Don't be an Idiot

[Trevor Kuntz]

Here's the timeline:

In November, 2011, I started GlowStickJunkie, an eCommerce store.

In January, 2012, I went to cash some checks at Wells Fargo and open a separate business account in preparation for adding credit card services. The customer services rep said "Oh, who are you doing your CC services through?" and I said "Authorize.net." She said, "Oh! Well we can offer you a direct account for Authorize.net that goes directly through Wells Fargo." I said, "Okay tell me more."
An hour later, I had been led through all of the contract and had entered all of the needed information. I made the stupid mistake of not asking enough questions and assumed that she had told me everything I need to know about the contract. So I signed on the dotted line.

February, 2012: I got my first statement...For $139.98. Holy sh*t! I thought that I was going to be paying $39.99 a month, not this exorbitant price.

Yesterday: I sold GlowStickJunkie

Today: Since I didn't need credit card services anymore, I called Wells Fargo to cancel the service. Now I find out that the Wells Fargo rep had entered me into a 3 year contract and that I would have to pay a $500 fee. Holy sh*t #2! So my only options were pay $5k over the next 3 years, or take the hit and pay $500 now.

The moral of the story, is don't be an idiot like me and don't trust people you think are "nice." I pretty much just screwed myself out of a ticket to Europe for no reason and now I have to live with my $900 mistake.

Anyways, with that said, for anyone who has an Authorize.net/Pay Leap/any other CC service, who would you recommend and how much do you pay for it each month? What bank do you use and do you have to pay any stupid fees for Merchant Account Services like I had to pay?

 

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[Fisherman]

Banks do not sell you stuff because they like you...

 

[Vigilante]

I use Square. No monthly fees, no contract. Transaction based fees ONLY.

 

[puckman]

We use Square and have processed $100K's with them at big events where we sell product. Its great. Just come packing with a myfi or internet access!

"Business Services" people at banks are salespeople. Mine at Chase constantly upsell me. But they can come in handy when problems arise, they will go to bat for you especially if you carry a balance. Finding a local bank is the best option imho over the big chains.

 

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[Trevor Kuntz]

I use Square. No monthly fees, no contract. Transaction based fees ONLY.

Vigilante, your stores are built on Interspire as well, right? You haven't had any issues using Square or anything? What kind of fees do you pay per transaction? I've only ever looked into the traditional CC service companies.

 

[CPisHere]

I have used square when I've had a booth at an event, but can you use them for e-commerce transactions?

 

[Amail]

Whoa - that's outrageous.

I rarely had problems negotiating bank fees. Overdrawn, fees for transfers, whatever - I call them and ask them to waive the fees, and almost always will get my way. I do, however, have a hefty HELOC with WF, so I think I get preferential treatment.

Have you tried calling and appealing to their sense of decency? They do have one, they just hide it. Explain your situation, you're just starting out, thought you were getting a better deal with WF, didn't understand the fine print, and this will tank you. I think you'd be surprised what you can get them to agree to with the right tone.

 

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[Trevor Kuntz]

Whoa - that's outrageous.

I rarely had problems negotiating bank fees. Overdrawn, fees for transfers, whatever - I call them and ask them to waive the fees, and almost always will get my way. I do, however, have a hefty HELOC with WF, so I think I get preferential treatment.

Have you tried calling and appealing to their sense of decency? They do have one, they just hide it. Explain your situation, you're just starting out, thought you were getting a better deal with WF, didn't understand the fine print, and this will tank you. I think you'd be surprised what you can get them to agree to with the right tone.

Yeah, I have always had a good experience with WF too, so it sucks that this happened. I explained it to the national representative and she said that it was too late to waive the fee because I had passed the 50 day mark. The local rep was sympathetic just because the woman that set up the contract for me was known for setting up crappy deals and he had taken her job after she got fired. He tried to get it waived, but I understood that there wasn't much he could do at his level.

It turns out that the 3 year contract part and the 50 day return policy are actually in an online guide. There was nothing stated in the actual contract I signed about the time frame of the contract, which I thought was kind of dishonest. I mean, if you're going to lock someone into a contract like that, you should at least explain to them the time frame of the contract. But at the same time, it is ultimately my responsibility to understand every minute detail of the deal. So yeah, live and learn, I guess!

