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• Before Merchant Rates, Negotiate Definitions First

  • Merchant Rates
  • Vantage Card

  November 23, 2008

  Time and again we see a complex payments industry being made more confusing for merchants accepting credit and debit cards.  Examine the following examples.

  As a consumer it is better not to get trapped in a long-term contracts and cancellation penalties.  A sales rep may tell you they don't have an "early termination fee" and may be technically right because the company they work for has changed the definition and called it a "de-conversion fee".   The contract states that price changes can be made with 30 days prior written notice, yet if you terminate the agreement within the first 3 years following the date of your execution of the agreement, "you agree to pay de-conversion fees of an amount equal to" the transaction fees incurred by you during the calendar month … more

• Don’t Overlook Merchant Rate Savings from Cardholder Returns

  • Merchant Rates
  • Vantage Card

  November 09, 2008

  Does your business provide a generous return policy?  If you do, one way to lower your bottom line costs of accepting credit and debit card payments is to look at your costs to process cardholder credits.

  When your customer pays by card, merchants pay a discount rate to process the sale transaction.  For example, if during the month, you make $1,000 in sales that ultimately result in the cardholder making a return and you issue offsetting credits for $1,000, what has it cost you?  Assuming a 2% discount rate in our example, that’s $20 in fees. 

  From our daily analysis of merchant statements, the most common thing we see is that merchants pay for processing the sales and on cardholder credits no discount rate is applied.  This is the case above; the … more

by Ty Hardison

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