Even though AppStar Financial has earned an A+ rating with the Better Business Bureau, a quick Google search will reveal dozens of sites with accusations of an AppStar Financial scam. Clearly, there's a disconnect between the results of the BBB's diligent research and the accusations peppered all over the Internet. How did this come to be?
To understand these many complaints, it is necessary to first understand the nature of AppStar Financial's industry. Just like its competitors, AppStar Financial is in business to make money by offering its customers great deals on its financial services. In other words, AppStar makes money by giving discounts to other companies, saving them money on credit and debit card processing.
From AppStar Financial's perspective, this business model has one serious downside: Profit margins on each client are quite low. Thus, in order to make enough money to stay in business, AppStar needs to make as many sales as possible. What the company loses on per-client profits it makes up in volume.
Clearly, these issues are not unique to AppStar Financial. The credit and debit card processing industry is almost entirely growth-based because every company in that industry faces the same challenges. New businesses open every day, and companies like AppStar line up to offer their financial services. The entire business depends on servicing as many clients as possible as quickly and efficiently as possible.
Herein lies the source of the complaints: Because AppStar deals with so many clients, some errors inevitably slip through the cracks. Mistakes are a fact of life in every high-volume industry.
I have some insight into this situation thanks to my prior work experience. At the merchant processor where I used to work, we made almost two hundred thousand calls every month to make appointments for our sales representatives. In the process of connecting with business owners to set up meetings with our representatives, we inevitably spoke with managers who did not like what we were offering or were just having bad days. This wasn't the result of anything we did! We were simply reaching out to send representatives to meet with these businesses in person and, hopefully, find ways to save them money on their financial services.
Compounding these issues was the very nature of our business. In order to become our customers, these businesses had to leave their current merchant processors behind. In other words, every gain for us was a loss for another company. When one business switches to another provider, the old provider understandably becomes upset. Oftentimes, merchant processors are even willing to lower their rates to keep a long-term customer, which leads to even more issues.
From AppStar's perspective, problems can arise at any point in this transaction. First, AppStar employees are making cold calls to set up sales appointments. People tend to dislike cold calls, and business owners are no exception. In particular, many small business owners list their personal cell phones on databases or lists that companies like AppStar purchase. When they take AppStar's calls, many of these owners complain that they are on do not call lists. The fact of the matter is that there are no do not call lists for businesses! Given that cold calls are somewhat annoying, a little frustration with AppStar is understandable. However, a few business owners have turned that frustration into unfair accusations of AppStar Financial rip-offs and scams.
On the other hand, when the process works, it works very well. Appointments are made, sales representatives follow through, clients hear about great deals on financial services and everyone is happy.
Once the representative gets on-site, each meeting begins with a review of the potential client's current credit and debit card processing terms. If money can be saved, the AppStar representative offers a lower rate to the business owner for making a switch. If the client accepts, he signs a contract; AppStar then begins the process of switching over to a new processor.
Unfortunately, difficulties often arise in the process of making the switch. There may be cancellation fees or other money that the business owner owes to his previous processor. Of course, the onus is on the client to be aware of those cancellation costs, but many clients still accuse AppStar of withholding this information. It's an absurd accusation, since AppStar can't possibly know the specific terms another company offered to a particular business, but losing money can make typically level-headed businessmen become irrational.
Moreover, outgoing providers tend to offer big discounts to keep their clients' business. This infuriates some business owners to no end: Where were those discounts before? The situation is quite similar to what happens when a customer breaks a cell phone contract. Most carriers charge cancellation fees and offer discounts to hold on to customers. Again, these issues are not unique to AppStar; they come up at least occasionally for every volume-based company. It is unfair to call AppStar Financial a rip-off just because some clients feel jilted.
Another common complaint raised against AppStar is that clients do not know what they are getting into when they sign their contracts. Yet again, every sales-based company in the world deals with this issue. It's true that some sales representatives are overly aggressive, and it's true that they exaggerate some terms in order to help close a deal. Ultimately, however, after a business owner signs a new contract he has no one to blame but himself. Moreover, AppStar representatives always give potential clients an opportunity to review their contracts before signing, and even after signing, any contract can be terminated as long as money has not yet changed hands.
Deliberately withholding information from a potential client is career suicide for a sales representative. Sure, AppStar representatives may sometimes promise a little more than their company can offer, but that is simply a fact of life in sales. Everything has to be put in black and white terms; otherwise, the deal won't be closed. Again, clients who failed to review the terms of their agreements before they signed their contracts have no one to blame but themselves. They certainly should not blame AppStar Financial.
When I worked for one of AppStar's competitors, we lost a fair number of deals to them. What really hurt, though, was losing sales representatives to them. AppStar Financial recruits heavily and gives its sales representatives plenty of support. Apparently, their representatives don't even have to make their own cold calls; they simply get their appointments and show up at the appointed time. Sales representatives who are willing to go to one or two premade appointments daily and help business owners save some money do very well. They build their own business by getting referrals, which makes things easier for everyone. That is a mark of a successful, well-run business, not a scam.
I believe that AppStar Financial, like most companies in the credit and debit card processing industry, works hard to get the best possible deal for as many clients as possible. Because AppStar deals with so many clients and is constantly focuses on making more sales, some issues are to be expected. Most disgruntled clients, though, have no one to blame but themselves. AppStar Financial handles thousands of accounts in a highly competitive industry. The challenges that come with being in that industry do not make AppStar a scam.
Indeed, AppStar conducts its business with a remarkable degree of transparency. They even list their phone number right on their website; my former employer did not. It's no wonder that AppStar Financial serves thousands of clients and has a well-deserved A+ rating from the Better Business Bureau.
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