 

[Amail]

Can they perhaps suspend the service for you for a while? Those prices might make sense if you wait until your volume is high enough.

 

[Trevor Kuntz]

No, that wasn't an option either. But it wouldn't have made sense to keep it anyways, since I no longer have an eCommerce business. If I do get back into eCommerce (which I probably will), I will find a service like Square or I will just use a cheaper traditional service. My coworker only pays $50 total per month for her CC service.

 

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[Amail]

Well, lesson learned then.

Make sure to put that in your ebook!

 

[Trevor Kuntz]

With the selling of the business, I was essentially back to zero, but this whole debacle has put me at negative $700 for my first business venture.

However, I look at it this way: in the 4-5 months that I worked on GlowStickJunkie, I learned way more about business than I would ever have had I "invested" that $700 in a marketing class, an entry-level web design class, and an introductory business class at my local community college.

 

[Darkside]

With the selling of the business, I was essentially back to zero, but this whole debacle has put me at negative $700 for my first business venture.

However, I look at it this way: in the 4-5 months that I worked on GlowStickJunkie, I learned way more about business than I would ever have had I "invested" that $700 in a marketing class, an entry-level web design class, and an introductory business class at my local community college.

Yea. I've had similar things happen to me where I've lost money making beginners mistakes. But, I'm much more efficient with cash now as a result of those mistakes. Some things you can't learn in a business class; you have to take your lumps in the real world, and you'll become a better entrepreneur as a result.

 

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[biophase]

It's cheap lesson. Learn to read contracts all the way through. You can probably dispute the link to an online guide because how do you know that they did not change the online guide after you signed the contract? Are you sure that the online guide on the date that you signed had the same verbage?

 

[sam22]

However, I look at it this way: in the 4-5 months that I worked on GlowStickJunkie, I learned way more about business than I would ever have had I "invested" that $700 in a marketing class, an entry-level web design class, and an introductory business class at my local community college.

I'd say $700 is pretty cheap, money-wise, to learn all that you did. Care to share a few things you learned?

 

[Trevor Kuntz]

I'd say $700 is pretty cheap, money-wise, to learn all that you did. Care to share a few things you learned?

Sure.

When buying domains, don't feel the need to rush. If it's still available now, chances are it will still be available tomorrow. Although I have some pretty good domains, I now look at the ones I bought when I first started and think, "I seriously thought that I could make it big with that domain?"

Don't worry so much about the look of your site. I spent almost a month and half "perfecting" GlowStickJunkie's template before realizing that it was just too intense. I have now realized that simplicity is better in a lot of ways.

Don't create a vertical logo. Go for a square logo.

Product pictures are everything. A lot of customers don't even read product descriptions thoroughly (believe me, I have learned this well at work. You can put "OUT OF STOCK" in Heading 1 red letters and people will still call and ask why their order is on backorder).

Start working on SEO from the get-go. It takes time to move up (and down) in the rankings. Focus on the site, but get your first tier going as quickly as possible too.

Get comfortable on this forum and don't be afraid to ask questions. The guys on here have a lot of experience and wisdom to offer. In the beginning, I would think, "Oh, I'm not going to ask about that. Those guys will think I'm stupid and I want to make it look like I've got everything together." WRONG.
With that said, ask specific questions and don't ask them to write out a 100 page guide to starting a business.

Don't even touch a business idea that you have any sort of emotional attachment to. Not even with a ten foot stick. If you go into something with selfish motives, your judgment will be clouded.

Set very public deadlines for your goals and find someone to hold you accountable to those deadlines. Pressure is good. It's how diamonds are created (cliche, but true).

Bounce your ideas off of others. An idea will always sound really good in your head because it's your idea. Someone with a second opinion can see clearly and will help you see the flaws in your idea, which is usually to your benefit. My first idea was to create and give away sheet music for free, hoping that people would click the ads on my site. I pitched the idea to my boss and he said "Why would you waste your time with that?" and then proceeded to show me all of the flaws in my idea. If he hadn't said that, I would probably still be wasting my time writing out sheet music, trying to compete with the thousands of free sheet music sites on the internet.

