As a retailer, your merchant account should be fairly straightforward. You can expect the best rates and the broadest range of options, because your type of merchant account is considered to be a relatively low risk.

Nervertheless, there are pitfalls you should try to avoid, and special measures you can take to make things run smoothly with your retail merchant account. Here are some tips on setting up your retail merchant account.

Is your bank the right bank?

Many smaller banks don't have the experience to set up and process merchant accounts. As a result, they'll outsource your merchant account to a larger bank for a commission. If you're doing business with a local bank, you may be able to save time and money by going directly to a bank that specializes in merchant accounts.

This isn't "betrayal" of your home bank. It's just a way to maximize the efficiency and profitability of your merchant account-so you can ultimately deposit more funds into your local bank account.

Know what you're paying for.

The fees on a retail merchant account are often confusing at first, because there are so many different ways to be charged.

As a retailer, you should be charged the "discount rate" for processing credit cards. This is generally less than 2.00% of the sale. Occasionally, when a credit card purchase is considered to be a greater risk, you may have to pay more than this.

In addition to the percentage you pay, there may be a fixed cost per transaction. On top of that, most merchant account services will charge you a monthly "statement fee" and possibly an annual fee as well.

There are sometimes also extra charges for special situations, such as charge backs, or for accepting debit cards or smart cards.

Know what you're earning

Estimating the average ticket cost and your monthly income is extremely useful in setting up your merchant account. If this number is too low, you may run into problems when your sales exceed the predicted amount.

Likewise, if you guess a high number, you may have to go through some extra paperwork and delay when you first set up your merchant account.

The good news is that merchant account service providers will generally allow you a lot of leeway. Plus, their representatives are skilled in coming up with fairly accurate projections, based on your business.

These estimates may help you choose a merchant account provider, as well. If you're expecting large tickets but low volume, for example, it makes sense to get a merchant service that charges a lower percentage, even if there's a higher fixed cost per transaction.

Avoid the cancellation fee "tie down."

Retail businesses have the widest options in selecting a merchant account, and it is relatively easy to make a switch if your needs change. Because of this, you may want to avoid a merchant account processor that tries to tie you down with a heavy cancellation fee.

Also, if your merchant account service automatically renews your account, be clear on what you would need to do to cancel your automatic renewal.

Setup ahead of schedule

Sometimes it can take a few weeks to setup all aspects of your merchant account, deliver your credit card terminal, and be ready to go. You certainly don't want to wait for all of this the day before you open up shop.

By setting up your merchant account a few weeks in advance, you can avoid this stress and worry, and know that you'll be able to accept credit card payments on opening day.

Ensight Merchant Services is committed to making things run smoothly whenever you process credit cards through your retail merchant account. If you have any questions, feel free to call us toll-free at 866-377-2292.

Merchant Account Articles

For new merchant accounts:
Tips on setting up your online Merchant account
Choosing an online payment gateway
Website requirements for an internet merchant account
Merchant Account Checklist
Tips on setting up a wireless Merchant
Tips for setting up a retail merchant account
Tips for setting up a phone or mail order merchant account

Getting the most out of your merchant account:
The Mechanics of Credit Card Transactions
What is Interchange and Assessments?
Assessing Charge Back Risk
Technology, Communication, and the Industry’s top equipment
Credit card terminals or software?
Merchant Account phone tips
Process Debit cards
Credit Card Processing at Ensight Merchant Services
Ensight Merchant Services Low Cost Guarantee on Credit Card
Ensight Merchant Services vs. Local Banks
How Phone Processing Works
How Retail Processing Works
How Wireless Processing Works
Credit Card Processing for Mac Users

Glossary of Terms