ACH Mailbag
04.14.08

Wow, what a response on last month’s article! Based on the number of calls and emails I received regarding the ACH processing I thought I would share some of the more common questions that came in.

A large number of the responses were in relationship to the savings salon owners were seeing by “doing the math”. There is a link on our website www.gohelios.com/math that is being provided in order to calculate actual savings based on each individual salon owners’ personal store data. It’s proven to be a valuable tool that breaks down the savings per month and per year. Salon owners are seeing hundreds, and in many cases thousands, of dollars worth of savings on an annual basis.

Here are a couple of the most frequent questions I received this past month.

How does the “sliding scale” fee structure work?

A sliding scale is used when there are no other fees to process the ACH. Many times ACH processors will advertise lower flat transaction fees, but they do not disclose other fees for adding, deleting or modifying accounts in “their” program. If your software provider offers an integrated ACH option then the client data is already managed in the software application so there is no need to add on additional fees.

So the rationale behind the sliding scale is to keep the integrity of the data that is sent over to the ACH processor. Here’s an example: Say the first tier pricing is for 1-50 drafts at $.50 per draft and a salon has 45 actual members that are supposed to be debited. The salon would be charged $22.50 to run those 45 drafts. Now if the second tier pricing is for 51-250 drafts at $.35 per draft then it would be more advantageous to “pad” the total number of debits by 6 so the salon would only be charged $17.85 for the entire draft which equates to a savings of $15.35.

See, the processors have done the math too?

You mentioned in your February article that debit cards are now being used at a higher rate than traditional credit cards which really surprised me. Could you tell me a little more about how I get people to bring in a voided check so we can start taking their money through ACH?