Our Experience with Intuit Merchant Services

We feel strongly that we were the victim of some misleading sales practices by Intuit Merchant Services (formerly Innovative Merchant Services). This blog post documents our experience. Our success with the BBB has been very limited: they simply closed our case without looking at any evidence. This information is relevant to this blog: It is the reason we ended up ditching Quickbooks POS.
Timeline: 1. Sales

When we initially looked at purchasing Quickbooks Point of Sale (POS), we shopped around to make sure their credit card processor was competitive. You only get one choice of a provider with them so we carefully requested details so we could make an informed decision, or so we thought.

We were initially given a rate over the phone which was very competitive. I had to really press the salesman to get it in writing, as this email thread shows:

TODO: redact, format, and post email thread.

The verbal message was there are two tiers: keyed and swiped. Swiped rate is 1.64% + .23. Keyed 2.44%. The written documentation we signed does not contradict this claim.

Timeline: 2. Auditing fees

Years later, we decide to audit our credit card processing statement. These things are very cryptic. You wonder if it is on purpose. This is a place where we need more government regulation, not less. Anyways, we do the math and see we're paying more like 3.5% swipe fee. We find there is no way the reality on the statements is consistent with the information we were given at sales time.

Timeline 3: contacting Intuit

I politely inform them we've been charged way over the rates they quoted us. Yes I did read the fine print in the agreement and what they are doing is a mistake, and I want a refund. They are friendly, but tell basically tell us to piss up a rope. They do lower our rates to try and make us feel better for getting screwed though.

Timeline 4: BBB Complaint

So far, the BBB process has been a bit of a joke. I understand they are probably very busy and get a bunch of crazy complaints, but they closed the case without looking at any of the (compelling) evidence. I'm pasting the current version (Feb 18, 2013 10:50pm PST) of the complaint here:

COMPLAINT ACTIVITY REPORT  Case # 304977 BBB of Silicon Valley

Consumer Info: ,  Business Info: Intuit, Inc.
   Mountain View, CA  94039-7850
        -        -  520 901-3280
 aj@gmail.com


Location Involved: (Same as above)

Consumer's Original Complaint :
Credit card processor quoted 1.64% swiped card transaction fee.  Actual fees charged are closer to 3.5% even though we swipe all transactions.

We originally started this merchant credit card processing account in May 2009.  Since then, we've been charged about $11,000 more in fees than we should have, had the agreed to rates been actually implemented.

I contacted Intuit today, Jan 17, 2013 and explained the situation.  They said any sort of rewards card or business card does not qualify for the "swiped rate", even though we swipe those cards.  I explained almost everyone has a reward card, and that this was never disclosed to us.  To the contrary, the salesman, Steve M. assured us in writing that indeed the rate for all swiped transactions was 1.64%.

Intuit's website continues to advertise this false information here:

http://payments.intuit.com/products/quickbooks-payment-solutions/point-of-sale-solutions.jsp

In fact, their lowest rate was just raised to 1.69% without notifying us nor modifying the agreement and advertised rate I just linked to above.



 

Consumer's Desired Resolution:
I would like a refund for all fees on swiped cards over the 1.64% I agreed to.  I have not calculated this exact amount, but based on the percentages of a few statements, I estimate the amount owed to be 11,400.  This was calculated by these assumptions:Annual swiped credit card revenue  180,000Advertised fee  1.64% Average charged fee 3.5% For three years this ends up $11,400.

