Say you try to use your credit/debit card to pay for something online or in store, and it is over your limit or the card is canceled or you mistype the PIN or mistype the billing address or a million other things and the card is declined by the card issuer.
Is there a charge to the merchant for this? I had someone who used to have a merchant account in the USA claim they were charged $30 USD each time they tried to run a card and it was declined, and I have trouble believing that. Often I have clerks try to run a declined card twice, even three times, and I can’t believe management would let them do that if it is literally costing the business close to a hundred USD.
I’ve got a merchant account that is for card-not-present transactions and we’re not charged for declines. I can’t imagine why it would cost anything to check if a card can go through. If anything this would be covered by your monthly fee.
I think either the OP misunderstood that person or the person was wrong. $30 sounds like the fee for a chargeback (customer disputes a charge with the credit card company; credit card company refunds his money).
I pay twenty cents. I wonder if the person you were talking to meant 30 cents and not thirty dollars. Sometimes I tell customers “Sorry, I can’t keep running this over and over, it’s just going to keep declining and it costs me money to do that”. Not only do customers tend to not realize that it costs money to run a card, even if they do, they probably don’t know that it costs money even if no transaction happens.
Also, I was talking to my processor recently about just this. The agent specifically mentioned that if a card declines you shouldn’t run it over and over and over and over for two reasons. First is the obvious one, you’ll get dinged for all those charges. Secondly, it will sometimes go through by accident. According to him, sometimes the processor will send back an approval code of all zeros and, while it’s not your fault, once it gets straightened out, they’ll pull the money back out of your account.
I’ve had merchant accounts with 4 different processing companies. None of them charged a single penny for a declined card swipe.
However, the special thermal paper we used last year cost something like $4.00 for 100 feet, so when the machine spits out a 6-inch strip saying DECLINED, that strip cost us 2 cents. And since I’m paying the person running the register hourly wages, the 30 seconds spent running the card, waiting for the machine to respond, tearing off the paper, talking to the customer about what happened and asking for another form of payment, costs my company 8 cents.
The credit card processors we’re using now only charges us a percentage of the total transaction amount, so if no money changes hands we don’t pay any fees. But I know some other processors do have a per-swipe charge, usually 20 cents, on top of the percentages. Still, I don’t think that applies to incompleted transactions, but YMMV.
Card issuers used to have a bounty on cancelled cards - they didn’t want people “accidentally” trying to use them. I heard (3rd-hand or so) that they paid $50 if the merchant grabbed the card.
If they try to use its ATM ability, the machine will eat it as soon as it calls home.
Note: Spent many years programming for banks. Programmers see all the dirt. I worked with the ATM people (no, they would not tell me what was on the stripe) one time. This was mid-80’s. At that time, the connection to the mainframe was, essentially, dial-up. It was not unknown for the machine to be unable to connect. The ATM could be set to operated on its own, or shut down if it lost connection. How much to you trust your customers was the essential question. I have seen “Unable to display balance, proceed?” messages, so maybe those were offline. I’ve seen “out of order” on machines which were probably not being serviced.
Some merchant accounts used to have ‘nuisance fees’ where if a declined card was run through more than once they would tack on a $20 or so fee, which is why they may not be keen on “just run it through again, there must be some mistake!”