Canceling a Merchant Account Without Paying a Fee

Canceling a Merchant Account Without Paying a Fee: Avoiding ETFs

Canceling a merchant account can be frustrating and complicated, but it doesn’t have to be. Whether you’ve found a better provider, closed your business, or want to exit your processing agreement, the process can be smoother with the correct information.

Many small business owners are hit with unexpected and often exorbitant termination fees, making canceling their merchant account a stressful and time-consuming headache.

In this article, we will guide you through the steps to canceling a merchant account as seamlessly as possible while trying to avoid ETFs and saving you time and peace of mind.

Canceling a Merchant Account without Paying a Fee – Avoid ETFs

Here are some strategies to cancel a merchant account while avoiding fees.

Unravel the Details of Your Merchant Account Contract

Canceling a Merchant Account

Taking the time to thoroughly review the agreement before signing is critical in avoiding unpleasant surprises and fees later on. If you missed anything during your initial review, now is the time to review it again and understand the cancellation provisions.

Pay special attention to the following areas when evaluating your contract:

Early Contract Termination Fees

It is critical to understand the fees associated with terminating your contract before the end of its term. This can include early termination fees (ETF), which can hurt your bottom line.

Compensatory Damages

Some merchant service providers may include compensatory damages in the contract to recoup losses if the agreement is terminated prematurely. It is critical to comprehend the magnitude and scope of these damages.

Expenses for Equipment Return

If the contract requires the return of equipment, be sure to understand any fees or expenses that may apply. It can include restocking or buyout fees for equipment.

Equipment Lease Termination Fees

Merchants who have chosen to lease equipment need to be aware of any additional fees that may apply if the lease is ended before its specified term.

Before canceling your merchant account, you should consider the potential consequences, such as cancellation fees, compensatory damages, or equipment return expenses specified in your contract. Make an informed decision that is consistent with your business objectives and financial situation.

Contact your Sales Representative

sales representative

The best way to resolve ETF charges is to contact the sales representative or account manager who set up your account. This person may be able to waive or reimburse the fee and, in some cases, make the final decision.

If the agent is an independent contractor unable or unwilling to assist, legal action for deceptive sales tactics may be taken against them. It is also critical to call the provider and confirm cancellation terms, as well as to take down call details such as the agent’s name, call reference number, the information provided, and the date and time of the call.

Deep dive into your Latest Processing Statements

first choice payments

Examining recent processing statements is critical if you want to waive any termination fees in your contract. You can avoid potentially costly penalties by carefully reviewing these statements and determining if you are eligible for fee waivers.

Rate increases are an essential factor to consider. Did your provider raise their rates during the term of your contract? If this is the case, you may be able to cancel without penalty because many states have laws that allow consumers to do so within a certain number of days of a rate increase.

In addition, look for clauses in your contract that allow for cancellation if rates rise. This is a common feature offered by many processing providers; however, it is usually only available for 30 days, so act quick if you want to take advantage of this option.”

Equipment return

If you were provided with free equipment as part of your contract, you must return it as soon as possible. You may be charged a restocking fee or be required to purchase the equipment. A representative should give you specific instructions for returning the equipment, including the mailing address.

If you have leased equipment, be aware that terminating the lease can be difficult. You are not necessarily released from your lease agreement if you return the equipment. Equipment leases are typically distinct from your merchant processing agreement and may have a different contract length, making cancellation difficult. Even if you return the equipment, you may sometimes be required to pay the remaining amount. Consider whether it is better to keep the equipment lease if you are switching providers. Some machines can be reprogrammed to work with a new processor, so if you cannot terminate the lease, use it until it expires.


When dealing with termination fees for your merchant account, You can try negotiating to reduce or eliminate the price. The provider sets the fee, but the sales representative who established your account may have the power to waive it in certain circumstances. If you are unhappy with the service received or feel that fees were miscommunicated, consider speaking with a manager for additional support.

Having a polite and composed demeanor during negotiations is essential. The person you are speaking with is a human, and a friendly and respectful approach is more likely to result in a favorable outcome.

It’s also worth noting that, although you have signed a contract, your legal leverage may be limited. Nevertheless, a strong argument backed by facts and logic can help find a resolution that satisfies both parties. The negotiation process requires finesse, and a well-mannered approach can make all the difference.

Written Notice

To close a merchant account, send a written notice to the provider via email or fax to the appropriate address. You should include the following information: the provider’s name, address, merchant ID number, company details (name, phone, email, address), the effective date of cancellation, your signature, and the date of signing. Include any supporting documentation that suggests your early termination fee (ETF) should be waived with your cancellation notice. Some businesses have a form for this, but you can create your own.

You should explain the reason for waiving the ETF in your notice. Make sure to obtain receipt confirmation, and keep in mind that some contracts may require 30-90 days’ advance notice, during which time all fees must still be processed and paid.


Early termination fees (ETF) attached to merchant accounts are usually legal despite their unethical appearance. You should avoid ETFs before opening an account to avoid paying it later. Being well-prepared and polite can make a difference for those already in this predicament. Fee-waiver requests should be reported, complaints should be filed, and new fee terms should be negotiated if the processor is unwilling to do so. It’s easy to cancel a merchant account, but if there’s an early termination fee (ETF) in the contract, you’ll have to pay it unless certain exceptions apply. Considering the ETF’s expense and the potential savings from switching providers, deciding whether or not to cancel is a significant decision. If you’d like the flexibility to cancel your service anytime, the best choice is a processing provider with no contracts.

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