• Lack of Oversight and Government 
    ​Regulation Gives Credit Card Processors 
    ​Free Rein to ​Overbill Merchants. 

Keeping Your Interchange Rebates

When merchants post refunds, the processing networks (Visa, MasterCard & Discover) return the Interchange to the processor.


In this example, the merchant had $5,730.70 in returns, and the processor properly credits the merchant the 2.21% Interchange Rebate, also called a Credit Voucher in this example. 


However, because processors know most merchants don’t know they are supposed to receive this rebate, and they most often just keep it!


While this is not a major issue for companies with little to no returns, it can add up to tens of thousands of dollars for merchants that post a lot of credits or have high number of returns.  


We can’t show you what a statement looks like that is missing returns/credit vouchers because, logically, they just aren’t there; however, this example shows you what you should see if you post credits and issue refunds.                    

  • Fairly easy to detect

  • Does not require an audit to uncover

  • Found on about 50% of audits

  • Found on small to large merchants 


Keeping Your Debit Rebates 

The Durbin Swipe Fee Amendment* requires issuing banks** to reduce the Interchange fee to 0.05%*** to the processor. However, there’s nothing in the law that requires the lower fees get passed on to the merchant.


Many merchants are not aware of this law or they do know about the law but don’t know that the rates are only 0.05%. Therefore, many processors just keep the difference in the lower fees for themselves. 


If a merchant is being billed using, for example, Bundled Billing, they would see the Debit Fees as a credit. As an illustration, a retail merchant that has a Bundled Rate of 2.05% is made up of 1.51% Base Interchange (paid to the Issuing bank) + 0.13% Dues & Assessments (paid to Visa) + 0.41% Discount Rate (paid to the processor). The Debit Fees would be 0.05% Base Interchange + 0.11% Dues & Assessments + 0.41% Discount Rate = 0.57%. 2.05% - 0.57% = 1.48% credit/rebate. However, if the merchant is billed Unbundled, then they would see the rate on their statement like the one shown here. 


* Signed into law 07/21/10 and effective 10/01/11 amended the Dodd-Frank Wall Street Reform and Consumer Protection Act.

** Debit Cards issued by banks with less than $10 Billion in assets are excluded (e.g. many Credit Unions and small local banks). These cards make up a very small percentage of all debit transactions, and while the Interchange is not 0.05%, it is still much less depending on how the card is processed, swiped, keyed, etc.

*** Visa Credit Interchange has a $0.10 fee, and the Visa Debit Interchange is $0.21, or $0.22 if it has fraud protection. For the sake of simplicity, those differences are not included in the above example. For merchants with a $500 average transaction, the above example would be off 0.01%.

  • Impossible to detect

  • Requires an audit to uncover

  • Found on about 50% of audits

  • Found on small to large merchants

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