The Margin Problem Dealers Rarely Audit: Credit Cards (And 3 Practical Fixes) | Eric Cohen, CEO at Merchant Advocate
Car Dealership Guy Podcast
The Margin Problem Dealers Rarely Audit: Credit Cards (And 3 Practical Fixes) | Eric Cohen, CEO at Merchant Advocate
Annotations will appear as you listen
0:00
31:13
Term
dealer markup
Dealer markup is when a car dealership charges more than the price suggested by the manufacturer. This can happen if a car is in high demand or if the dealership wants to make more profit.
Term
credit card processor markup
Credit card processor markup is the extra fee that businesses, like car dealerships, pay when customers use credit cards to buy something. This can add to the total cost of buying a car.
Term
hidden fees
Hidden fees are extra costs that you might not see when buying a car. They can make the car more expensive than you initially thought.
Term
Visa MasterCard fees
Visa and MasterCard fees are charges that businesses pay when customers use credit cards to buy something. Sometimes, dealers might add these fees in a way that makes them look like regular costs.
Term
non-negotiable
Non-negotiable means something that can't be changed or discussed. In car buying, some fees are said to be non-negotiable, but you might still be able to negotiate them if you know what to ask.
Brand
Mercedes
Mercedes is a luxury car brand that makes high-end vehicles known for their quality and technology.
Brand
Honda
Honda is a car company that makes many different types of vehicles, like cars and motorcycles.
Concept
parts and services
Parts and services are the repairs and maintenance that car dealerships provide to keep vehicles running well.
Term
MSRP
MSRP is the price that the car maker suggests dealers sell a car for. It's like a guideline for how much you should expect to pay.
Term
dealer fees
Dealer fees are extra costs that car dealerships might add on top of the car's price. These can include things like paperwork fees or preparation costs.
Term
incentives
Incentives are discounts or special deals that car makers or dealers offer to help sell cars. They can make buying a car cheaper or more attractive.
LIVE
They look like Visa MasterCard fees.
They're padded fees.
They're 100% nowhere in Visa MasterCard language.
A non-PCI fee could be $75 per month per location.
If you have 20, 50, 100 locations,
that fee is because someone didn't answer a survey
that they didn't even actually know they had to answer.
So it is.
Today I'm joined by Eric Cohen, CEO at Merchant Advocate.
One of the biggest profit leaks isn't in inventory or payroll.
It's buried in credit card processing fees.
Eric breaks down how the processing industry actually
works, why most dealers are overpaying,
and how many so-called fixed fees are fully negotiable.
If you care about protecting profit
without cutting headcount or growth initiatives,
this conversation matters.
A big thank you to our sponsors
for making this episode possible.
Fly, icon technologies, and of course, Merchant Advocate.
And now let's get into the show.
Eric Cohen on the CDG Podcast.
Eric, welcome.
Hello.
Thank you for having me.
Thank you for purchasing a professional microphone
before this.
That makes me feel very, very good.
It always upgrades the podcast experience.
Eric, this is a very timely conversation,
which is why I'm excited to chat with you,
because one of the most recurring topics right now,
that comes up in conversations with dealers,
and is coming up in 20 groups, in our circles groups,
and whereas it's just about where to focus for the dealer,
and specifically the two main items dealers are focusing on.
I didn't tell you this beforehand, obviously,
but if you just have to guess right now,
just total guess.
What do you think dealers are,
I would say disproportionately focused on,
obviously, as an operator, always focused on everything,
but just ask yourself right now, December 2025,
what do you think is coming up in conversation with dealers?
Maybe you even know.
Yeah.
I mean, right off the bat, I would think one thing would be,
you know, how did they reduce their expenses next year?
What's going on with their expenses?
I think they're leaking money, right?
And then how did they sell more cars next year?
It seems obvious, but.
So, you know, I think it's important to think about
that.
So, yeah.
So the first point you made is correct.
So naturally, you know, I spoke to several dealers before this
and I asked, I said, okay, I said,
if you're saying that expense cutting is monopolizing
all of your conversations on circles
and your 20 groups wherever,
what specifically are our dealers looking at right now?
