MY TURN I BY LARS RUNDQUIST Tips for Saving on Credit Card Fees
R unning a music store or instrument rental business comes with unique challenges, including fluctuating demand, rental agreements and the need to integrate specialized inventory and payment systems. Add to that the rising cost of credit card acceptance, and it becomes critical for musical dealers to take a more strategic approach to manag- ing their payment systems. From POS issues to chargebacks, here are some solid tips on how you can reduce processing costs while staying compliant and retaining customers. SCRUTINIZE YOUR POS SYSTEM
PROPERLY STORE CUSTOMERS’ CARD DATA Then there’s the matter of client data: failing to comply puts your customer and your reputation at risk. Many merchants don’t real- ize that storing cardholder data, even for recurring rental plans, can trigger compliance issues if not properly secured. Start by completing the appropriate Self- Assessment Questionnaire (SAQ) and confirming your payment hardware and software support encryption and tokenization. If you store cards for memberships or subscriptions, work with a provider that specializes in re- curring billing. Being proactive about compliance can eliminate penalties and protect against data breaches, which can cost as much as $25,000 to c=orrect for small businesses. In most cases, work- ing with an outside professional to help is well worth it. ELIMINATE CHARGEBACKS Another frustrating, and costly, aspect of running a music busi- ness is dealing with charge- backs. This is particularly true for stores that offer monthly rentals, lessons or repair plans. These recurring charges are sometimes disputed by parents who forget about the charge or assume the rental period ended, or systems repeatedly running expired credit cards on file. Other times, chargebacks result from poor communica- tion around return policies or service terms. To reduce disputes, ensure your billing information is eas- ily recognizable and consistent with your store name. Always send email reminders or re- ceipts before monthly charges
The best place to start is by scrutinizing your POS (point-of-sale) system. Many music merchants use specialized or legacy software to manage rentals, inventory and customer accounts. However, if your POS system isn’t properly integrated with your credit card processor, you may be paying higher rates due to incomplete transaction data or manual entry. When your system doesn’t pass along the right data, you risk downgrades that result in higher interchange fees. Even worse, having to tap a card twice or using a standalone terminal outside of your POS can create inefficiencies, accounting headaches and increased fraud exposure. To avoid this, make sure you’re using a processor that is compatible with your POS software and supports niche trans- actions, such as rentals. An integrated solution ensures seamless transactions, fewer errors, and lower costs per tap. Take a fresh, objective look at your entire system. Identify where your process breaks down and fix it. Something as simple as re- placing an outdated terminal can save you money — not only will your employees avoid hand-keying transactions, but those transac- tions will also qualify for lower interchange rates. Process optimization like this is one of the easiest ways to reduce costs without disrupting your business.
“If your POS isn’t properly integrated with your credit card processor, you may be paying higher rates due to incomplete transaction data or manual entry.”
ENSURE YOU HAVE PCI COMPLIANCE Adding value for your business is paramount but so should be protecting your customers’ data. PCI DSS (Payment Card Indus- try Data Security Standard) was created by credit card brands to mitigate rising data theft. But PCI compliance isn’t just a technical requirement — it’s a cost-saving and risk-reduction strategy. If your business isn’t compliant, your processor may charge monthly noncompliance fees, which often go unnoticed. These fees can vary wildly and increase with hardly any notice.
26 I MUSIC INC. I SEPTEMBER 2025
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