MY TURN I BY LARS RUNDQUIST What Are Your Rentals Actually Costing You?
I n my work with school music dealers across the country, rental revenue isn’t just another revenue stream. For most, it’s the foun- dation the rest of the business is built on. Monthly rental pay- ments fund inventory, staff, and the relationships with schools and band directors that keep your pipeline full year after year. This makes it worth asking: Do you know what you’re actu-
can appear as line items that don’t change month-to-month, which makes them easy to overlook. Third, if your rental manage- ment system and your payment processor aren’t fully integrated, you may be creating unnecessary friction in how transaction data flows through, and that friction has a cost. Fourth, check how your busi- ness name appears on your cus- tomers’ card statements. Rental payments that show up under an unfamiliar or truncated billing de- scriptor are more likely to be dis- puted, especially by parents who signed up months earlier and don’t immediately recognize the charge. WHAT YOU CAN DO The good news is that most of these issues are addressable without disrupting your rental program or switching processors. A detailed statement review, ideally with someone who under- stands the music retail and rental space, can surface what’s actu- ally happening. Sometimes that review confirms you’re in good shape. When it doesn’t, having an expert negotiate improvements on your behalf with your processor is often the fastest path to a bet- ter outcome. You’ve built a rental program that keeps students engaged with music. It’s worth taking an hour to make sure the processing costs behind it reflect that. MI Lars Rundquist is an account executive at Merchant Advocate. He works specifically with school music dealers and can be reached at lrundquist@merchantadvocate.com.
ally paying to process those rental transactions every month? Most dealers I’ve talked to have a rough sense of their overall processing costs. But rental transac- tions have characteristics that set them apart from a typical retail sale — and those differences can quietly push your costs higher than they should be. WHY RENTAL TRANSACTIONS ARE DIFFERENT When a family signs up for a rental program, they typically agree to a recurring monthly charge stored against a card on file. That structure creates a dif- ferent cost profile than a one-time instrument sale where a card is physically present at the point-of-sale. Adding to that is rental programs often run a mix of card types: consumer credit, debit and occasionally
reward cards with higher interchange costs. If your POS or rental management software isn’t passing along complete transaction data with each charge, some of those transactions may be downgraded to less favorable interchange categories — meaning you’re paying more per transaction than you should. In many cases, this comes down to how systems are configured, including your pro- cessor, POS and rental management software. They all must work together for transactions to flow through correctly.
“Check whether you’re being assessed any fees tied to compliance or data security that you may not have noticed.”
WHAT TO LOOK FOR If you haven’t reviewed your processing statement in detail recently, there are a few things worth examining. First, look at how your recurring rental charges are categorized. Transactions that qualify for standard card-not-present rates are one thing. Those that are downgraded to non-qualified or mid-qualified categories are another, and the difference in cost-per-transaction adds up quickly across hundreds of monthly rental payments. Second, check whether you’re being assessed any fees tied to compliance or data security that you may not have noticed. These
26 I MUSIC INC. I JUNE 2026
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