The answer to that was two things.
It was I'm looking at vendor,
vendor expenses, and I'm looking at people.
And then I asked, I said, okay, sounds normal.
If you're looking at people,
are you looking at changing comp plans?
Or are we looking at cutting people?
And it was the latter.
It was more so we're not touching comp plans,
but we are looking where we can, you know,
do we need every single person?
So anyways, I table set with that because I think that
we'll talk about expenses here right now.
I just think it's very timely and it's always timely.
But when volume is gangbusters
and you're just trying to find inventory to sell,
then maybe it takes a secondary seat.
So welcome to the pod.
I mean, where do we start, Eric?
Just tell me a little bit about yourself.
How did you become this expense cutting crusader?
Like I'd love to start about your background
and what you do.
Sure.
And we talk about expenses.
Our primary focus,
we're not really an expense reduction company
looking at everything.
We're super targeted into the credit card processing fees.
I will mention because I think it's important.
We are not a processor.
That's not what we do.
But my background, I have a master's in finance,
got it in Pepperdine out in Malibu, California.
So I played for two years while getting a MBA.
So it's kind of nice to be out there.
I wound up in a direct sales company
and I needed a credit card machine myself.
I said, I need a credit card machine.
I need to sell some product.
Then I realized that the credit card companies work
where every transaction you pay a certain amount
and never really understood it
and some sales rep was earning a residual income off of it
and realized, oh, this is a pretty good business to be in
where I could set people up to accept payment
and every time they run a card,
I would at that point in my life
earn a piece of every transaction.
So that's kind of...
So just to be clear, you were,
at one point you were a credit card processor.
You're not today though.
I was a sales office for a credit card processor.
I wasn't the one throwing the switches.
But yes, I sold processing
and I realized how unethical it was,
how shady it became as far as pricing
and who was really earning the money
and after a few years,
it didn't really sit well with me about the industry
and I decided to flip onto the business owner side
and really be an advocate.
That's how this whole thing was born is
I learned the inside mechanics
of credit card processing 101
and how many people are actually involved
and how much money is being made
and I just didn't believe in how the industry is run
and that's why I flipped to this other side
of being more of an advocate
and sitting next to the business owner
versus a cross from that.
Yeah.
And this is what sort of attracted me to your business.
Obviously, you came through one of the members on our team,
new of you, but I am curious,
you are, so you're advocating for the dealer
in this context, right?
What, just at a high level,
what is the biggest, either misconception
or what do dealers, would you say,
not understand about processing today?
Obviously, tens of thousands,
hundreds of thousands has ran through dealers
on a monthly basis as down payments, yada, yada.
But what are dealers missing to start at a very high level?
I think what most people are missing
in this is that it's not really
Visa MasterCard overcharging everyone.
You have different parties involved.
You have banks that earn some money,
you have Visa MasterCard,
but the pricing is really set by the sales rep
selling the processing
and that's the problem in all of this
is the more sales rep charges,
the more they make.
And it's a very cryptic type of bill.
It really understands the bill.
And I think a lot of dealers
don't realize that it's negotiable
and optimizable.
There's ways to reduce fees more than just negotiating rate.
There's a couple different reasons.
To what extent is this negotiable?
So you have the markup,
you have the credit card processor markup, right?
There's a wholesale cost, just like when you sell cars,
there's a wholesale cost and then there's markup, right?
The negotiable part is
on the markup
and the hidden fees
and the fees that look like Visa MasterCard fees
because they're spelled and
listed similar to a Visa MasterCard fee
but it actually is
profit for the processor.
So that's a negotiable part.
The optimizable part is
are you set up properly?
Are you running your transactions properly?
Are you coded properly?
Is everything being transmitted?
And the savings there could be upwards of 1%.
I mean, you could be paying 1% to 1.5% more
when you're not transacting
the charged correct way
because you're set up incorrectly.
We want to be very objective here, right?
