THE PROBLEM
In 2017, the Utah Jazz partnered with a prominent ticketing provider and their payment processor. Within months of the conversion, Audit Advantage began alerting the Jazz of rising and excessive payment processing fees. In 2023, the team’s finance department discovered that the processor intended to retroactively bill over $95,000 in unbilled excessive markups due to an administrative oversight.
AUDIT ADVANTAGE TAKES ACTION
After identifying the inefficiencies in the Utah Jazz’s processing program, Audit Advantage began engaging with the processor and advocating for reduced fees. The Utah Jazz also asked Audit Advantage to provide expert counsel on the processors efforts to collect unbilled fees. Audit Advantage’s approach included the following items:
- Data Collection and Analysis: Audit Advantage compiled and aggregated several months of the Jazz's credit card processing statements. They meticulously analyzed each statement, identifying patterns of overcharges and excessive fees, including a comparison to the Jazz’s previous program.
- Benchmarking: Audit Advantage compared the Jazz's fees against industry standards and a vast archive of similar-sized organizations, highlighting discrepancies and excessive markups.
- Disputed Efforts to Collect Retroactive Charges: Audit Advantage thoroughly reviewed the Jazz’s payment processing agreement and identified clauses that absolved the Jazz from paying unbilled processor markup fees. Audit Advantage emphasized these items during subsequent correspondence with the processor.
- Negotiation: Since the beginning of their partnership, Audit Advantage has represented the Utah Jazz in negotiations with their credit card processor, advocating for highly competitive pricing and favorable terms. Audit Advantage also actively contested retroactive charges and excessive markups, backing their case with detailed evidence and industry benchmarks.
- Fee Reduction Strategy: Audit Advantage proposed a new fee strategy, which would replace the existing flat-rate structure, ensuring transparency and fairness. They also provided the Jazz with recommendations to avoid future overcharges, including consistent monthly audits, recurring fee analysis and contract adjustments.
THE OUTCOME
Audit Advantage’s efforts led to several positive outcomes for the Utah Jazz:
- Fee Reductions: The credit card processor agreed to a restructured pricing strategy that yielded substantial reductions in processor markup. Additionally, they significantly reduced the retroactive charges, acknowledging their error and oversight.
- Ongoing Savings: With the new fee structure in place, the Utah Jazz saw a significant reduction in their monthly credit card processing costs, resulting in over $240,000 in annual savings.
- Improved Financial Oversight: The Jazz continue to participate in Audit Advantage’s ongoing program analysis and monthly monitoring program, ensuring long-term financial health and protection against future discrepancies.
- Strengthened Relationship: The successful negotiation and resolution improved the relationship between the Utah Jazz and their credit card processor, fostering better communication and transparency.
CONCLUSION
The partnership between the Utah Jazz and Audit Advantage exemplifies the importance of vigilant financial oversight and the value of expert consultation in managing credit card processing fees. Through meticulous analysis, strategic negotiation, and proactive recommendations, Audit Advantage helped the Utah Jazz avoid excessive fees and secure a more favorable financial position. This case underscores the critical role of specialized audit firms in safeguarding businesses from financial overcharges and ensuring sustainable financial practices.
