n my 28 years of experience in the check services world, it never has ceased to amaze me that check companies seem to spend more time signing accounts than trying to keep them. Unfortunately, trying to keep them generally means that the check company should have at least a bare scintilla of knowledge about managing risk. Therein lies the dilemma: The majority of check firms do not have the risk-management systems in place to keep those hard-won accounts as happy campers.

More likely is the scenario that, to simplistically counter rising losses,

1. the merchant's rate is increased or

2. the merchant's limit is decreased or

3. you guessed it, both of the above.

Moreover, if the deal is not priced right to begin with, as a loss leader in the interest of capturing the credit card volume, then, yes, you guessed it - the deal will go south for the winter.

If you treat the process as simply that of a numbers game, then I suppose you shouldn't care if some deals go away as long as some stay. That's hardly the stuff of champions but, what the heck, if the batting average is OK, who wants to maximize income anyway?

On the other hand, if you feel inclined to maximize the value creation of your hard-earned portfolio (check and card), and who doesn't, then take the time to do business with those firms that don't take the easy way out by pulling the trigger to raise rates as if it is a foregone conclusion.

How often have you lost a credit card deal simply because the check company took a knife to your account, as if it was taking a shot from point-blank range with a gleam in its eye?

With a book of more than 5,500 locations, we have raised rates on only 28 merchants in our six-year history. Can you imagine what your income stream would be like if half of your customer attrition was eliminated?

It appears to me that not letting the bathtub empty out as fast as it fills is a far easier sales-management approach than grinding out lowball rates with inferior risk-management tools. Where would the card industry be without tools to reduce exposure to merchant and consumer fraud?

If you have the tools to stem losses on the front end, as we and a few others do with sophisticated back-end risk-management systems, then analyzing risk patterns and surgically exorcising transactions emulating fraud is the only way to keep customer prices competitive and give the check service provider the capacity or even the luxury of paying claims that it might otherwise not consider doing for a New York second.

Unfortunately, customer satisfaction and customer attrition are not entirely a function of price, so those issues remain for another day. But, for the moment, you tell me what's less costly - capturing a new customer or keeping an existing one.

Name the reasons you lose an existing check deal from your portfolio:

1. The check provider rejects too many claims.

2. The check provider rejects only a few claims but for the most trivial of reasons.

3. The check provider generally provides customer "disservice" regardless of whether it is during normal business hours or all day long.

4. The check provider creates an excessive percentage of "please call" authorization requests.

5. The check provider declines an excessive percentage of authorization requests.

6. The check provider takes far too long with far too many meetings with far too many players to reach far too few decisions (good or bad), either on pressing competitive repricing situations or in resolution of rejected claims disputes.

7. The check service gives you a lowball rate that cannot possibly stand the test of time, resulting in rejected claims to maintain profitability.

8. Neither you nor your customer nor your customer's customer can reach a "live" customer service representative; the service provider uses an audio response system as a cost-saving measure ... and the beat goes on ...

Actually, I think I've hit you up with a "sky is falling" worst-case scenario. Take heart!

While some check companies behave that way in varying degrees, there are indeed winners out there, some specializing with their marketing prowess, some showing their expertise in supporting the spectrum of terminal platforms, some demonstrating risk-management expertise, while others may offer a broad range of ancillary products and services.

The final result: In no way are all check companies created equal!

If check service providers had the operating philosophy that profitability in the long run could be considered quite acceptable if all that is earned is $1 per month on a book of a million accounts, then ALL parties (merchant, salesperson and service provider) could find an equilibrium satisfaction level.

But, understanding that signing a million accounts is likely a pipedream, you therefore need to find those types of service providers who believe that it is more important to:

1. provide superior customer service at a competitive price

2. pay the vast majority of claims submitted at the "NORMAL" book rate without adding fee surcharges to the base discount rate

3. despise merchant attrition with a passion

4. NOT attempt to be all things to all people all the time because that is a flawed strategy resulting in failing at many things with many customers much of the time

5. not be worried about the margin percentage as much as the real dollars involved so as to disassociate themselves from GREED.

All check companies are not alike. How active is management in the day-to-day operations of the business? What experience do they have in successfully growing and managing a risk-management enterprise?

Do they have a pulse on how their team is treating you and your customers? Do they have 24-hour customer service and voice-authorization support? How fast is their decision-making process when you need it most?

Also, remember that the single biggest amount of horsepower that can positively affect your customer comes from really serious risk-management tools in the hands of those with experience. And I am not alluding to simplistic controls on numbers and dollars of checks allowed in varying time periods.

As a payment vehicle, checks continue to defy the evolutionary life cycle. Their resilience and continued growth are clear indicators that they are not going away anytime soon. In fact, the SafeCheck and Visa POS programs recognize that very subject!

Do your homework to find the service provider that maximizes your income stream for the long haul - short-term thinking creates short-term gain and short-term customers.

Alienating customers who create the basis for your referral and lead-generating engine is not the name of the game. Do yourself a hard-earned favor and tear that page out of your playbook.

Lin Fellerman is founder, President and CEO of San Diego-based Secure Payment Systems, a national provider of electronic check and gift card processing services. Before founding SPS in 1996, Lin was a 20-year employee and 10-year President of Telecredit/Equifax Check Services (now Certegy Check Services). To learn more about SPS, visit www.securepaymentsystems.com or e-mail Lin at lfellerman@securepaymentsystems.com