It’s smart business to offer electrolysis hair removal at your salon or spa. As the only FDA-endorsed hair removal method, electrolysis has become increasingly popular. Market research predicts a 17% growth rate through 2025. By providing electrolysis treatment to clients, you can not only profit from this multi-billion market, but you can also help clients become more comfortable, confident, and healthy. Electrolysis is a permanent hair removal solution that enables your clients to finally get rid of unwanted hair growth. Of course, to ensure your business can continue electrolysis treatments well into the future, you must take care of finances. That means analyzing every unnecessary expense. For instance, have you looked at your electrolysis credit card processing fees? Sure, you may only pay 3-4% per transaction, but those fees cost your business more than you think. By getting the cheapest credit card processing possible, you can increase your hair removal clinic profits by 10% or more. In this article, we’ll detail why you should pay attention to credit card processing fees, and teach you how to take home 100% of your electrolysis revenue.
Why you should care about electrolysis credit card processing fees
You’ve made quite the investment to become an electrologist. As cosmetology experts note, you have to undergo training and get certification in most states to become an electrology professional. This can take months of your time and typically costs more than $10,000.For example, in Michigan, you must do 400 hours of an electrology education program or six-month apprenticeship. Then you must pass an exam to get certification. In addition to education and training requirements, you have to spend a lot of money to start your own medical spa or electrolysis hair removal clinic. When you include equipment, legal fees, office supplies, and more, startup costs often exceed $100,000. That doesn’t even include ongoing expenses, such as technician salaries, marketing, insurance, and rent. Simply put, you’ve invested a lot of time and money to become an entrepreneur in the hair removal industry. Don’t reduce your chances of success by not paying attention to your payment processing system. Take steps to get the cheapest credit card processing you can. As research finds, you may lose more than 3% of your electrolysis revenue to fees, even with the best credit card processing apps.
Source: ValuePenguin
You may still think: It’s only about 3%. What’s the big deal? Avoid that line of thought. Because these electrolysis credit card processing fees decrease your profits more than you think.
How much more can you make from electrolysis with free credit card processing
So you can understand what you stand to gain, let’s go through an example. First, remember that most insurance doesn’t cover electrolysis hair removal, as it’s an elective treatment. So your clients will pay out-of-pocket. As consumer surveys find, a good portion of your clients will pay with a credit card (34%).
Source: NerdWallet
While a little more than one-in-three of your clients will pay for electrolysis treatment with a credit card, chances are your revenue from credit card transactions will be a bit higher. After all, credit cards account for more than 55% of the total value of card payments, according to Federal Reserve research. Research indicates clients are more likely to pay for higher-value purchases with a credit card. And electrolysis is a high-value transaction, with the average cost often exceeding $100 per session. Most patients will also sign up for multiple treatments, making the final price much higher. For the purpose of this example, let’s say 50% of your electrolysis revenue comes from credit card transactions. Let’s also say the average customer spends $150 per session, and you do 2,000 electrolysis treatments per year. That means you generate $300,000 per year from electrolysis treatments. Now, consider the following:
- After all expenses, including labor, you achieve a net margin of 20% on electrolysis treatments. That means your medical spa or hair removal clinic earns $60,000 per year from the treatments. That’s quite solid. But you could earn a lot more.
- 50% of your revenue comes from credit card transactions, or $150,000 per year. You pay a total fee of 4% on that revenue. That equals $6,000 per year in electrolysis credit card processing fees.
- If you eliminate that $6,000 in electrolysis credit card processing fees, your profits would jump from $60,000 to $66,000. That’s a salary increase of 10% for you!
As you can see, it pays to pay attention to credit card processing fees. Because you can—and should—take home more of your electrolysis revenue. The good news is you have solutions. Follow the two steps below!
Step 1: Find the best credit card processing for electrolysis and hair removal clinics
As an electrology professional, you’re busy. But as we’ve shown, you can benefit from doing your research and shopping for the best credit card processing. Here’s what you need to know:
- The payment processing industry lacks regulations. Merchant service providers (MSPs) can charge high markups and implement complex fee structures. This is how they make more money. And MSPs do this because they can.
So, at your electrolysis and hair removal salon, educate yourself about credit card processing. When analyzing third-party credit card processors, ask about:
- Total fees: This is the average total of all the payment processing fees, and includes the following:
- Interchange fee: This is collected by the card bank (not negotiable).
- Assessment fee: This is collected by the card brand (not negotiable).
- Payment processor markup: This is how the MSP makes money, and typically comes in the form of subscription fees, per-transaction fees, hardware costs, etc (can be negotiated).
- Cancellation and refund charges: If a transaction is canceled, will the MSP refund fees? If you have to refund an electrolysis client, will the MSP waive some of the fees?
- Rate increases: These shouldn’t exist, as fees are commonly a percentage per transaction. Check for them.
Know you can negotiate certain fees too, such as the payment processor markups. Many business owners have been known to knock 5-10% of the markup fees. Leverage your position here. To summarize, read through all the fine print when choosing an MSP for your medical spa or electrolysis salon. Opt for the best yet cheapest credit card processing possible. You want a quality payment processor that doesn’t overcharge you. They exist, but you have to do the legwork to find them. Once you do that, you’ll be in a position to take home 100% of your electrolysis revenue. Just follow step two!
Step 2: Establish a cash discount program at your electrolysis and hair removal salon
As the name suggests, a cash discount program gives your electrolysis clients a discount for paying in cash. At NadaPayments, that discount is 3.95%. Don’t worry—if your electrolysis clients still want the convenience of swiping the credit card, they can do that. But they’ll pay a markup to offset credit card processing fees. A cash discount program automatically ensures free credit card processing. That’s because you take home 100% of your electrolysis revenue on every transaction, regardless of if cash or credit is used. In this sense, a cash discount program benefits both you and your electrolysis clients. It’s also 100% legal and compliant.Interested to learn more? At NadaPayments, we can help your electrolysis clinic implement a cash discount program. Call us to learn how you can eliminate credit card processing fees. Our phone lines are always open at +1 (929) 293-1800. Or click the link below to message us.
