Twelve Hidden Fees to Avoid
No two service providers are alike. Before you sign a contract, always ask for full fee disclosure and a full explanation of all their fees. They can’t do much with card fees, but every provider has their own fee structure and should be able to give you a simple explanation of their fees on top of card, and processor fees. The list below are fees to avoid, and Veritrans can show you on your monthly statement if you’re paying them. The cancellation fee will be in your contract or free terminal agreement.
Too often, merchants fail to receive the savings they were promised and/or experience a decline in customer service once they’re locked into a contract. But high cancellation fees – ranging from hundreds to thousands of dollars – prevent them from switching providers. Don’t let these fees prevent you from receiving the quality service you deserve. Ask about cancellation fees before you sign anything – this includes using their “free terminal”.
Monthly Minimum Fees.
Some processing providers still charge a monthly minimum processing fee to their merchants. You can avoid this fee, in many cases, by meeting or exceeding the collected transaction and discount rate fees. For example, if your monthly minimum fee is $25, the collected transaction and discount rate fees must equal or exceed $25 per month. By processing more than this amount, you should be able to avoid this fee altogether. If your processing volume will be low, it may be better to pay a slightly higher statement fee and have no monthly minimum fee. A good processor will educate you on these options.
Customer Service Fees.
This one is simple…Customer service should be free! Yet many merchants today still pay a “customer service fee” to their current processor on their bill each month.
Sales Item Fees.
Sometimes these fees are broken into different terms and found in different locations of the contract and statement. Always review your bill carefully and understand what you’re being charged for on each bill.
Other Item Fee
Similar to a Sales Transaction Fee, these fees are actually additional transaction fees. This unnecessary fee enables a processor to collect additional fees on each transaction.
Monthly vs. Daily Discount Cost Fees.
Most business owners prefer to receive 100% of their daily transactions deposited daily and then pay their processing bill once monthly; this is the most commonly accepted method of payment. Too often, a processor will assess an additional fee to merchants who prefer this monthly discount to the typically less preferred daily discount. This fee is often equal to an additional 2 basis points (.02%) of the transaction totals and can easily be avoided.
Annual Fee. This fee will vary by processor and often goes unnoticed as it only appears on one bill each year. This fee can range anywhere from $60 – $250 per year.
Debit Access Fees.
If your business accepts pin debit transactions, you may notice a debit access fee on your monthly statements. The fee is typically $5 per month…$60 per year your business could be saving. This fee is unnecessary and avoidable.
High Monthly Volume Surcharge.
Some providers charge an additional percentage on top of your normal discount rates, based on volume processed above your estimated monthly volume. Learn the details before you sign any contract.
Help Desk Fees.
Similar to a customer service fee, this fee is often charged on a monthly basis to support the customer service center available to assist you. Again, we believe customer service should be free!
Issuer Auth Access Fee.
This fee is essentially an additional transaction fee, much like the sales item fee and POS watts fee. Although this fee typically adds up to a very minor amount, why pay it when it is unnecessary?
Fees for Services You No Longer Use.
This is often the most obvious yet most often overlooked of fees. If you once offered check verification service through your credit card processor, for example, and have not used the service in a year, you are likely spending $200 – $300 per year that you can avoid. The same would apply to any service that you no longer utilize or deem necessary.
A good piece written explaining fees you must pay as opposed to fees to avoid, that vary from processor to processor can be found here. It also has good information on card cost by the issuing banks.
For a free analysis and recommendations for the products and services that will best suit your business’ needs, call 1-866-474-4144 or email us today. As always, if you decide to switch to Veritrans, we’ll personally reprogram your hardware and train your staff at no charge.