How My First Gym Was Duped Out Of $100,000 (and you might be getting duped too)

Credit card processing rates are potentially filled with hidden fees. Know these fees and how to calculate your effective processing rate, or you might be getting ripped off!

Dan Uyemura
May 24, 2021

If you're not using a fixed rate payment processor like Stripe - you should understand how to calculate your effectively processing rate and verify your rate.

Credit Card processing should be considered a cost of doing business today. The convenience and the speed and assurance of payment is unmatched in the gym and fitness space.

However, most credit card processing companies are preying on unsavvy gym owners and burying huge costs into the fine print of credit card processing statements.

At my first gym, LAX CrossFit, I was told we were paying 1.9% by my sales rep.

Turns out, after many years and millions of dollars in processing later - I actually did the math and we were paying 4.5% on average.

The difference in what I was paying vs. what I thought? $100,000.

How Credit Card Processing Sales Works

In the Credit Card processing world, the profits are all in the margins they make between what you pay and what they pay.

However, similar to auto sales, there's a lot of places to hide these numbers.

And also, similar to auto sales, they know you're looking at only one number - the credit card processing % on transactions.

A number you would be familiar with and looking for would resemble my "1.9%" processing rate.

So while you zero in on paying a lower base transaction fee - you're likely overlooking the hidden fees they're building into your contract.

Typical Hidden Fees

There are so many different fees that credit card processors have baked up over the years, it's mind blowing.

In another similar blog post, we made a list of of the hidden fees you should be aware of:

  • Visa/MC/AMEX Surcharges
  • Corporate/Rewards Surcharges
  • Monthly Minimum Fees
  • Statement Fees
  • Cancellation Fees
  • Refund Fees
  • Chargeback Fees
  • Gateway Account Management Fee
  • PCI Compliance Fees
  • Batch Fees
  • The list, literally can go on.

Total Processing Cost

The real question you should be asking is - what's the total cost of processing my credit cards?

This includes base rates, fixed costs per transaction and all the hidden types of fees is packed into your cost of business that you're not looking for.

To calculate your Total Processing Cost simply find every fee and charge that was a result of credit card processing.

Beware, these fees can (and will) be spread out across your merchant account statements, your bank statements, or other places. They generally will not place them in one, concise, easy to understand place.

Rude, huh?

How To Calculate Your True Processing Rate

That $100k that we effectively lost at LAX CrossFit could have been avoided if I was armed with this information.

To find your true processing rate, use this simple formula:

(Total Processing Cost / Total Amount Billed) * 100 = True Processing Rate

Make sure to include all the hidden fees in that.

Stripe - Hidden Fee Free Credit Card Processing

PushPress is proud to be the earliest partner of Stripe in the gym management software space.

We chose to work with Stripe because of their strict "no hidden fee" policy.

This means that when you sign up for PushPress, your processing rate is always the same.

You don't need to know what a "per transaction fee" or "merchant discount rate" are - because they're not there!

Over the years, PushPress clients have saved over $2 million dollars with flat rate, no hidden fee processing!

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Dan Uyemura

Dan Uyemura built his first gym in 2008. Since then he's built and sold a couple of gyms. In 2011 Dan decided to help gym owners run more stable, profitable businesses.

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