Essentially what you're saying is
we could debate
what is like a market fee for this
and I want to get your opinion on that.
You know, a market markup
for credit card processing, but essentially
if we want to kind of use
different nomenclature here,
not dealers maybe overpaying,
rather dealers just in bad deals
that they've negotiated terrible deals
and there's a lot of, you know,
meat on that bone to basically trim.
That's essentially what's happening here.
Yeah, I mean, listen, it's hard to say
they negotiated a bad deal because, you know,
someone that owns a dealership should probably be able to negotiate.
I mean, that's part of what they do.
It's not that they don't know how to negotiate.
It's if you don't know the language,
if you don't know what's real and what's not real
and what's markup and what's not markup,
you only understand and can believe
what you're being told by a sales rep.
That's the problem.
So a lot of line items that, you know,
a rep might say is non-negotiable
actually really are.
Okay, before we talk about,
I want to get into the nitty-gritty,
like what are these fees?
How do they show up in the statements?
So how are you helping dealers today?
We obviously spoke beforehand
and you've worked with, you know,
tons and tons of dealers.
But specifically, if you're not a processor,
you're an advocate,
what are you doing with dealers today?
So our primary and the majority of what we do
is we negotiate and optimize their deal
with their current processor
without them leaving their current processor.
And that's really a big, big thing to understand is,
you know, a lot of times we talk to dealers
and they think, oh, you're just another processor.
Right?
Because they hear the word credit card processing.
We actually don't want them to leave their credit card processor.
So they could stay with the relationship,
stay with the processor.
We will lower their overall cost
and we take a percentage of savings.
Right?
So the more we save them,
the more we make, the more it benefits them.
That's one part of what we do
and another part of what we do
is now we hear a lot of dealers
that are moving to this kind of surcharge,
pass the fee to the customer
and not eat the fee.
And we could talk more about that later in the podcast here.
When those dealers are looking to do that,
we make sure it's done in the right way,
by state guidelines, by visa mascot guidelines,
and they're not being taken advantage of
by the processor once again.
This episode is brought to you by Fly, dealers.
If missed calls and inconsistent follow-up
are costing you customers, you need to hear this.
Fly is an AI communications platform
that handles calls, texts, and emails
before your team takes care of customers.
Their AI answers every call 24-7,
books, appointments on the spot,
and follows up until customers show up.
No more voicemail, no more missed leads.
Right now, Fly is offering free pilots
to CDG listeners till January 31st.
Visit usefly.com to book a meeting.
That's usefly.com, or click the link in the show notes.
Okay, so how many, like on average,
how many dealers out of 100 are overpaying, would you say?
60 to 70% without it.
How much?
We typically see 15 to 25% savings.
Wow.
It's a big number.
And what's an average monthly run
for a dealer nationwide, would you say?
A roof top.
I mean, listen, it'll depend if they're, you know,
a Honda dealer versus a Mercedes dealer, right?
So there's a big difference there.
But, you know, parts and services
where a lot of the transaction happens,
you know, dealers are doing millions of dollars a year, right?
So two, three, four million dollars a year.
Now, there are smaller dealers geographically.
If you're in a rural area,
maybe you're doing 50,000 a month, right?
But typically, this is millions of dollars a year.
And every time we talk to someone, you know,
we talked about, you know, you always see about
people are focused on reducing expenses, right?
This is a top five line item of expense
for a lot of dealerships.
It's one of the most common pushes that we hear
is it is one of the biggest
and unfortunately, everyone thinks it's growing.
The reason that the expense is growing
is the processors and the sales reps
are just padding in and making more money all the time.
You know, I love...
Well, before I ask you this, like, is there any catch
to working with you, right?
Like, you say you take a fee of savings,
which sounds too good to be true, almost.
Is there any catch?
Am I locked in any contract?
Like, every dealer is thinking this right now, right?
We do a free analysis.
So there is no contract for us to do an analysis, okay?
We'll do an analysis and we'll say,
listen, you need us or you don't need us.
