Accelerate Revenue & Eliminate Downgrades

As a small-to-medium-sized business owner, every dollar counts. Cutting costs is crucial, especially when you're managing expenses like credit card transaction fees.

While you may have already negotiated your rates, there’s still room to save—if you know where to look. In fact, a few small adjustments in your payment processing routine can help you avoid unnecessary downgrades and reduce your overall fees.

A "downgrade" occurs when a credit card transaction doesn’t qualify for the best rate because of certain factors. Understanding these factors—and how to prevent them—can lead to significant savings.

Below are the top reasons for transaction downgrades and simple steps to keep your fees low:

Always Enter the Address Verification Service (AVS) Information

Accelerate Tip:

When you’re prompted to enter a zip code (especially for card-not-present transactions, like online or phone orders), don't skip the zip! By bypassing the Address Verification Service (AVS), you risk paying a higher interchange rate.

How To Avoid The Downgrade:

Make sure to enter the full address information when prompted by your terminal or payment gateway.

For online or telephone orders, just submitting a response that the AVS was used is often enough to qualify for the best rate, even if there’s not an exact match.

Settle Transactions Daily To avoid Extra Fees

Accelerate Tip:

Delays in processing your credit card batches can lead to higher interchange fees. If you wait longer than 24 hours to settle a batch, you might find yourself paying more than necessary.

How to avoid the downgrade:

Settle your transactions daily at the close of your business day to ensure you're getting the best rates.

Automate this process if possible, so it’s one less thing to remember.

Avoid Manual Transactions & Forced Authorizations

Accelerate Tip:

When you manually enter a transaction authorization code (such as when you’re processing a forced transaction or a transaction without an authorization response), you’re likely going to incur higher fees. This is especially true when you use voice authorizations or enter reference numbers by hand.

How to avoid the downgrade:

Try to avoid manual entry whenever possible.

If a transaction is flagged or there’s a question about its legitimacy, make sure to obtain proper authorization through your payment processor to prevent forced transactions.

Input Sales Tax & Customer Codes For Commercial Cards

Accelerate Tip:

Commercial cards (like corporate or purchasing cards) require extra information, such as sales tax and a customer code. Failing to provide this can cause the transaction to downgrade to a higher interchange rate.

How to avoid the downgrade:

Always enter sales tax and the customer code when processing commercial card transactions.

If your customer doesn’t provide a purchase order number or code, establish a default reference code to use as a placeholder. This ensures you still qualify for optimal rates, even when information is missing.

Accelerate & Educate Your Employees

Accelerate Tip:

To make sure these best practices are consistently followed, educate your employees on how to prevent transaction downgrades. Small mistakes can add up quickly and eat into your profits. By training your team to follow these four simple steps, you can minimize your interchange fees and keep more money in your business.

Avoiding transaction downgrades is easier than you might think, and the impact on your bottom line can be significant.

By making a few simple adjustments to your payment processing routine, you can ensure you’re getting the best possible rates for your card transactions. Remember the following best practices:

  • Enter AVS info for card-not-present transactions

  • Settle transactions daily to avoid delays

  • Avoid manual entries and forced authorizations

  • Input sales tax and customer codes for commercial cards

Accelerate With Fee Insider

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