Dealer groups with stores in several states must follow a different set of surcharge rules in each one. A payments partner that tracks those rules and trains staff to explain them keeps the customer experience clear.
On the latest episode of Inside Automotive, Panos Kotselas, Senior Director of Payment Operations at myKaarma, explains how dealers can handle surcharge compliance across states and payment channels in the first part of a three-part series.
Tracking surcharge compliance across state lines
According to Kotselas, surcharge compliance gets more challenging with each rooftop a dealer group adds. While most dealers know they can pass surcharges on customers paying by credit card, they can’t on customers paying by debit card. The rules become more complex when a group operates multiple rooftops, and he said that dealers want online payments to mirror the in-store card-present experience from arrival through final payment.
"A dealership does not need to manage a dashboard or a setting to do surcharge compliantly. myKaarma owns that and makes sure that we’re maintaining your compliance."
For instance, Kotselas mentioned that a dealer group with stores in Connecticut, New Jersey and New York came to myKaarma this week. He notes that each state has different surcharge rules, which requires the CFO to know what is allowed and required in each. Much of it comes down to state rules and the card networks of Visa, Mastercard, Discover and American Express. Additionally, Kotselas said that dealers must balance all of those while delivering the best possible customer experience.
Keeping customers comfortable
Kotselas also notes that keeping customers happy should come first, with savings following. A $10,000 down payment or $1,000 service bill should feel as good as an Amazon purchase, he said. So, myKaarma aims for a class-leading payment experience across verticals, including service, parts, and vehicle deposits.
Savings come from making the surcharge experience clear and transparent, Kotselas said. Dealers that opt not to surcharge can still save in other areas. Kotselas added that surcharge launches tend to go more smoothly when employees are trained beforehand.
“We’ve seen remote training in advance of launches really help to give the users an understanding of what surcharge is and how it works.”
On-site training helps prepare staff for a smooth launch, he said. myKaarma also offers quick tips whenever a customer pays in person. The prompts explain the surcharge and how it works, as well as how to respond to customer objections. This helps staff stay ready to answer questions, Kotselas said.
Keeping surcharges from surprising customers
myKaarma owns the rules engine, so dealerships don’t need to manage a dashboard or settings to stay compliant, Kotselas said, adding that dealers can rely on the system. According to Kotselas, the company maintains compliance with state and card brand regulations, whether customers pay online, in person by card, or through online bill pay.
According to Kotselas, California and New York change rules regularly, so myKaarma has to stay on the cutting edge. When dual pricing is required, the company builds it and readies dealerships for the change. Additionally, Kotselas said the company wants dealerships to have the best possible experience when they go live and take payments.
While credit and debit remain popular, Kotselas said buy now, pay later is gaining ground. While some customers can’t pay upfront for an unexpected $2,000 service, others prefer paying by bank rather than carrying cards. Therefore, myKaarma offers those options, Kotselas said.