If you don't need us, thanks for the opportunity.
You're good. You're one of the lucky ones.
If you need us, yeah, you're going to sign an agreement.
But the agreement is written in English, one page,
almost no legalese because I believe in handshakes.
I don't need to go back and forth with attorneys.
And we do lock someone in for a period of time.
We say we would like to share in the savings for three years.
Not in perpetuity, but for three years.
If you were going to save you a dollar
and you're going to save that every month
for the next three years, at least let us share that.
And then after three years, you could continue if you want
or you could go to a monitoring program.
You could keep the relationship or you could shake our hand
at that point and walk away.
But, you know, there is no contract to have that conversation
or to get a free analysis in due diligence.
Yeah, this is, it's interesting.
It reminds me of like an adjuster, you know, for real estate
or like a warranty rate adjustment.
There's also, actually, there's also a business
that does this for SaaS deals, right?
Like SaaS vendors, tools that you use.
So I, yeah, you know what, I call these businesses,
it's the type of business where you align the interests
of the parties very, very well.
You save, I earn, I like that.
Okay, now, just for context, how much have you saved
or like what numbers can you share about your scale,
like size of dealers you've worked with,
So, you know, I can tell you as far as our company,
over the last number of years, we've now reached
over 300 million in savings for our customers.
And that's across every vertical, right?
So it's not just dealership.
It's like the old commercial visa, it's everywhere.
If you're old enough, you remember that commercial.
It's anyone that accepts credit cards, right?
But, you know, in dealers, we work with, you know,
dealers that have a single location.
And then we work with some of the larger dealers
that have 40, 50, 60 plus locations.
And the large dealers that we work with,
not only do they like our service
because we're saving them money,
but we created technology and dashboards
and reporting and visibility
to help them streamline what's going on, right?
And there's some testimonials on our website about that.
You know, there's a dealer that uses our technology
to streamline and saves hours and hours of reporting.
But, you know, we've grown fairly large at this point.
We treat, though, if you're a single dealer
and listen to this, I don't want you to think
that we don't treat you like someone with 100 dealers, right?
You know, as I grew the business,
it was only mom and pops for the first number of years
and we're almost 20 years old right now.
And then it grew into enterprise level
and billion-dollar clients, right?
We treat the client that's a single dealer
that does a million dollars a year
the same way we're going to treat everyone else.
We leave in, oh, you're bigger, we're going to make more money.
No, everyone needs to save money today.
So we look at everyone not as a number
but actually as a relationship and what we do
and what's the longevity here.
I'll tell you what, Eric, I'll make a deal with you.
I think it'll be in the spirit of what your company does.
Every dealer that calls you after this podcast
will share in the earnings for three years.
That's all.
I mean, listen.
It's all in, right?
Let's go, babe.
I know.
It's just funny because it's like,
no, I told you, I like these businesses
where it just makes sense.
It's cool.
So I want to get back to the nitty-gritty.
So you were mentioning like these hidden fees.
I personally have reviewed these statements,
you know, when I was selling cars
and as we were growing,
it was definitely a glaring expense item
that I paid a lot of attention to.
Candidly, I did not think that,
you know, someone like you existed
and, you know, and no, like,
yes, our VP of finance at the time reviewed this
and I guess we did our best,
but I'm sure we, you know,
there's still meat on the bone there.
What are the hidden fees?
Like, if I'm looking right now at a statement
as I'm listening to this,
like, what's the line items
I should be paying attention to?
Yeah.
Well, I think the funniest one is the discount rate, right?
It's not a discount.
It's actually a fee.
It's kind of funny.
They call it a markup rate.
A markup rate.
But that's really kind of the biggest part in a markup.
But depending on your processor,
you could look for something called a transaction risk fee,
which sounds good.
It sounds like a real fee.
It's completely made up by the processor.
There is a specific processor
that made that fee up and put it into the statement.
And what they basically say is different cards
have different risk and, you know,
it charges more just like Visa MasterCard.
Well, not really true.
I mean, there's a half truth there, right?
