So far, we’ve discussed how many Merchant Account Providers exhibit unethical practices by charging unnecessary or hidden fees. Some providers take it a step further by failing to mention best practices or not offering updated processing terminals to ensure you are getting the best processing rates possible. Hence the topic of this post’s unethical practice: downgrades.
A downgrade results when a transaction is re-classified to a higher rate tier, resulting in a more expensive transactional cost. They are avoidable, but are unfortunately common because many providers intentionally allow their customers to maintain poor methods for taking payments.
Interchange downgrades are presented on merchant statements using the descriptors EIRF or Standard for Interchange rates. With a Tiered rate plan, they are categorized as Non-Qual. Here are a few examples:
Note: Non-Qual downgrades require a report for further details.
Now, let’s get into why they happen.
How you run transactions will determine if they will result in Interchange downgrades. Both the equipment and the process you use to run a transaction are at play. Here are the most common instances that trigger them:
Simply addressing these issues can result in a significant reduction in your processing fees. Here’s how.
Since some providers profit from Interchange downgrades, they are not incentivized to help you. Working with a reliable Merchant Account Provider that offers the following operational benefits will greatly decrease the chances of them occurring.
Though your rates are important, the equipment and service you receive from your Merchant Account Provider are just as significant. Be wise in choosing who you work with to avoid unethical billing.
Does your provider lack any of the techniques above to prevent this? Do you often get downgraded transactions? Tell us more in the comments section.