I suppose this post is partly rant and partly a warning to other merchants, but nonetheless, it is necessary since Groupon DOES NOT warn you of their fees and business practices in advance.
We are a very small, start up coffee house that was getting hit hard with fees from another credit card processing company. The other company was also charging $35+ per month, even if we don’t process any cards that month. So, when Groupon announced to us that they can process our credit cards for us at 1.88% with no monthly fees, how can we not switch to them?
We didn’t sign anything nor did we get training. We were given access to the merchant control panel and off we went with processing cards for our coffee house.
One VERY IMPORTANT thing they neglected to tell us if we make a mistake, we will be charged a fee for it.
Here is a mistake other business owners and cashiers may make, like we did, and it was very costly! So much so that we shut down our Groupon account. We are not in a financial position to afford these mistakes, but perhaps our experience will help others to be very careful.
When your cashier rings up an amount, and it’s the wrong amount, you will still be charged for that amount even if you rapidly click the refund button. Groupon’s control panel is very easy to use, and if you make a mistake, it’s very simple to undo the mistake, but Groupon does not warn you there will be a charge for your mistake.
Here are two actual mistakes we made.
Amount to ring up $3.00
Amount entered $300 (didn’t put in the decimal point)
Groupon fees: They charged us for both fees.
Amount to ring up $10.50
Amount entered $1050 (again, didn’t put in the decimal point)
Groupon fees: OY! Let me just say this again….OY!
Now, here is where I draw the line on anyone having access to our checking account, which is another reason I switched to Groupon. Our previous credit card processing company had unmonitored access to our bank account. They were taking money out and putting money in and collecting fees and we never knew when they were going to access our account. I don’t like that because it’s hard to keep up with them depositing money, and THEN taking their fees out before we even know how much will be withdrawn.
Groupon sales person assured us they NEVER take money out of our account. All fees, according to them, are removed on their end, before any money is deposited into our bank account. I specifically asked them about this, because of the previous company. Again, I was reassured Groupon would never be taking money out of our bank account and would only put money in after they held back any fees we owed them.
Today was a heart breaking day for us because Groupon people lied. We had no idea they were trying to access our bank account to take money out. That thought never crossed our minds.
We had just withdrawn the little bit of money we had in our account so we could buy inventory.
Groupon hit our bank account THREE TIMES trying to withdraw money. Not once were we given a courtesy call. We have been charged $105 in overdraft fees.
When I called Groupon today to ask why they were taking money out of our bank account, they said it was because of the two fees I outlined above when the decimal point was not put in. I reminded him that we were told Groupon doesn’t withdraw money and the fees are to be taken out of our credit card processing amount. He didn’t care.
There was enough money in our Groupon account for them to have deducted the fees. Instead of doing that, they accessed out bank account without telling us. Not once. Not twice. No phone call.
I closed down our Groupon account. The sales person didn’t even attempt to work with us. I told him this cost us a lot of overdraft fees and they told me they would never be taking money out of our account. What do I call this? I call this a lie. I call it deceptive business practices. I call it wrong.
It is hard enough to be a start up company without credit card messes. It’s hard enough to try to start a business without a bank loan. Every time we think we are getting ahead, something happens to set us back.
We will climb out of this, but we now have a horrible negative balance in our checking account and we have to start over.
Honestly, I don’t think anyone should have access to your bank account, ever.
And one more thing which is a huge mistake on my part. Since there is no contract with Groupon, that means nothing is in writing. I trusted them when they said they would never take money out of our account. I’m such a sucker. I should have got that in writing.
We just can’t take credit cards right now. The lessons in business management can be very painful when you make a mistake and this has been a huge mistake but we’ll keep moving forward.
Update to this post:
After further researching of Groupon credit card practices, I discovered something today on Cardfellow’s site. Groupon is not a credit card processing company. They use Global Payment and just run our credit cards through THEIR credit card processing company.
And what previous company did we use before we switched to Groupon, you ask?
Looks like we jumped out of the frying pan and into the kettle.