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  1. #1

    Merchant Solutions - Cancellation

    Are those cancellation penalties for merchant solutions accounts pretty iron-clad? Any work-around to an escape clause without penalty?

  2. #2
    Join Date
    Mar 2005
    Location
    New Jersey
    Posts
    113
    They are iron clad and they will come after you if you try not to pay it. But some processors will let a merchant out without penalty under certain circumstances. But those cases are very specific and the odds of you being eligible is small. That's why you always have to either be sure you've chosen the right merchant account provider or chose one without a long term contract.
    John Conde
    Merchant Account Services
    | IT'S HERE: Merchant Accounts 101 : Learn Everything About Merchant Accounts

  3. #3
    Join Date
    Jul 2003
    Location
    Castle Pines, CO
    Posts
    7,189
    Most of the time if you have been with the processor for at least 6 months, the agent will try to get the fee waived. Most processors in business to make money and they don't want to do business with people that might not be in business in the next couple of months.

    Businesses want to do business with people who are in it for the long term. Talk with the agent and usually the fee can be waived if your account was in good standing

  4. #4
    Join Date
    Aug 2003
    Location
    Chesapeake, VA
    Posts
    3,379
    If early termination fees are a concern - and frankly in my opinion I feel that they should be for the average business - you can always seek out a merchant processor that does not require them.

    Early termination fees are NEVER a benefit to a merchant and should be avoided whenever possible.

    And unlike companies like cell phone providers where they provide you with a tangible asset upfront (such as a brand new phone) that has a capital cost that they need to try to recover, there is a much smaller incremental setup cost for a new merchant account.

    As a result, early termination fees are often just used as a bargaining chip in the event that a merchant wants to cancel. "Well, that's fine, but you do realize that you will be debited for [insert amount]" etc. Sometimes this works for processors and sometimes it doesn't - depending on the degree of merchant dissatisfaction.

    However, I have always believed that the focus for any merchant processor - and any business for that matter - should be to keep your clients by keeping them satisfied and not try to handcuff them contractually into staying.
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  5. #5
    Depending on your monthly statement fees and/or monthly minimum, if any vs the amount of the termination fee and the number of months left on the agreement it can sometimes be cost effective to let it run out while processing zero volume.
    Dave
    PH: 800-761-7475
    PH: 802-876-5087
    www.RiskPayments.com

  6. #6
    Join Date
    Mar 2005
    Location
    New Jersey
    Posts
    113
    Quote Originally Posted by businessamerica
    Depending on your monthly statement fees and/or monthly minimum, if any vs the amount of the termination fee and the number of months left on the agreement it can sometimes be cost effective to let it run out while processing zero volume.
    That's a good point. I've seen cases where the merchant left their old account open for a year and paid their monthly statement fee and a monthly minimum and still saved a lot of money with their new account.
    John Conde
    Merchant Account Services
    | IT'S HERE: Merchant Accounts 101 : Learn Everything About Merchant Accounts

  7. #7
    Join Date
    Dec 2004
    Location
    Las Vegas/St. Louis
    Posts
    175
    I recently had to come to that conclusion myself (referring to businessamerica's post) My original merchant acccount that I signed years back had too long of a commitment to it, and the company I signed with has lost their way... They got too big and greedy.

    Ill make their B.S. public later once they have figured out how crooked they are gonna go, but not now. Im in the process of making sure they have no volume. Its just hard when you put too much energy into an MSP.

    Ill keep you guys up to date on what happens with this company, because I have a feeling its gonna get ugly.

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