Online Merchant Account Pitfalls
by
Bobette Kyle
Recently,
I went looking for an online merchant account. My mission was
two-fold:
-
Open a merchant account for myself and
-
research options for my new
ecommerce Web site solutions information
section of
websitemarketingplan.com
After some research, I thought I'd found an attractive online
merchant account offered through a reputable reseller. I learned the
hard way about a pitfall I hadn't anticipated.
My Online Merchant Account Experience
I found what looked to be a competitive Merchant
Account offered through a program at a popular reseller. Fees were
summarized on the reseller's site and applying was simple. I paid an
$89 set-up fee, which took me to an online application I was
required to submit to get the process going.
That's when things got interesting. Submitting
an application meant agreeing to a previously undisclosed 45 page
merchant agreement. An unmentioned termination fee was buried on
page 11.
If I ever cancelled the account, I'd be hit with a $295
termination fee. I knew from my research that the large termination
fee was not competitive with other merchant accounts and other
aspects of the account were not attractive enough to compensate.
Suddenly, this merchant account was not such a good
deal.
More critically, however, the termination fee was not
disclosed before I was required to pay for set-up. I immediately
asked for a refund.
Non-Refundable
Then things got even more interesting. I was
told the $89 fee was non-refundable. I'd seen a footnote that the
fee was non-refundable, but interpreted it to mean only if they
actually did some work and processed an application. I had
not completed an application and did not intend to after learning of
the extra $295.
Using the email support system so I would have
documented proof if I needed it, I insisted on a refund. Still no
go.
When I explained there had been no set-up to justify a
'set-up' fee, they responded that the fee was really an
'application' fee - non-refundable, as explained in the footnote on
the order page.
Basically, they were telling me I'd paid $89 for a link
to an online application, which I had not and did not intend to
submit.
Finally, A Refund
I explained I would not take no for an answer. If we
couldn't work this out I'd report them to the Better Business Bureau
for undisclosed fees, file a complaint with my credit card company,
and copy the company president on each. My complaint was sent to the
next level.
Finally, after an additional three day wait, the refund
was approved.
Avoid An Internet
Merchant Account Trap
I made the mistake of taking information at face value and
relying on the reseller's good reputation in other areas.
To avoid unpleasant surprises such as mine, insist on all
information and agreements up front, before committing to the
account or paying initial fees.
Having all of the documentation may not be enough. Be sure you
understand all aspects of your Internet Merchant Account agreement
as well as fees and equipment required.
If you find incomplete, unclear, or conflicting information,
ask questions.
If your sales representative is more interested in getting
your signature than helping you understand your commitments, ask for
another representative or go elsewhere. There are many, many
Internet merchant account options available. You need not be trapped
into one that is uncomfortable for you.
Based on my own experience, I developed a list of seven
multi-part questions to ask a potential merchant account provider.
Before contacting a provider about fees and agreement details,
you may also want to familiarize yourself with all of the potential
fees associated with an Internet merchant account. |
