It is essential and mandatory to closely monitor the credit card processing fee. Even after meticulous watch and ward of credit card statement, still there are chances of paying no obvious fee, unknowingly. This article covers such loop holes to educate credit card holders.
Each transaction is chargeable which is called processing fee. When a customer's card is processed, a transaction fee and a discount rate are applicable to pay to the merchant account provider. But, unfortunately, these fee are not refunded when a transaction is reversed. Merchant account fee that is lost on the reverse transaction may not be considered if you operate good business.
To quote an example of hypothetical retail store loses $11 per month on refunds on ten credit cards which includes merchant account fee 1.7% and transaction fee $0.25%. In addition, common and non-qualified surcharges would make the loss more greater.
You will be surprised to notice hoe losses due to credit card refunds have been affecting your business.
As qualified charges are deducted from credit card transactions for each month through out the year, whereas, surcharges assessed at the end of month in a lump sum. According to many processors, surcharges are a separate fee and charged different times in a month. The lump sum deducted is shown as large fee on the merchant processing statement. Many merchants are of under impression that the lump sum charge is total processing fee but unlikely it is only a portion of total charges.
In fact, total credit card processing charges can be realized by adding fee to the downgrades at the end of month and surcharges to the qualified discount charges. However, these discount charges are deducted through out the month.
Each provider and processor operate different fee structure and layout hence it is generically difficult to read and explain merchant account statements. Whereas merchant service provider gives you assistance in case you do no not understand the merchant account statement.
Generally users are surcharged for monthly minimum payment whereas merchant accounts are charged with monthly minimum fee which often creates confusion. A monthly fee that is charged on the merchant accounts is that a processor has to collect from a merchant every month. For example, a surcharge of $10 will be assessed if processing fee for a particular month is $15 and monthly minimum is $10.
It is always advisable to check and compare schedule of fee for each month and merchant account statement. It may be that you are unknowingly paying monthly minimum fee even though your business is seasonal and slow. In such case, you can call the provider and make a request either to reduce the fee or waive off completely.
Millions of establishments have been accepting transaction with plastic account which is handy and substitute for money. Payment for goods and services became so easy. Despite all the convenience with plastic account, still there are things to be considered to secure plastic account.
Extra important information on no annual fee credit and APR credit
Possible Fraud . . .?
In August, I rented a trailer from the U-Haul store on Marginal Way. My mother had let me use her credit card to secure the transaction (you can’t rent one without a credit card, or so I was told). The contract was in my name only. I had the trailer for a day. I returned it, and the transaction was charged to my mother’s credit card (as previously arranged with my mother). My husband then rented a truck. The contract was in his name only. He had asked if they could secure the truck with the credit card previously used. They said, no, because the numbers are not kept on file. They stated that they would, in fact, secure the transaction with a cash deposit of $100. Had we known this from the beginning, we would have used cash for the trailer as well.
So we rented the truck, with the intention of only having it for a day. It turned out we need it for four. We called and explained this to the manager, and returned his calls when he called our cell phones, because he was not happy. I empathized, but I needed the truck to move. We brought the truck back on Friday, August 24, at 7:45 PM. The store was closed (the sign said it closed at 8:00), so we left the truck.
We had moved all of our stuff into storage, because we hadn’t yet closed on our house. When we finally did (four weeks later), my mother received a credit card statement. I had completely numbed it about paying U-haul, because I was so wrapped up in the house-buying process. U-Haul had charged her card $478.82 for the truck rental. I called the store, asked them to refund her card the charge, as they were not authorized to use her card for that transaction. I explained that, when this was done, I would pay for the transaction. The manager refused, told me I just needed to pay my bills, called me a liar. It was a lovely conversation.
Here is my question: The card was attached to the contract in my name. Did U-haul have the right to use that credit card to cover a contract in someone else’s name, regardless of our relationship? For all he knew, we could be divorcing. Does this amount to credit card fraud? And, do I have the right to ask them to refund my mother before I will pay a dime?
Paying my mother is not the issue. the issue is the unauthorized use of a credit card by a well-known corporation. THAT is the big deal.
Answer
Just pay the amount you owe to your mother. What's the big deal?
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