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Is Costco as Good as it Sounds When it Comes to Merchant Account Services?

Is Costco as good as it sounds when it comes to merchant account services? Unfortunately, no it isn’t. The Costco name would have us think otherwise. We often trust Costco when it comes to needing bulk items for our family, things for the home, or even for good vacation deals. But sadly, Costco doesn’t live up to its reputation when it comes to merchant account services.

Big Bank

The name behind Costco’s merchant account services isn’t Costco, it’s Elavon – a very smart company that knows how to make money – for itself. And of course, Costco also is a smart company that knows how to make money. How else could they afford to offer $300 Costco Cash Cards with new merchant accounts if they didn’t plan on making a hefty lump of money off of you?

We might think they are just being friendly Costco, but do we really doubt their ability to do the math and make a good deal for themselves? They definitely know how to not throw pennies away. While we may enjoy supporting Costco, do we want to be the victim of any company and lose our money? These are some things about merchant services and credit processing that can unfortunately make a victim of a business owner – or at the least, cause a misuse of their funds.

Cancellation Fees

For one, Costco/ Elavon charges a pricey cancellation fee. If a product were good, would you need to be roped into it? A three year contract like the one Elavon requires may not be in the best interest of your company – especially with a company that isn’t charging you the best rates. Find a better deal? You can’t switch. Not unless you want to pay a handsome cancellation fee.


One issue that Elavon/Costco and other processors can create for you is an issue referred to as “inconsistent buckets.” This means that while one rate may be quoted to you, you may never know what you are actually going to be charged for your transactions. The processors have a lot of leeway in modifying things ( transaction categories etc.) at any time to suit their interests. This relates to the bait-and –switch techniques that they have been found to use as well. One nice rate might be advertised, but like we see happen so often, a more costly and inescapable rate takes effect.


National Processing in no way wants to be part of tricking customers, roping them in, or using bait and switch tactics. We only like to do good business that develops good relationships between us and our customers. If you would like information on what we do to help you to not be a victim, but to instead be an educated merchant making the most of your money, please contact us.Our methods are transparent and we are happy to take the time to fully explain them to you.

Posted in Other on Nov 12, 2012