Find other people who are at the same point in the entrepreneurial journey as you and get to know them. Try to apply the Posse Foundation concept to entrepreneurship. It's good for everyone involved.

And lastly, just do it. (This one is pretty self-explanatory)

Edit: Just thought of another one...Listen to Mixergy interviews when you get a chance. Andrew Warner really digs deep and he especially likes to focus on the mistakes the entrepreneurs made on their paths to success.These interviews can be very informative and insightful, and I try to listen to a new one every other day.

 

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[sam22]

Great insights, thanks!

 

[jessica_david]

Feeling sorry after reading whole story better luck next time. Well I am with square, no monthly charges and no contract.

 

[JEdwards]

Every time I see the title of this thread I think of this video..

The Most Inspiring thing ever said... - YouTube

 

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[LightHouse]

If it makes you feel more at ease, i did the exact same with the exact same company on my first store back in 2006ish. I signed up for authorize and they had wellsfargo as their recommended merchant. I thought that meant that's one of the only banks that would work with it. Had no idea I signed a three year deal. When i sold in 2009 I went to cancel and still had a few months left, so i just paid out the rest of the term and cancelled since it was cheaper. Wells fargo was by far the most expensive merchant account I had ever had.

So two months after i cancelled i get a bill for 600 some dollars. No CS person could really explain what it was for... so i went ahead an tweeted WF and their CS account. Next day i got a call from a senior VP letting me know they wiped the charge out.... oh the power of social media!

So it happens to all of us, luckily for you it wasn't a percentage of the contract! Now i use first data+auth.net for my stores. much cheaper and first data sets up AMEX for you where as WF didn't do anything at all.

 

[Trevor Kuntz]

If it makes you feel more at ease, i did the exact same with the exact same company on my first store back in 2006ish. I signed up for authorize and they had wellsfargo as their recommended merchant. I thought that meant that's one of the only banks that would work with it. Had no idea I signed a three year deal. When i sold in 2009 I went to cancel and still had a few months left, so i just paid out the rest of the term and cancelled since it was cheaper. Wells fargo was by far the most expensive merchant account I had ever had.

So two months after i cancelled i get a bill for 600 some dollars. No CS person could really explain what it was for... so i went ahead an tweeted WF and their CS account. Next day i got a call from a senior VP letting me know they wiped the charge out.... oh the power of social media!

So it happens to all of us, luckily for you it wasn't a percentage of the contract! Now i use first data+auth.net for my stores. much cheaper and first data sets up AMEX for you where as WF didn't do anything at all.

Hmm, that's interesting! I'm glad that it wasn't a percentage. I'm sure that would have been a lot more than $500!

Is First Data + Authorize.net a package deal or do you have them separately?

 

[LightHouse]

Hmm, that's interesting! I'm glad that it wasn't a percentage. I'm sure that would have been a lot more than $500!

Is First Data + Authorize.net a package deal or do you have them separately?

They bill separately and have separate login's but i think first data set it up for me when i got their account. They are fairly cheap and easy to work with, I have had 0 issues with them. Thus why i continue to use their services. I know costco has a good program as well.

 

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[DeletedUser2]

some other merchants that do online stuff

Complete Merchant Solutions
Merchant Account Credit Card Processing - High Risk Merchant Services
Chase Paymentech
Transaction Services
visionpayments.com

 

[Trevor Kuntz]

They bill separately and have separate login's but i think first data set it up for me when i got their account. They are fairly cheap and easy to work with, I have had 0 issues with them. Thus why i continue to use their services. I know costco has a good program as well.

Yeah, I have heard that Costco's program is pretty comparable to Authorize.net.

 

[JEdwards]

Here is the deal with them, there cc machines. If you open and run your business.. they screw you.. if you close.. they screw you..

I had a small little account with one of my businesses, did pretty close to 6 MILLION dollars over a 3 year period in charges. I signed a 3 year contract. Sold business..

Way after month 36 I call to close the account. Sir we have to charge you a 295 fee.. For what. well it is a fee we charge.. ok for what. I dont know it says fee.. ok for what.. Don't know but you have to pay it.. As a matter of fact as a convience to you we will automatically pull it from your account. do you have any other questions.. yea.. can I speak to a manager. sorry all the managers are in a meeting.. all of them.. Yes all of them.. Are they having a meeting about fees? Don't know.. Do you know anything? Sir you are being rude...

