This article originally appeared on informed-merchant.com, a blog started by one of our founders, Sean, before he started FeeFighters.

One of the worst practices of the Merchant Account industry is the use of inconsistent buckets because it is completely deceptive.

Most merchants are billed on a 3-Tier or 3-Bucket price schedule.  The transactions, which VISA and Mastercard classify into one of 130+ interchange categories (see “What is Interchange“), each with it’s own price, are grouped by the Merchant Account Provider into 3 buckets, each of which has a price determined by the Merchant Account Provider (and negotiated by you – see “3-Tier Pricing and “Reading a 3-Tier Merchant Statement“).

However, the buckets are different at each Merchant Account Provider.  To make things even worse, some Merchant Account Providers use different buckets for each of their customers and most Merchant Account contracts have no written obligation for them to disclose wihch interchange categories are being bucketed into each buckets.

One of the easiest ways for a Merchant Account Provider to make extra money off of a merchant is to reclassify a transaction type that would fall into the Qualified Rate bucket so that it now falls into the Mid-Qualifed Rate bucket.  Especially due to the common practice of “Marking Up The Downgrades“, doing so will juice their profits and increase your costs significantly, probably without you even noticing

Most Merchant Account Providers are not crooked enough to overnight change your buckets.  However, many will manipulate the buckets during the price-comparison process.  Since you get a better deal the more you price compare, this undermining of your ability to price compare also undermines your negotiation power.

There are 2 ways to fight this:

1. Get Interchange-Plus pricing
2. Insist on seeing a detailed breakdown of which interchange categories fall into each bucket