Offer teeth whitening at your dental clinic?You’ve made a good choice. Because this a solid market. After all, 99.2% of people think a good smile is an important personal asset. And the teeth whitening market should enjoy steady growth of near 5% annually through 2024, according to market research. At your dental office, teeth whitening can boost your revenue. That’s great, because you probably have a lot of expenses. As Bank of America data shows, you may have spent as much as $500,000 to start your dental practice. You also potentially have student loans (dental students graduate with an average of $285,000 in debt).So, you certainly want to capitalize on that extra revenue as much as you can. That begins with not losing money to unnecessary expenses, such as credit card processing fees. But how can you do that? And does paying 3% per transaction really matter that much? The short answer is: You can eliminate credit card processing fees at your dental clinic. And yes, it does matter. Because taking home 100% of your revenue from teeth whitening could boost your profits by double digits. This article details what you must know about credit card processing and how you can get cheap credit card processing.
First, you have to consider average credit card processing fees with each network. Credit card networks charge anywhere from 1.43% to 3.5% per transaction.
Now, you may think it’s as simple as paying a set percentage for each teeth whitening payment. Not so fast. If you talked with other dentists who run their own practice, you’d probably discover a more complex situation. Not only can exact credit card processing fees vary depending on your merchant service provider (MSP), but also many MSPs have multi-tiered plans, complicated fee structures, and various surcharges. Fees also vary with different types of payment. For instance, with popular MSPs, you’ll get pricing transparency and competitive rates. However, you’ll also pay a monthly fee and higher rates for certain types of payment. To make money, your MSP will also charge a markup in some way, such as through software subscriptions or monthly fees. This can easily push credit card fees for your teeth whitening services past 3.5%.Why do MSPs do this? The honest answer is because they can. They know dentists are extremely busy, and may overlook credit card processing fees. Don’t do this—because it’s costing you lots of money!While you can’t control what MSPs charge, you can control who you use as your credit card processor. Don’t let your MSP bite off a big chunk of your profits from teeth whitening. Take time to find good yet cheap credit card processing.
Teeth whitening costs an average of $650, according to Bankrate. Teeth whitening can exceed $1,000 in certain cases. Given that this is a high-value transaction, your clients are more likely to pay with a credit card. As a consumer study from the Federal Reserve notes, “as transaction values increase, there is increased use of debit and credit cards.”Also, since teeth whitening is considered cosmetic treatment, it’s typically not covered by dental insurance. That means your patients must make an out-of-pocket payment. Chances are they won’t pay you $600 in cash. Instead, they’ll write a check or swipe the credit card.
For purchases exceeding $100, like teeth whitening, the credit card is just as likely to be chosen as check or debit, and more than twice as likely as cash to be used.
Considering the data, it’s reasonable to assume 30-40% of your teeth whitening revenue could come from credit card transactions. That leaves 30-40% of your revenue subject to credit card processing fees.
Consider this example: You take care of 3 teeth whitening patients per day, bringing in $2,000 in revenue each day. You offer teeth whitening 320 days per year. That means teeth whitening brings in $640,000 in annual revenue for your dental clinic. After all expenses, your net margin on that revenue is 15%. That means you earn $96,000 in income from teeth whitening, which is solid. But you can make a lot more with cheap credit card processing. Let’s break it down:
Clearly, it pays to pay attention to credit card processing fees. Your bottom line is on the line. And you want it to be much higher, right?
You don’t have to pay credit card processing fees each time you do a teeth whitening treatment. You can greatly reduce and even eliminate the cost altogether. First, make sure to partner with an MSP that offers cheap credit card processing. Do your research and align with those that provide the service you need at the lowest possible price.Know you can negotiate certain fees with your MSP. While you can’t haggle about the interchange fee (paid to the card bank) or the assessment fee (paid to the card brand), you can negotiate the credit card processor markup. For teeth whitening transactions, your dental office may be able to negotiate 5-10% off the processor markup.Second, implement a cash discount program—the way you can take home 100% of your teeth whitening revenue. As the name suggests, a cash discount program involves giving discounts to patients who pay in cash. Now, don’t worry—your teeth whitening clients can still pay with a credit card. But with a cash discount program, your clients have the option to choose the most convenient and affordable payment method. They can pay with cash and get a lower price, or use a credit card and pay a markup fee. That way, you can offset credit card processing fees. A cash discount program gives you the best of both worlds. You eliminate the impact of credit card processing fees to your bottom line. And your teeth whitening clients can enjoy a discount by paying in cash. Want to learn more? At NadaPayments, we can set up a cash discount program for your dental office. Contact us at +1 (929) 293-1800 or click the link below.