 

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[PatrickP]

Here's the timeline:

In November, 2011, I started GlowStickJunkie, an eCommerce store.

In January, 2012, I went to cash some checks at Wells Fargo and open a separate business account in preparation for adding credit card services. The customer services rep said "Oh, who are you doing your CC services through?" and I said "Authorize.net." She said, "Oh! Well we can offer you a direct account for Authorize.net that goes directly through Wells Fargo." I said, "Okay tell me more."
An hour later, I had been led through all of the contract and had entered all of the needed information. I made the stupid mistake of not asking enough questions and assumed that she had told me everything I need to know about the contract. So I signed on the dotted line.

February, 2012: I got my first statement...For $139.98. Holy sh*t! I thought that I was going to be paying $39.99 a month, not this exorbitant price.

Yesterday: I sold GlowStickJunkie

Today: Since I didn't need credit card services anymore, I called Wells Fargo to cancel the service. Now I find out that the Wells Fargo rep had entered me into a 3 year contract and that I would have to pay a $500 fee. Holy sh*t #2! So my only options were pay $5k over the next 3 years, or take the hit and pay $500 now.

The moral of the story, is don't be an idiot like me and don't trust people you think are "nice." I pretty much just screwed myself out of a ticket to Europe for no reason and now I have to live with my $900 mistake.

Anyways, with that said, for anyone who has an Authorize.net/Pay Leap/any other CC service, who would you recommend and how much do you pay for it each month? What bank do you use and do you have to pay any stupid fees for Merchant Account Services like I had to pay?

Hey Trevor,

VERY sorry to hear about this. That really does stink that you/we have to be on the lookout for scammers even at a bank such as Wells Fargo.

Nice of you to post about this so you can warn the rest of us.

Thanks!

 

[Trevor Kuntz]

Way after month 36 I call to close the account. Sir we have to charge you a 295 fee.. For what. well it is a fee we charge.. ok for what. I dont know it says fee.. ok for what.. Don't know but you have to pay it.. As a matter of fact as a convience to you we will automatically pull it from your account. do you have any other questions.. yea.. can I speak to a manager. sorry all the managers are in a meeting.. all of them.. Yes all of them.. Are they having a meeting about fees? Don't know.. Do you know anything? Sir you are being rude...

Were you able to get the fee waived?

Nice of you to post about this so you can warn the rest of us.

That's why I posted it! Hopefully no one else will make the same mistake.

 

[LightHouse]

Yeah, I have heard that Costco's program is pretty comparable to Authorize.net.

authorize is just the gateway, costco is the actual merchant processing account. But yeah they have nice low rates, you would still have to use authorize as a gateway on your site though.

Here is the deal with them, there cc machines. If you open and run your business.. they screw you.. if you close.. they screw you..

I had a small little account with one of my businesses, did pretty close to 6 MILLION dollars over a 3 year period in charges. I signed a 3 year contract. Sold business..

Way after month 36 I call to close the account. Sir we have to charge you a 295 fee.. For what. well it is a fee we charge.. ok for what. I dont know it says fee.. ok for what.. Don't know but you have to pay it.. As a matter of fact as a convience to you we will automatically pull it from your account. do you have any other questions.. yea.. can I speak to a manager. sorry all the managers are in a meeting.. all of them.. Yes all of them.. Are they having a meeting about fees? Don't know.. Do you know anything? Sir you are being rude...

Yeah exactley what happened to me, random fee that is several hundred dollars, no explanation, no one could tell you a thing about it. I guess they just figure most business will pay without caring. Only way i got it waived was blasting them over twitter and getting a call from the main office. SAD business practices right there.

 

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[JEdwards]

Were you able to get the fee waived?

No, the time it would of taken to argue is not worth the 295 bucks.. So I just took it.

 

[Trevor Kuntz]

No, the time it would of taken to argue is not worth the 295 bucks.. So I just took it.

Yeah, that's pretty much what I thought, too.

Plus, even though I got suckered into the deal, I believe in personal responsibility, so I made the mistake and I had to pay for the consequences. Oh well!