The business is either risky or not risky
and for a processor, auto dealers are not low risk.
It doesn't matter to type a card.
Okay.
So we've heard that one.
We actually heard one or two of them saying processor.
There's something called a risk settlement fee.
There's something called a, I'm sorry,
that's two different ones.
It's a risk fee and a settlement funding fee.
Again, they look real.
They look like Visa MasterCard fees.
They're padded fees.
They're 100% nowhere in Visa MasterCard language.
That was a processor's language, right?
So we see things like that.
One of the biggest things that we help with,
and this is not a huge fee,
but most businesses have something called a non-PCI fee.
And this is something I'm just going to kind of give away, right?
A non-PCI fee could be $75 per month per location.
If you have 20, 50, 100 locations,
that fee is because someone didn't answer a survey
that they didn't even actually know they had to answer.
So it is.
Wow.
Right?
So we have groups that pay quite a bit with that.
Well, you're obviously being very generous
with the information and knowledge here,
and I'm sure there's dealers who are right now
either sending this to their CFOs and saying,
you know, please fix.
And then I'm sure there's other dealers
who themselves are right now saying,
I'm going to do this when I get to the dealership
because I'm in my commute.
And so candidly, like, you're sharing this information,
what would you say is, like, your core competency, right?
You've just told me, like, five things that I can save right there.
Is there, like, a special way that you negotiate these
or, like, what is the core competency you bring to the table?
So there's a few things.
One, 20 years where the data means I know what the bottom is.
And I relate this.
It's kind of funny, you see.
I relate this to car sales all the time, right?
So I'm a CEO.
I'm a salesperson by nature.
I am a pretty good negotiator.
But guess what?
When I go to buy cars and I like nice cars, right?
I'm not even really negotiating.
I know, like, they're making money.
I, like, people go, what's tissue or what's cost or what's,
like, there's a million different things and add-backs
and buy-backs and incentives, right?
All these things.
And I raise my hands and I go,
okay, just give me the price, right?
But if I worked at an auto dealer
and I knew what all those things mean
and I knew how much the warranty costs
and the tire and wheel and all these other things, right?
I would be able to negotiate a lot better deal
if I actually worked at an auto dealer when I go buy a car.
Same thing here.
It's the knowledge of how low someone could go, right?
Like, some of the things they just gave you
can, you know, a CFO look at a statement
and find them maybe, right?
They're kind of hidden
and they're not spelled out that way.
They're actually acronyms, right, on the statement.
So you need to know what you're looking for.
But if I know what cost is
or I know that processor A will not get rid of all of it
but will get rid of 70% of it
and processor B will get rid of 50%
and then this processor goes over there.
When we call the processor
or when we coach the CFO or treasurer
or someone to coach the processor
or in what to say to the processor,
we're giving them the secret sauce.
We're giving them the answers to the test
and when a processor gets on the phone
and hears the person on the other end
that has the answers to the test,
they cave, they give in.
So it's not like...
Because they know you know the information.
Right, you know, anyone could call up their processor
and go, hey, can you lower my rate
and the processor is going to go, yeah,
I'll lower it like, you know, five basis points.
And then the other person on the phone is going,
great, I got a lower rate.
This is amazing.
Not realizing there's 50 basis points
sitting on the table, right?
If you know the bottom and it's funny,
people go, well, why do people use you?
You know, they give up a percent of savings.
But you don't understand.
With our knowledge and what we've done,
we will save someone four to six times more
than they could save themselves
just because we have that deep rooted knowledge.
So I think that's the...
You have the data.
Yeah, you have the data.
You know what you're like?
You're like true car for like,
for credit card processing.
In a way, true car introduced a decade or two ago,
invoice pricing, publicly available.
That was the big thing for true car.
That was novel back then.
And that's sort of what I see with you.
You have that data.
You know, like the invoice pricing
for a credit card processor.
So that's how I would, you know, sort of relate that.
By the way, how is this...
Or I would say, how do you not have a ton of competition?
Like, what's the mode?
