In an era where every dollar counts, Amberly Allen, founder and managing partner of Dealer Merchant Services (DMS), is helping auto retailers uncover substantial savings by shifting credit card fees, legally and effectively, onto customers. During today’s episode of Driving Solutions, Allen breaks down how compliant surcharge programs can significantly improve dealership profitability and why doing it wrong can create costly legal trouble.
Dealer Merchant Services currently works with over 1,000 dealers in 45 states and is endorsed by 17 state associations. Since launching in 2020, the company has helped more dealers implement compliant surcharge programs than any other provider, outpacing competitors by as many as 600 rooftops. The firm also works with trucking, RV, and motorsports businesses, many of which operate under the same ownership groups as franchised dealers.
Allen explains that understanding state and federal regulations is essential for success. “You can’t charge customers for using debit cards, and you cannot impose a fee greater than 3%. These are non-negotiable rules,” she said. Using improper practices, such as cash discount models that apply fees to all card types, can place dealers at risk of fines or audits.
“A compliance surcharge is the only appropriate solution for the automotive industry."
In addition, Allen notes that by using proprietary software, her company can also help customers identify rate increases buried in monthly statements and calculate the percentage of debit card usage, ypically 30% to 40% of transactions, which would be unaffected by surcharges.
Dealers working with her firm can expect a white-glove onboarding process. Dealer Merchant Services utilizes a 93-point launch checklist and trains staff through its proprietary Dealer Merchant Services University, having certified over 16,000 dealership employees. Training spans sales, service, accounting, and IT departments.
The potential financial impact is eye-opening. One 10-store dealer group is projected to save $2.5 million in net profit over three years. “For every $10,000 in monthly credit card costs, a dealer can save roughly $7,000, a 70% savings,” Allen said. Even smaller stores can realize six-figure gains over time.
However, for dealers not ready to implement surcharging, Allen recommended starting by understanding their current processing fees and upgrading to better equipment at little or no upfront cost. When ready, switching to a surcharge program is seamless, with full staff training and system integration.
Allen concluded by expressing gratitude for her clients and reiterating her commitment to excellence as her company grows. Fitzpatrick encouraged dealers to contact Dealer Merchant Services, noting the significant financial impact possible even for smaller dealerships.
