Some of the “un-mentioned” fees include:

Over Limit Fee
Under Limit Fee
CVV/CVV2 Verification
Annual Fees
PCI Fees
Card Not Present Surcharge
Address Verification “Doesn’t Match” Surcharges

Savvy merchants calculate their “effective rate” by adding up the fees on a monthly statement, dividing the total by their statement’s credit card net sales and multiplying that by 100.

Deceptively low rates. Salespeople can offer a rate lower than a merchant is qualified to receive. That happens in tiered pricing where the agent quotes the merchant the debit card rate without mentioning downgrades for transactions that don’t qualify. We’ve all seen ads offering processing at 1.39%. Merchants don’t know the right questions to ask. A merchant’s swiped credit and rewards card transactions should generate a large difference when the effective rate is determined for the month.

Interchange Plus – Interchange Plus Pricing can be good if it’s set up correctly but it’s usually padded with additional fees. Interchange Plus works like this: A processor offers you .50% over the interchange rates Visa, MasterCard and Discover charge them. This allows them to advertise a rate of only .50% but the true cost is really closer to 3% – 4%. For Example: There is a phone company advertising a $14.95 per month five year high speed internet access service on TV right now. The problem is the $14.95 is their cost and when you add in all the taxes and other fees the true cost is close to $50 per month. It’s 100% legal but not the whole picture!

Phony offer of $500. The agent tells a merchant that, “If I can’t save you any money on your monthly contract, I’ll give you $500.” What the agent really wants is a look at the current contract. No matter what the document says, the agent can vow to beat the rate.
How? By failing to mention that some of the fees that will show up on the statement.
Also consider a company paying straight interchange with no other fees. An agent could offer to pay $5 a month just to process with his company for the next two or three years. It would cost the processor $120 to $180, plus the cost of the setup, but it would eliminate a $500 payout. But no merchant would even switch for $60 a year savings, so the proposal is just to avoid the payout.
“Free” terminals. So-called free terminals are really loaners that merchants lose if they switch processors. If they change merchant-services providers, merchants have 10 days or so to return the equipment or else the acquirer debits the full amount specified on the terminal agreement form.

Such terminals don’t even qualify as “free use” equipment because they general come with minimum requirements for rates, monthly fees, monthly minimums and other fees.
ISOs offering free terminals sometimes include a clause on the forms merchants sign that specifies a 50% premium above the terminal’s “sale price” if the merchant fails to return the equipment.

Claiming to work for card brands. “I work directly for MasterCard and Visa,” some agents assert.

That can put merchants at ease but opens the door for scams. Warn clients about agents that make that claim. Including this line anywhere in a sales presentation should scream to a merchant that either, “I am too new to understand why this is wrong,” or “I am going to stick you because you’ll let me.” Either way, the agent should be shown the door.

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Retail sales in the U.S. rose more than forecast in July, reflecting broad-based gains that ease concern elevated unemployment will cause consumers to retrench.

The 0.8 percent advance, the biggest since February and first gain in four months, followed a 0.7 percent decrease in June, Commerce Department figures showed today in Washington. Economists projected a 0.3 percent rise, according to the median forecast in a Bloomberg survey. Purchases climbed in all 13 categories, the first time that’s happened since 2005.

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Pedestrians pass in front of a Gap Inc. store in San Francisco. Photographer: David Paul Morris/Bloomberg

2:35

Aug. 14 (Bloomberg) — Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ, talks about today’s reports on U.S. retail sales and producer prices in July. Retail sales rose 0.8 percent, the first gain in four months, Commerce Department figures showed. The producer price index rose 0.3 percent, Labor Department figures showed. The core measure excluding volatile food and energy increased 0.4 percent. (Source: Bloomberg)

1:51

Aug. 14 (Bloomberg) — Retail sales in the U.S. rose 0.8 percent in July, more than forecast, following a 0.7 percent decrease in June that was weaker than first reported, Commerce Department figures showed today. Separately, the producer price index rose 0.3 percent in July after an increase of 0.1 percent in the previous month, according to the Labor Department. Michael McKee and Deirdre Bolton report on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)

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Joblessness in excess of 8 percent is keeping consumer spending from surging. Photographer: Sam Hodgson/Bloomberg

Improved sales at merchants such as Gap Inc. (GPS) and TJX Cos. (TJX) indicate American households are looking beyond the global economic slowdown as hiring improves. At the same time, joblessness in excess of 8 percent is keeping consumer spending from surging, consistent with the Federal Reserve’s view that economic growth will “remain moderate over coming quarters.”

“The consumer hasn’t exactly thrown in the towel, which is encouraging because they’ve been battered and bruised in recent months with very slow job growth and a cloud of uncertainty,” said Millan Mulraine, senior U.S. strategist at TD Securities Inc. in New York. “We’re off to good a start in the third quarter. I do question the sustainability of the current level of spending. It can only be sustained if employment growth accelerates beyond July.”

Stocks climbed as the report bolstered optimism the economic expansion will be maintained. The Standard & Poor’s 500 Index rose 0.2 percent to 1,407.09 at 10:48 a.m. in New York. Treasury securities fell, sending the yield on the benchmark 10- year note up to 1.71 percent from 1.67 percent late yesterday.

Growth Estimates

Today’s report showed the retail sales category used to calculate gross domestic product, which excludes sales at auto dealers, building material stores and service stations, increased 0.9 percent, the biggest gain since January, after a 0.2 percent decrease in June.

Economists at Morgan Stanley in New York raised their tracking estimate for growth in the third quarter to a 1.9 percent annual rate after today’s report from a previous estimate of 1.7 percent. Their counterparts at Goldman Sachs Group Inc. boosted it to 2.3 percent from 2.2 percent.

Other reports today showed wholesale prices climbed more than forecast in July and inventories at U.S. companies rose in June at the slowest pace in nine months.

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