Credit or debit? Ask, and save on transaction fees

  • On-line debits have a transaction charge of 37 cents each versus a higher percentage charge for credit transactions.

  • The PIN pads allow you to treat debit cards as on-line transactions rather than pay the credit card rate for that transaction.

  • Most banks don't tell you to about the lower rate for on-line debit cards.

  • Train your parts and service cashiers to ask the customer this simple question: Is this debit or credit? This will increase your on-line debit card penetration.

  • Rates differ with Concord EFS at 39 cents per transaction and Bank of America at 37 cents. PIN pads rent for $5 per month and can be plugged into the back of most credit card machines.

  • On-line debit transactions are the most secure and offer the merchant the lowest risk of fraudulent sales. This is why the discount rate is the lowest.

  • On-line debits should be encouraged over checks because of lower risk to the merchant.

See if your staff grosses enough

Do your employees develop enough gross? Try this calculation and compare.

Start with the total dealership departmental gross for the average month.

Divided by the number of employees. Your result is the gross per employee per month. To be among the top dealers, domestic dealers should be exceeding $7,000 per employee, regular import dealers should be exceeding $8,000 and high-line import dealers should be exceeding $12,000 per employee.

If you are not close, review how many people you employ who are not producing gross.

Is it really cheaper “down the street”?

Do you still discount parts and labor to your internal departments? Are you convinced that if your vehicle departments pay retail or matrix retail that your gross profit on the front end will suffer?

One argument is that the vehicle manager can get the work done for less down the street. That may be true. But there are a number of issues to look at.

Who guarantees the work performed “down the street”? You do, of course.

In many instances, a less qualified technician performs the work.

An obvious side benefit is that your sales staff can assure your customers that your factory-trained staff has performed all work.

Moreover, when you write a check to the outside vendor, it is pure expense as opposed to 70% gross profit on labor and 40% gross profit on parts going to your store. The lost gross argument is the one that should get your attention.

We all know that our managers work deals from cost. If the costs go up $50 to $100, your gross profit will not be hurt. Many of our clients have found that their front-end gross has not suffered and that their overall dealership gross has gone up.


Money-making minutes is provided by NCM Associates in conjunction with the Automotive Satellite Television Network (ASTN).