The Credit Card Processing Transparency Problem
Why tobacco POS companies hide their true costs – and what it means for your bottom line
We’re tobacco retailers. We’ve been running cigar and smoke shops for over a decade. And there’s something that drives us absolutely crazy about the POS industry:
Nobody publishes their real credit card processing rates.
Go to any tobacco POS website. You’ll see “contact for quote” or “custom pricing” or nothing at all. Meanwhile, credit card processing fees are often the largest ongoing cost of running a POS system – way more than software fees.
So why hide it?
Why POS Companies Hide Their Rates
1. They Make Money from Processing Margins
Many tobacco POS companies are backed by venture capital or investment firms. They need recurring revenue to satisfy investors. Credit card processing margins are a goldmine – you process $50k/month at 2.5% instead of 2%, they pocket an extra $250/month. Multiply that by hundreds of stores, and you see why they hide the rates.
2. Card-Not-Present Rate Markups
Here’s the dirty secret: most POS companies charge 3-4% for phone orders and online sales even though their actual cost is barely higher than in-store transactions.
You take a $200 phone order for cigars? They’re charging you $8 in fees (4%) when the actual processing cost is closer to $4 (2%). That extra $4 goes straight to their pocket. Do that 50 times a month, and they’re making an extra $200 off you.
3. Avoiding Price Comparison
If nobody publishes their rates, you can’t easily compare. Sales reps can quote custom pricing that sounds good in isolation, but you have no way to know if you’re getting ripped off.
What This Costs You
Example: $50k/month tobacco shop
$900/month
$1,125/month
$200/month
$350/month
Why TORO Does It Differently
We’re tobacco retailers first, software vendors second. We built TORO because generic POS systems didn’t work for our own stores. And we priced it the way we wish other companies priced theirs: transparently.
TORO’s Published Rates
We don’t make money from processing margins. We’re not backed by investors demanding recurring revenue growth. We make money from software fees, and we want you to succeed so you stay with us for decades.
Our Transparency Commitment
We publish comparison pages for TORO vs our competitors. When competitors don’t publish their rates (which is most of them), we estimate based on:
- Industry averages from tobacco-specific systems
- Reported rates from current users (when available)
- Standard processor margins for similar setups
If we get your rates wrong, tell us. Email thrive@torocigarpos.com and we’ll update our comparison page immediately. We’re not trying to trash competitors – we’re retailers who believe you deserve to know real costs before signing a contract.
To our competitors: publish your rates and we’ll happily link to them. Transparency benefits everyone except companies hiding markups.
The Bottom Line
Before you sign with any tobacco POS system, ask these questions:
- What is your exact in-store processing rate? Not “competitive” or “as low as” – the actual rate.
- What is your card-not-present rate for phone orders? If it’s higher than in-store, ask why.
- What is your online e-commerce rate? Again, if it’s higher, ask why.
- Do you make money from processing margins? Are they incentivized to increase your costs?
- Who owns your company? Retailers or investors?
If they won’t answer clearly, that tells you everything you need to know.
Read Our Honest Comparisons
We’ve published detailed comparisons showing real costs and transparent pricing:
- TORO vs CigarPOS – Retailer-owned vs VC-backed
- TORO vs Square – Account shutdown risk
- TORO vs Clover – Tobacco account terminations
- Full Pricing Showdown – Real 3-year costs
See Transparent Pricing in Action
No sales games. No hidden fees. Just honest pricing from fellow tobacco retailers.