Credit Card Processing Experts - 3 Hidden Credit Card Processing Charges That Could Be Taking Away Your Profits -

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3 Hidden Credit Card Processing Charges That Could Be Taking Away Your Profits

by Trisha Echols         When you signed up for credit card processing service, the company personnel informed you about the different fees you need to pay. Among them were sign up fee, discount fee, processing fee, etc... etc...But if you examine closely your first billing statement, you will notice that you incurred hefty charges. These were the amount taken from your merchant account without you knowing it. Below are some of the hidden credit card processing charges you could be paying without your knowledge. <ol><li>CHARGEBACKS         A chargeback occurs when a customer disputes your purchase transactions on her credit card. This could arise in a number of reasons. Maybe you delivered a faulty item, or that the customer did not receive the delivery at all. In addition, the customer's credit card may have been stolen and then used to purchase products from your store. Sometimes, it's plain dishonest customer. Whatever be the underlying reason, it could result to a costly chargeback. And here's the catch. Your merchant bank has the right to deduct the chargeback from your account WITHOUT INFORMING YOU ABOUT IT.       How should you prevent this sneaky charges? Simple.Be an honest in all your business transactions. Insist on delivering quality products. Make customer satisfaction your priority. You can also implement strict credit card transaction protocol--- like using AVS or CV1 and CV2, to guard against fraud. And most of all, negotiate an understanding with your merchant bank to inform you of any chargebacks. </li><li>DOWNGRADE CHARGES       Let's suppose that you sign up for a credit card processing service where your discount rate is pegged at 1.75%. However, you will be surprised to discover that the credit card processing company charges you a whooping 2.50% discount rate! How did this happen? Well, chances are that you incurred some downgrades. You see, the 1.75% discount rate depends on your compliance to the credit card transaction protocol. Meaning, you have to include the AVS service in each card transaction. You are also required to process only standard credit cards-- not government or corporate cards. And you need to batch all your card transactions at the end of the day or within 24 hours. If you fail to do these three, your 1.75% rate downgrades to 2% or to a much higher charges.     “ I didn't know about these downgrades till I scrutinized every item in my monthly bill, “ says Melissa, owner of a giant chain of flower shops in Italy. “ I was laxed in processing credit card transactions from my customers. Also, I often forget to batch my transactions at the end of the day. The downgrades really eat a lot of my profits. Now, I understand better. I instituted reforms and as a result, my company saves a total of $20,000 a year. That's a lot of money that might have gone to waste.” </li><li>CREDIT CARD EQUIPMENT CHARGE     Seasoned merchants emphatically agree on this one. Never rent any card equipment. Buy them. Because if you rent, you could be paying excessively high fees and charges. To illustrate, Mr. Kelly Phelps, owner of Gymnastics shop, rented card equipment for his credit card processing needs. When Hurrican Katrina decimated the area, including his store, he thought the company would condone his rental fees. He was wrong. Even though he no longer had a store, the company still continue to charge him $30 monthly rental. The brand new credit card equipment costs around $300. Mr. Phelps paid $30 monthly rental fee for 12 months—that was $360 already. And yet he is still obliged to pay $30 monthly rent for two more years or an additional of $720. The total sum is almost four times the purchase amount of a brand new machine. And he doesn't get to own the equipment after the contract period !     Moral of the story? Buy the equipment if can afford it. You could be saving yourself some hard earned money and some headaches. </li></ol>       ( Trisha Echols currently is a long-time financial consultant with established consultancy offices in Amsterdam, Halifax, Malaysia and other key cities. Her clients belong to the top 500 companies in England and in the United States. She does lectures on strategic business practices and also writes for various magazines on business matters.) <a href="http://www.onlywire.com/submit?u=http://www.creditcardprocessingexperts.com/3_hidden_credit_card_processing_charges_that_could_be_taking_away_your_profits.html;t=%20credit%20card%20processing;tags=credit%20card%20processing" target="_blank" title="Add this Article to Onlywire"><img src="http://www.onlywire.com/i/onlywire.ico" alt="" />Add to Onlywire!</a>

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