What is my average ticket?
The term average ticket refers to the average amount or dollar volume of a sale. If you have a high average ticket you should do your best to find the lowest discount rate possible. Work with providers to have them lower the discount rate on your merchant account even if they must raise the transaction fee to compensate. If your business has a smaller average ticket you should to work to lower the transaction fee, even it if means you will need to sacrifice a higher discount rate. The basis for this rule is simple mathematics. The following example illustrates both scenarios and shows how rates and fees can be manipulated to decrease processing charges substantially.

Example #1:
The following business has an average ticket of $500. While reviewing their quotes the business owner was faced with a number of options. Although each quote was very competitive in different areas it was obvious which was the better fit for this business's high average ticket.

Merchant Account A:
Discount Rate: 1.90%
Transaction Fee: $0.05
Average Charge Per Transaction: $9.55 (500 X 0.0190 + 0.05 = 9.55)

Merchant Account B:
Discount Rate: 1.59%
Transaction Fee: $0.35
Average Charge Per Transaction: $8.30 (500 X 0.0159 + 0.35 = 8.30)

Merchant account B saves the business $1.25 per transaction because the percentage charged over the high $500 average ticket carries more weight than the flat per transaction fee. Now let's use the same example for a business with an average ticket of $10 and you'll see that the opposite is true.

Merchant Account A:
Discount Rate: 1.90%
Transaction Fee: $0.05
Average Charge Per Transaction: $0.24 (10 X 0.0190 + 0.05 = 0.24)

Merchant Account B:
Discount Rate: 1.59%
Transaction Fee: $0.35
Average Charge Per Transaction: $0.51 (500 X 0.0159 + 0.35 = 0.509)

The percentage discount charge over a $10 average ticket is hardly noticeable. it's the per transaction fee that carries the most weight for a business with a lower average ticket.