Is it that you have that data
or you're affected at it or...
You know, there's a few people...
Or maybe you do have a lot of competition.
I just don't know.
It's a couple, right?
There's a couple.
But if you look at the merchant services landscape,
like selling merchant services where you have to switch.
Today, there's a couple of hundred thousand sales reps
selling merchant services.
That's in the traditional sense.
There's less than a thousand, roughly,
selling what we're selling.
And we have over 500 sales reps.
So half of them are out there in the field, right?
The reason that there's not more competition is,
one, not easy to have the knowledge.
And number two, it's easier for someone
to put a credit card terminal in a store,
walk away and earn a piece and not have to do anything.
They put it in, they walk away and they're done.
I fully agree with you.
It's a much unsexier business to do what you're doing.
Correct.
I actually have a team of employees
that actually get the statement every month,
analyze the statement every month, report on it,
put out the savings.
If we see an increase in fees,
we go renegotiate.
It's not like we do it once and it's done.
People go, you know, if you do it once,
why do you have to get paid for three years?
No, every single month we're analyzing and reporting
and negotiating and renegotiating
and constantly working this, right?
The reason we don't have more competition,
it's not easy to do.
Like what we do is easy in concept.
We save your money, we share in savings.
Very, very easy, right?
To understand.
But the mechanisms behind the scenes
of being able to do this month after month after month
for tens of thousands of customers
and then building up the technology
to be able to handle that and scale it,
that's kind of the magic behind what we're doing
and that's why we don't have competition.
This episode is brought to you by Icon Technologies.
Icon Technologies delivers a connected vehicle program
for dealers that maximizes customer lifetime value,
driving sales efficiency and PVR on your front end
while delivering an average of 50 additional ROs
every single month for your service base.
At NADA in Las Vegas,
get a demo at Stan 1763 West
for your chance to roll the dice
and win a Rolls Royce.
Terms and conditions apply.
Plus, mention Car Dealership Guy at NADA when you sign up
and Icon will waive your entire initial installation fee.
Go to IconTechnologies.com.cdg
to see the benefits for yourself
and book your NADA demo
or click the link in the show notes below.
I should let you negotiate my stripe fees
at Car Dealership Guy.
Not sure why we haven't.
I like it.
So, Eric, can you just...
I like to contextualize things like
what is your recent dealer you worked with
or what did you uncover?
What did you find?
What can you share with us?
Listen, some of our larger dealers,
I could say we work with Bremen.
We've helped them quite a bit.
They come to us a lot.
I will tell you Belize up in the Northeast.
Sometimes dealers will come to us and say,
hey, listen, you can negotiate rates
and I'll pay your piece of savings,
but I really hate my processor.
Is there someone that has integration
to like a CDK, right?
That's a big thing right now.
If you're not integrated into CDK
or Reynolds or any of these others
with your credit card processing,
you have extra steps.
So, we helped him find the right people
and negotiate rates
and we were able to really go down that road
and save significant funds, right?
It's significant amounts.
And again, there's a lot of other dealers
out there that we've helped.
I think we are part of quite a few
state associations.
But I will tell you,
and I appreciate you bringing me on the podcast as the CEO,
but Don Giordano,
he's our guy.
He's the face of auto for merchant advocate.
I mean, you know,
and some of your viewers probably have seen him,
known him, seen him at shows.
Very approachable, very likable.
And the best thing about it
is he actually really cares about people.
If I'm a dealer listening right now,
again, I think it feels to me like a no-brainer.
I almost want to title this podcast
like I don't want to say I can guarantee,
but I can almost guarantee you're going to make money
if you invest the 30 minutes listening to this,
which is what dealers listen for, right?
They want to get value.
That's the whole point.
So if I'm a dealer listening right now,
what would you say is the best next step I could take
if I want to see what savings
or just uncovered is opportunity?
They have to send us two to three months
of their merchant statements.
They send us two to three months
of their merchant statements.
And I know we'll get some contact information out there
to all your dealers that are listening
and you send them in to us.
