After checking out Costco, Chase Bank, QuickBooks, and Leaders Merchant Services, our next investigation turns to Merchant Warehouse. After contacting them via their website, a representative emailed us back with the following information:
There is NO CONTRACT and a $0.00 Cancellation Fee. Below is a breakdown of the account as well as some information about Merchant Warehouse that I recommend taking a look at:
Qualified Rate: 2.19% and $0.25 per transaction
Monthly Statement Fee: $7.95
Monthly Minimum: $25.00
Authorize.net Monthly Gateway Fee: $10.00
Cancellation Fee: $0.00
Annual Fee: $0.00
Start up costs: $0.00
Regarding Authorize.net, they typically have a $99.00 up front cost, $20-$30 monthly gateway fee, and an additional per transaction fee of $0.05-$0.10… all of which Merchant Warehouse does not have except for the $10.00 Gateway Fee.
No contract and no cancellation fee – pretty nice! Yet, we quickly ran into the same old “three-tier” pricing that most other merchant account companies are offering these days. Merchant Warehouse doesn’t call it three-tier pricing, but they don’t need to. They simply quote 2.19% as a Qualified Rate, which means there is also going to be a Mid-Qualified and Non-Qualified Rate. After we emailed to get a copy of the agreement, they actually listed the other “surcharges” which you can see in the image below. Yes, they like to circle (in red) that there’s no annual fee or termination fee, but we circled (in orange) the extraordinarily high rates you’ll be paying.
HIGH SURCHARGE NOTIFICATION: For a Mid-Qualified transaction, you’re paying 2.19% PLUS the surcharge of 1.79% which equals 3.98%. And, for a Non-Qualified Transaction, you’ll end up paying 4.18%! Can you believe that!?!
Frankly, that’s not really what bothers us the most about Merchant Warehouse! At the bottom of the representative’s email, we noticed several ways that Merchant Warehouse has been recently recognized, and we thought they looked a little fishy.
Three Ways Merchant Warehouse Uses Deceitful Marketing
- Merchant Warehouse paid for “TV coverage” and makes it look like it was real news.
One of the links (which happened to be broken) was trying to point to General Norman Schwarzkopf reporting on Merchant Warehouse for World Business Review. Yes, I’m sure it appeared on television…as PAID ADVERTISING. This is a common service that calls technology businesses all the time…including ours. Watch the “news coverage” by clicking here.
. - Merchant Warehouse pays to be listed as the “#1 Credit Card Processor.”
Dig a little deeper on the site that ranked them so high, and you’ll find that this is a paid advertising website. Credit card processors can even login to update their profile. This is not a legitimate ranking website with the best interest of merchants in mind.
. - Merchant Warehouse pays affiliates so they’ll recommend their service.
If you’ve ever stumbled across this guy’s website, please know that this is not legitimate. Notice that there are only two merchant account companies listed, and both of the URLS are affiliate links. This means that the guy who runs this website (who may or may not be featured in the sidebar photo) makes money every time a business signs up for an account with Merchant Warehouse through one of his links (or the big ad on the right sidebar). Don’t you think he’d recommend Merchant Warehouse as the best on the market if he’s getting PAID BY THEM!?!
Although Merchant Warehouse doesn’t hide all sorts of extra charges in the fine print like Leaders Merchant Services, they are using blatantly misleading advertising to lure you in. If you see that a merchant account company is ranked #1 on a website, look a little deeper to find out if they’re paying for that position on the list. Remember, there is always a better option.