Credit Card Processing - 7 Tips to Save Money on Your Merchant Account

By T. L. Lindemood

If your business accepts credit cards, there are a number of ways you can reduce the amount you pay in fees for your merchant account. This article will help you identify any 'leaks' in your current merchant account and explain how to best handle transactions at the point of sale.

Here are 7 effective ways to save money on your merchant account:

1.) Double check the customer's signature against the signature on the back of his or her credit card. Make sure they match. If the card is not signed, get another form of ID to verify this information.

This one sounds simple, but think of how rarely this happens when you buy something with a credit card. This can be tricky as sometimes the last names will match up, but not the first. You'll have to make a judgment call here, but keep in mind that situations like divorce or a child using a parent's card without permission do occur. Making sure both first and last names match will help prevent charge backs and disputes, which typically result in fees to merchants of $25 to $40.

2.) Make sure you 'batch out' every day you accept sales. Transactions left sitting for longer than 24 hours will downgrade - and cost you more in processing fees.

3.) Swipe the card whenever possible vs. keying in the transaction. Try running it through the reverse direction if it doesn't 'take' on the original swipe. Transactions tied to a 'swiped" card are normally passed through at the lowest possible discount rates. The reason for this is that the risk is lower if a card is physically swiped.

4.) If the magnetic strip isn't working or you find you have to key enter a transaction - make sure you obtain the zip code of the customer that matches his or her billing information. This is important, because if the zip code isn't provided (or doesn't match) - you will end up paying a higher rate on that transaction.

5.) Make sure your merchant account is set up so that your business name and phone number appear on the customer's receipts. Also, you'll want to have it set up so that your phone number appears on the description line of your customers' credit card bill. The reason for this is that you want to provide open lines of communication between your customers and yourself. That way, if there are looking at their receipt or monthly credit card statement and have a question, they will call you vs. their credit card provider. (If they can't easily figure out where a charge originated from and call their credit card company, it can end up costing you anywhere from $10 to $40 in retrieval or charge back fees).

6.) If the terminal is prompting for corporate card data (i.e. the tax amount on a sale) - do NOT bypass that prompt. Providing that information will also help you qualify for lower rates than if you don't go that extra step.

7.) Ask your processor for a lower discount rate if you accept a significant amount of debit/ check cards. Generally, merchants with a smaller ticket size will see a large amount of these cards and the discount rate is always lower than on credit cards.

There you have it - 7 easy ways to save money on your Merchant Account.

These tips are all fairly easy to start implementing immediately - and you should start seeing significant savings as soon as your next billing cycle. However, make sure your current processing company will allow you to take advantage of these cost-saving efforts. Not all will, simply because they make more money on your downgraded transactions than on your swiped, or qualified, transactions.