Continuing on our 4 part series of mistakes made by business owners when buying and maintaining credit card processing services, here is part 3.
- Contracts In short most companies don’t have them anymore, so in recent years, contract problems have become less of an issue for merchants. However, there are some out there that still exist, including the “forever” contracts that are often attached to “free equipment placement”. It’s free till you “quit” then you pay for the equipment. Ouch, backward and deceptively hidden “contract” with cancel clause.
Honestly, your representative is typically paid upfront for your account and the cancelation penalty and contract term is a way to protect the actual processor from damages if you leave before they “recoup: your representative’s pay.
So with that said, It’s fairly standard in the industry for a provider to charge a merchant a cancellation fee in the amount of $200 to $500 if the contract is terminated before its expiration date. Contract terms usually vary from 1 to 3 years.
Some contracts out there however call for damages equal to the amount of money the provider would have made if the business would have completed the term of the contract. That can get very expensive. Just make sure if they are going to charge you a cancellation fee for terminating prematurely, that it’s reasonable and doesn’t have any extra hooks in it.
If a provider hasn’t done a good enough job to keep the business, why should the merchant be penalized? Read your contracts and ask your provider the length of the contract and the cancellation fee.
It’s not unreasonable to ask for them to waive their fee but some sales people just don’t have the option and can’t. Also, if you want a “no contract – no termination penalty” Expect to pay your equipment and setup fees and other upfront fees instead. In other words, your representative doesn’t work for free, neither does the processor.
You pay now or you pay later. Merchant services isn’t to different from Satellite TV or Cell Phone service contracts in this respect. After all. You need the service. So choose to pay for it up front, over time, or at the exit. As long as the “cost over time” is fair and reasonable, and, you get what you need from someone to help you and service your account. You’ve done good.
Next week, we will continue our saga with part 4….stay tuned folks…
Contact Merchant Zoom today and we’ll consult with you on your best options.
Headquartered in Pinole California, MerchantZoom, Inc. was founded by Wally Arakozie. Previously employed by one of the largest merchant processing companies here in California for nearly a decade. Since the company’s beginnings MerchantZoom, has grown into a reputable national merchant provider. Along with delivering state of the art technology and competitive rates, MerchantZoom, thrives on personalized local customer service and support. In order for your business to ZOOM!
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Content Release Date June 19, 2017 – MerchantZoom Inc.
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