We Turned This Client Away in 2018. In 2022 They Came Back to $78,000.

In 2018 we audited this company, found modest savings, and told them not to hire us. The numbers did not justify the fee and saying so was the honest answer. In 2022 they called back. Nothing dramatic had happened in the intervening four years. That is exactly the problem.

Pricing driftOngoing monitoringPer transaction pricingEntertainment

$78,193

Annual savings on the second audit

4 years

Of undisturbed drift

31 bp

Discount rate by 2022

$25,020

In per transaction fees alone

The business

A small cinema chain processing roughly $10.4 million a year, plus a smaller American Express volume, on an industry specific point of sale platform.

The first audit, 2018

We ran the audit and found savings that were real but modest. Against our implementation fee and monthly monitoring cost, the return did not justify the engagement. We told them so, and they stayed where they were.

Why that answer matters

In our own engagements we find savings on roughly 99 percent of the audits we run. Not all of them find enough savings to be worth hiring anybody. A firm that never says no to a prospect is not measuring anything, it is selling.

What happened next

Nothing. No adverse event, no bad faith moment, no renegotiation gone wrong. Four years of ordinary business, during which the account was left alone.

By 2022 the discount rate had reached 31 basis points. Per transaction fees were running at $0.10 across roughly a quarter of a million transactions a year. Two charges had appeared that were not there before, and PCI charges had accumulated.

What the second audit found

Finding	Annual value
Discount rate, 31 basis points to 3.75	$28,362
Per transaction fees, $0.10 eliminated as a separate charge	$25,020
A Risk Fee at $834 per month	$10,008
A Network Process Access charge at $753 a month	$9,036
PCI compliance and non compliance charges	$4,557
Interchange rebates retained	$1,210
Total	$78,193

Interchange optimization contributed nothing. This is a card present retail environment with consumer cards and small tickets, so there was no Level 2 or Level 3 opportunity to recover. Every dollar found was markup, per transaction pricing and invented fees.

How drift works

No single change in those four years would have been worth investigating on its own. A few basis points here. A ten cent authorization fee that was always there and simply never came down as volume grew. A monthly charge with an unremarkable name appearing on a statement that already had a dozen line items.

The mechanism is not deception. It is inertia, working in one direction only. Rates do not drift downward on their own, per transaction fees do not fall as volume rises unless somebody asks, and no fee has ever removed itself.

$25,020

Annual cost of a $0.10 authorization fee on a high count, low ticket business. Ten cents is the easiest number on a statement to stop seeing.

Industry context

Card processing is not a static purchase. Visa and Mastercard publish interchange updates twice a year. Processors adjust portfolio margins. Fees are introduced. And the merchant’s own volume, average ticket and card mix move, which changes what the right arrangement looks like even when nothing on the processor’s side changes at all.

Almost every other major cost line in a business has a natural review trigger. Insurance renews. Leases expire. Freight goes to bid. Card processing has none. Month to month agreements and evergreen terms mean nothing ever forces the question, and the absence of a renewal date is treated as the absence of a decision.

The industry is unregulated, and nothing in it will prompt a merchant to look. Drift is not a failure of the processor. It is the default state.

Why this case matters

A processing audit is not a procurement event. Companies treat it like one, the way they treat an insurance review or a freight bid: a project with a start and an end, filed once complete.

Card processing does not hold still afterwards. The pricing environment changes, the card networks publish new rates twice a year, processors adjust margins, and the volume and mix inside your own business shift. An account that was correct in 2018 was leaking $78,193 a year by 2022 without anybody doing anything wrong.

That is the argument for monitoring rather than auditing, and this client is the proof, because we are the ones who told them to walk away the first time.

How to check this on your own statement

1. Compare your current statement against one from three years ago

Same month, side by side. Look at the discount rate, the per transaction charges and the list of monthly fees. Most merchants have not done this once, and it is the fastest diagnostic available.

2. Recalculate per transaction fees against today’s volume

A ten cent authorization fee that was negotiated when you processed 50,000 transactions a year is a very different charge at 250,000. Per item pricing rarely falls as volume grows unless somebody asks.

3. Count line items that did not exist before

New monthly charges appear without announcement. Any line on today’s statement that is absent from the older one deserves a specific question about what service it corresponds to.

4. Recalculate your effective rate annually at minimum

Total fees divided by total volume. Track it as a single number year over year. Drift is invisible line by line and obvious in that series.

Questions we get about this

You really told a prospect not to hire you?

Yes, and it is not unusual. We find savings on roughly 99 percent of the audits we run, but savings and a worthwhile engagement are different tests. When the second test fails we say so, because the alternative is charging a client more than we save them.

How often should processing be reviewed?

Reviewing is the wrong frame. Monitoring is monthly, because that is the cadence at which statements arrive and changes appear. A review is a snapshot of a number that will have moved by the time you act on it.

Nothing has changed at our company. Are we still exposed?

This client’s business was stable for the entire four years. That is what makes the case useful. The drift did not require anything to happen at the merchant, and it will not require anything to happen at yours.