.
4) Consider having, as the banks do for phone sales, a tape recorded conversation of the representative reading the terms of agreement and the signee verbally agreeing to each article in the agreement or having the opportunity to ask questions as they arise.
5) Consider not just signing people up to make money for CPS, but to discuss and develop a business ethics plan for the company.
My hope is that by sharing my experience and lessons learned with CPS that it will help others to save money, time and frustration for others.
As a side note: if you are looking for a new merchant service provider there is new technology on the market to take credit cards through your IPhone or Blackberry. www.squareup.com in the US and www.payfirma.com in Canada. Rates seem reasonable, reviews are great and people I have spoken with using Payfirma are happy with the service. Here is a quote from the Payfirma website: WHY IS PAYFIRMA OFFERING INTERCHANGE?
Canadian businesses are fed up with hidden fees, excessive surcharges and convoluted billing structures when it comes to payment processing.
In May of 2010, the Ministry of Finance released the Code of Conduct to address merchant complaints. The Code’s first and most important recommendation was:
Payfirma is offering Interchange Pricing as the simplest, most transparent and cost-effective model to ensure merchants are fully aware of the costs. The model also enables these business owners to maximize the profit on each transaction!
I haven’t signed up yet, but for me I think Payfirma could be a good option to CPS.
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