Two, three days later, we'll come back and go.
You qualify for savings or you don't.
All right, so Eric, if someone wants to get in touch with you
to see if they're overpaying or they're at risk,
we will obviously put the link in the show notes below.
Is there any other better way to get in touch with you
and get this assessment?
Yeah, I think the fastest way is click on the link
and it'll have a place to upload two or three months statements.
I mean, obviously we could have a phone call beforehand,
but if you send us two or three months statements
through the link, we have your contact information.
Give us two to three days after you send it.
We'll be back in touch with you
and we'll go through if you qualify for savings
or you don't qualify for savings.
Maybe you have a great deal.
For those dealers that are passing the 3% fee,
that surcharge fee that everyone's talking about,
you still could have savings.
Okay, and I want to touch on this for a second.
We had an account come to us
and they're like, yeah, you can't save us any money.
We're passing the 3%.
At the end of the month, we only get $120 bill.
I think, yeah, great, send me the statement.
It turns out that they were getting billed daily that 3%,
so it looked like a wash,
but when you did the math, it was 3.4%.
So they were billing their customers 3%,
but the processor was billing them 3.4%.
The way it appeared there was no fee
is at the end of the month, you get a bill, it's $150,
and they're going, ah, there's no fee, it's $150
versus, you know, there was 9,000 in the past, right?
They're like, oh, I only paid 150.
It was very, very sneaky, right?
And that's one thing about the processing industry
is there's no regulation.
It's unregulated.
Which is wild to me.
Well, that's it.
It's a wild, wild west, right?
The processor did it, said, okay,
you're going to bill $10,000 in sales for today.
We're going to tack 3% on that,
or you're going to pass 3% to the merchant,
but on that 10,000, we're going to bill you 3.4%.
Wow.
No one caught on.
So on $300,000, the processor was making an extra half a percent,
and the customers were paying the 3%.
So there was like this weird kind of analysis.
So again, you know, if you're listening and you're going,
I don't care, I'm passing the fee,
what are you paying for debit?
Are you passing the fee correctly?
Is someone getting paid in the back end?
I mean, I will tell you, you see,
I had a very, very large dealer group.
I was talking to the CFO,
and you know, we're trying to help them out.
He's like, listen, there's a company out there
that called me and said,
if I move to surcharge,
they're going to make hundreds of thousands of dollars.
They were willing to pay the CFO personally.
A huge commission.
So a lot of people are being offered payments
and not that any dealerships have employees
that would ever do this, right?
But I will tell you, there are employees
that are being offered hundreds of thousands of dollars
in commissions to push a surcharge model.
Incredible.
Eric, this has been incredibly insightful.
So I'm glad you came on and shared this.
I think it's, like I said, very timely right now
with what's just tapping into the zeitgeist of the industry
and what's important.
Any closing thoughts?
I mean, I think you've really just encapsulated it very well,
the risk that dealers bear and just opportunity as well.
Any other closing thoughts, anything we missed?
I think we got it all.
I mean, you know, the whole point is, you know,
whether they contact us or try to do it themselves,
this is a line item that has to be looked at.
I mean, this is something that is not just,
deal with it, we have to pay it.
Don't worry about it or pass the fee
or this is what's happening.
You really need an expert.
And I think that's the biggest thing to drive home is,
you know, we're here to help everyone, right?
You know, that's why I built the business.
Transparency, do the right thing, take care of people.
And I want everyone listening to this to understand
that being that this is a large expense line item,
it is extremely important to look at it.
But you also have to have someone watching it
every single month, whether it's your CFO
or you outsource it to someone like us
or whoever, whatever you do.
The most important thing I could say to the audience is,
rates can change.
Whenever a processor wants to increase rates,
they can do an increase by notifying you
on a statement message that no one understands.
So it's not that you're locked into contracts.
This is something that's flexible,
moves every month and really needs to be audited
and watched, whoever might do it for that organization.
And, you know, I think that's the biggest thing
that I want to get across to people.
Well said. Eric Cohen, merchant advocate.
