How can I cancel my merchant agreement without incurring fees?

Read the fine print carefully before proceeding and get any fee waivers in writing

Your Business Credit with Elaine Pofeldt

Elaine Pofeldt is a journalist whose articles on entrepreneurship and careers have appeared in Fortune, Working Mother, Money and many other publications. She is a former senior editor at Fortune Small Business magazine and an entrepreneur herself, as co-founder of Her book, “The Million-Dollar, One-Person Business,” was released in 2018. She writes "Your Business Credit," a weekly column about small business and credit, for

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How do I cancel my merchant agreement without incurring termination fees?

Start by reading your agreement carefully. Mysterious or little-known fees might be buried in the agreement's fine print.

If you negotiate a fee waiver, make sure to get that agreement in writing.

Do all of this ahead of time in order to be prepared and avoid any unnecessary termination fees.

Expert Q&A

Check out all the answers from our credit card experts.

Dear Your Business Credit,

How do I cancel my merchant agreement (without the fee)? – James 

Dear James, 

You’re smart to pay attention to fees in your credit card processing merchant agreement.

Often, they’re buried in the fine print of a contract that’s about as much fun to read as the ingredient list on your breakfast cereal – and often goes unread by business owners. But what you don’t know can hurt you. Fees can really add up if you’re not aware of them.

See related: Is it time to negotiate a new merchant account?

Merchant fees to consider when canceling a contract

So, which fees should you look out for? The Federal Trade Commission, which has been keeping a close eye on merchant account providers, has published an excellent article detailing some of the fees a merchant provider might charge.

The list includes:

  • Statement fees
  • Authorization fees
  • Voice authorization fees
  • Address verification fees
  • Retrieval fees
  • Chargeback fees
  • Account on file fees
  • Batch/ACH fees
  • Online reporting fees
  • Annual fees
  • Semiannual fees
  • Application fees
  • PCI fees
  • Compliance fees
  • Early termination fees

Not all of these fees are known to kick in when you leave a contract, but some merchant account providers have been known to hit customers with charges for mysteriously named fees upon cancellation, so it’s smart to be aware of them. 

Be proactive to save on merchant fees

Fortunately, there are some ways around paying these fees.

You may be able to set things up at the outset of your agreement so there are few or limited fees.

As the agency notes, “These fees are often negotiable. If a sales agent tells you he or she can waive a fee or that you won’t be charged for a certain fee, get that promise in writing. Keep a copy in case you’re charged later for something you were told was free.”

Beware of hidden fees

Readers who are signing new contracts should be aware that, while there are many honest merchant account providers, some in the industry have been unscrupulous in the past.

Sales people may say their company offers zero cancellation fees when that’s not true, so read the fine print before you sign.

If you cannot find the phrase in the contract stating there are zero early termination fees, ask the sales person to highlight it for you or ask for separate documentation in writing. 


Tip: When selecting a merchant service provider for your business in order to accept credit card payments, one important consideration may be the fees charged for merchant accounts. You may incur costs that include one-time fees, monthly fees, transaction fees, discount fees and more. Read "A brief look at merchant account fees" to learn more.

When a cancellation fee seems unavoidable

What if you couldn’t keep the early termination fee out of the contract? Generally speaking, when you sign a contract with a merchant account provider, there will be a date by which it can be canceled without financial penalty for early termination.

Make sure you take note of when this date is. Mark it in your calendar – with reminders a few days ahead of time – so you don’t miss it, in case you do need to cancel it in the near future. This might be the case with a startup business, where you don’t really know what the future may bring.

Getting ready to cancel a merchant contract

If you don’t already know what the necessary steps are to cancel the contract, find out what they are ahead of time, so you are prepared.

For instance, you may need to return the processing equipment you have leased or mail or fax a letter stating your request to cancel the contract for the cancellation to be considered valid.

If you send such a letter, make sure to get postal receipts to show that the letter was sent.

Be certain the merchant provider does not continue to charge you for the account by checking your bank statements frequently.

Ask for a fee waiver

What if you couldn’t negotiate a great deal? When you call the merchant account provider to actually cancel, ask if there are any options for getting the fee waived. Every provider is unique, so it is always worth asking.

Make sure to keep good records, such as the date and time of the call, the representative’s name and other details, in case you need to refer to the call later.

If you do get the fee waived, you’ll want to make sure you have a record of it. Better safe than sorry.

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Updated: 02-23-2019