Does Your Merchant Account Have an Early Termination Fee?
After reviewing a few dozen credit card processors, I’ve started to see a pattern of sticking points that unhappy merchants repeatedly complain about. One of those points is the early cancellation, or early termination fee.
I can’t count how many complaints I’ve read from folks who’ve lost their marbles once they’ve found out that they have to pay a cancellation fee. They swear up and down that they were never told about it, so they refuse to shell out the anywhere between $100 to $500 bucks just to break their merchant processing agreement (MPA).
The title of this post poses the question; “Does Your Merchant Account Have a Cancellation Fee?” Well, I ask you again…does yours?
I’ll bet that some of you don’t even know, but to be fair, it’s not entirely your fault.
Sales reps are out to make money, so I would never expect to see one ruin a deal by verbalizing the existence of a cancellation fee before the deal is closed. Matter of fact, I’m willing to bet that they’d do whatever they can to actually avoid the subject entirely. I’m not trying to bad mouth all sales reps here, because the vast majority are actually very honest in their dealings, but I’ll take a quote from Upton Sinclair to explain myself…modified Merchant Maverick style:
It is difficult to get your sales rep to mention the early termination fee, when his salary depends upon him not mentioning it!
I urge you not to assume that there isn’t a merchant account early cancellation fee just because your rep didn’t say anything about it. If you don’t ask, then chances are, they won’t tell.
The only way to be sure is to first ask, then ask a second time, then finally verify by reading your ENTIRE contract. It’s boring, I know…reading contracts sucks! But trust me, early termination fees suck even more.
Amad Ebrahimi
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Thanks for the information it was helpful
My deposits are not in my account the next day what can i do to change this?
Hi Harvey,
Check out our merchant’s guide to getting your funds fast!
this was a very education In the business of CC processors. It happened to me with the termination fees.
The rates are so high and it cost 750.00 to get out of the contract. I am stuck for another two years.
The document they sent was not the real contract. The real contract is on line once you agree to there terms as spoken to you on the phone. North American BankCard is the worst I have ever dealt with.
Amad,
I am a very small craft sales business. No online sales; just craft shows. Can you recommend something very basic? I want to accept credit card payments on my iPad.
I am reading a lot about services, but none seem to be geared toward a business as small as mine. Any suggestions? Thanks in advance.
Hi Terri,
I would recommend Square. If you have further questions please let us know.
what can I do when a i payment charges me a cancellation fee of 350 dollars when they never explained that there was even a fee in the first place.
what can transtech merchant group do if i cancel early
I signed a contract POS system for my restaurant for four years,but I Sold the restaurant within a year,should I responsible for the other three years ?
Hi Amad.
Since you are considered somewhat of an expert in this industry, do you have any advice and or direction I may take to get help with the current scamming processor I am with. Are there any avenues to take get out of contracts and fees etc…I would love to hear from you.
thank you.
Brenda,
Generally it’s difficult to break a contract with an existing processor, unless you can find a new processor to buy it out for you. If your business is worth it to the new processor, they may do it.
I just got hosed on mine- I canceled my account with Swipe Now because they kept adding random new charges to my account every month. When I signed up, the rep told me there was no long term contract and no early termination fee. I asked him specifically because it had been an issue with my previous provider. Guess what? Swipe Now just charged me $395 for early termination. I feel like an idiot for believing the rep. However, the contract where the term is outlined is in a totally separate document from the application and I NEVER received a copy. So yeah. I am a big idiot, but they were very misleading.
Wow, that is a great reference from Eric — like lending tree for Merchant Service Providers, great idea and looks like a great service.
–Kevin
Another way to avoid a cancellation fee is to use TransFS.com to shop for, and find, your merchant services provider. We ensure that any of the merchant services providers that participate on our site will not levy a cancellation fee on anyone who finds them using TransFS.com.
Cheers,
Eric Olson
Co-Founder: TransFS.com
Thanks for the reference Eric.
Great to know that you guys are working for the merchant on this one.
no they can just raise rates when ever they want, thats why they have no agreement is what its called and when explained right it makes since, lock the rates in for 2-4 years, but it helps when I run across not agreements and show them how they have all those hidden fees! Lol!