We will put the link in the show notes below
if any dealer is interested in receiving a free assessment
of what they're paying and if they're overpaying.
We'll make sure that we make it happen.
Eric, thanks so much for coming on. It's been great.
Yeah, thanks for having me. Really appreciate it.
All right. Hope you enjoyed that episode.
Please give the podcast a rating.
Consider subscribing to the show.
And check the show notes for links to what we talked about.
Thanks for tuning in. I'll see you guys next time.
About this episode
Credit card processing fees are a hidden profit leak for car dealerships, often leading to significant overpayments. Eric Cohen, CEO of Merchant Advocate, explains how many dealers are unaware of the negotiable nature of these fees and the common hidden charges that inflate costs. He shares insights on optimizing payment processing setups and discusses practical steps dealers can take to reduce expenses without sacrificing service. The episode is packed with valuable information for dealership operators looking to improve their bottom line.
Original notes
Today I’m joined by Eric Cohen, CEO at Merchant Advocate.
We break down why credit card processing is one of the most overlooked expense lines in dealerships, how 60–70% of stores are overpaying, and which “non-negotiable” fees are actually negotiable.
Eric explains where the hidden charges live, how to audit statements properly, and why transparency matters more than ever in a largely unregulated space. The payoff: real strategies dealers can use to reclaim margin without cutting people or growth.
This episode is brought to you by:
1. Flai Technologies Inc - Your best people know how to turn an opportunity into an appointment—but they can't be everywhere. Flai is an AI communications platform that handles calls, texts, and emails before your team takes care of customers. Every call gets answered. Every lead gets followed up. Appointments get booked. Flai works with some of the largest dealer groups in the US, and some dealers have seen appointments double. They're offering free pilots to CDG listeners till January 31. Book a meeting @ http://useflai.com
2. Ikon Technologies delivers a connected vehicle program for dealers that maximizes Customer Lifetime Value by driving sales efficiency and securing non-cancellable PVR on your front end while delivering an average of 50 additional customer-pay ROs every single month for your service bays. At NADA 2026 in Las Vegas, visit Stand 1763 West to see the benefits for yourself and take your chance to roll the dice to win a Rolls Royce (terms and conditions apply; no purchase necessary). Plus, as an exclusive offer for listeners, mention “Car Dealership Guy” when you sign up at NADA to have your entire initial installation fee waived—book your demo today @ http://ikontechnologies.com/CDG
3. Merchant Advocate - Merchant Advocate saves businesses money on credit card fees WITHOUT switching processors. Find out how they can help your dealership with a FREE analysis. Click on @ http://merchantadvocate.com/cdg for more.
Check out Car Dealership Guy’s stuff:
For dealers:
CDG Circles ➤ https://cdgcircles.com/
Industry job board ➤ http://jobs.dealershipguy.com
Dealership recruiting ➤ http://www.cdgrecruiting.com
Fix your dealership’s social media ➤ http://www.trynomad.co
Request to be a podcast guest ➤ http://www.cdgguest.com
For industry vendors:
Advertise with Car Dealership Guy ➤ http://www.cdgpartner.com
Industry job board ➤ http://jobs.dealershipguy.com
Request to be a podcast guest ➤ http://www.cdgguest.com
Topics:
00:14 What are the top dealer concerns today?
04:43 How do credit card processing fees work?
07:44 What are the best optimization strategies?
14:03 What are the most common hidden fees?
16:56 What is the Merchant Advocate's unique approach?
21:40 What is your most impactful client success story?
Car Dealership Guy Socials:
X ➤ x.com/GuyDealership
Instagram ➤ instagram.com/cardealershipguy/
TikTok ➤ tiktok.com/@guydealership
LinkedIn ➤ linkedin.com/company/cardealershipguy
Threads ➤ threads.net/@cardealershipguy
Facebook ➤ facebook.com/profile.php?id=100077402857683
Everything else ➤ dealershipguy.com
Car Dealership Guy Podcast
Car Dealership Guy
0:00
31:13