BBB Processing 

01/17/2013   web BBB Case Received by BBB
01/17/2013    BBB MORE INFO RECEIVED FROM THE CONSUMER : Our merchant account number with Intuit Point of Sale Merchant Service is 
 5247712000079372
01/18/2013   LMP BBB Case Reviewed by BBB - Member
01/18/2013   Otto EMAIL Send Acknowledgement to Consumer
01/18/2013   Otto EMAIL Notify Business of Dispute - Member
01/28/2013   WEB BBB RECEIVE BUSINESS RESPONSE : January 28, 2013
 Better Business Bureau of Silicon Valley
 1112 S. Bascom Ave. San Jose, CA 95128
 Re:   - Complaint #304977
 To Whom It May Concern:
 I received the complaint your office forwarded on behalf of   regarding his Intuit Payment Solutions account. Thank you for the opportunity to respond.
 Mr. 's refund request has been denied as all fees he has been charged are correct and in compliance with the Merchant Agreement that he agreed to when he signed up. The information pertaining to the credit card fees are disclosed on the Merchant Service Web site at http://payments.intuit.com/products/quickbooks-payment-solutions/point-of-sale-solutions.jsp. Disclosures information can also be found on the same link by clicking on Important disclosures. A rate review was processed per Mr. 's request and because of his transaction history we were able to negotiate lower rates for him.
 If you have further questions or concerns, please do not hesitate to contact me at (520) 901-3280. I will be happy to assist you.
 Sincerely,
 Maria Rivera
 Intuit Inc.
 Office of the President
01/28/2013   LMP EMAIL Forward Business response to Consumer
01/29/2013   WEB BBB BBB REVIEWS CONSUMER REBUTTAL TO BUSINESS RESPONSE : (The consumer indicated he/she DID NOT accept the response from the business.)
 The supplied link does *not* disclose the actual fee structure I was charged.  It is consistent with what I was told by the sales rep:  You will get the swiped rate as long as you use the card swipe connected to your computer.
 This is not true. Nothing I signed told me otherwise. This is a deceptive sales practice. 
 The fine print Intuit is referring to does not clarify this deception at all, I quote:
 "5 Card-swiped rate applies to qualified swiped Visa/MC/Discover network transactions and requires the card reader for QuickBooks for PC service, which is available for $69.95. To order, call 866-379-6636."
 I was told that "qualified" was "card swiped".  Turns out only 20% of swiped transactions are "qualified".  That was *never* disclosed to me.  On the contrary I was told that I would get the 1.64 rate on all swiped cards.
 Anyone tell me that this is not deceptive.
 All I expect is full disclosure and honesty.  I can't do business with companies who cannot meet this expectation.  We were charged as much as 3.5% on average!
01/29/2013   LMP EMAIL Forward Consumer Rebuttal to Business
02/04/2013   WEB BBB RECEIVED BUSINESS' REBUTTAL RESPONSE : February 04, 2013
 Better Business Bureau of Silicon Valley
 1112 S. Bascom Ave. San Jose, CA 95128
 Re:   - Complaint #304977
 To Whom It May Concern:
 I received additional information that you provided regarding our previous response to
  's complaint. We appreciate the opportunity to respond.
 As stated in the previous response Mr. 's refund request has been denied as all fees he has been charged are correct and in compliance with the Merchant Agreement that he agreed to when he signed up. The following information is provided to all customers on the Merchant Solutions Application Agreement.
 I acknowledge that I have read the Merchant Agreement, and I understand and accept all of its terms and conditions. I understand that upon my acceptance, the Merchant Agreement, together with my submitted application, will constitute a binding agreement between Bank, Innovative Merchant Solutions (IMS) and myself with the same force and effect as if I had executed a written agreement. I understand that it is my obligation to obtain and retain a current, complete and correct copy of the Merchant Agreement and to periodically view the merchant agreement at (www.innovativeagreement.com) to review any changes to the Merchant Agreement.
 In addition the Fees and Discount Percentages are also disclosed in the Merchant Agreement.
 2.29 Fees and Discount Percentages
 The Schedule of Fees and/or Merchant Application set forth discount rates and other fees that apply to different types of Card Transactions. This section describes how
 IPS determines which transaction types qualify for the different transaction rates. Also, unless stated differently in the Schedule of Fees or the Merchant Application, the fees noted below will apply to Card Transactions. Additional charges that may occur from time to time include chargeback fees, representment fees and retrieval fees. If the relevant Schedule of Fees or Merchant Application calls for a monthly minimum fee, that fee will be deducted unless you have met your minimum processing volume. The standard delivery method for Monthly Statements is in an electronic, online version that will be generated each month and located at https://merchantcenter.intuit.com/welcome. The Qualified Discount Rate will be deducted daily. If Merchant has 2-tiered pricing with Qualified and Non-Qualified Rates only, transactions listed in the Mid-Qualified category will be charged the Qualified rate. Additional information about how we manage our rate categories is set forth on Exhibit D. (a) Qualified Discount Rate. The rate charged on transactions that have the following attributes: swiped non-rewards consumer signature credit or debit cards where the full magnetic stripe has been read that are electronically authorized and closed in a daily batch. (b) Mid-Qualified Discount Rate. The rate charged on transactions that have the following attributes and have not qualified to be charged the Qualified Rate: keyed debit cards with matching AVS response for "card present" transactions; keyed consumer signature debit cards with valid AVS response and order number for "card not present" transactions; and some categories of rewards signature credit cards where the full magnetic stripe has been read that are electronically authorized, and in each of the preceding cases have been closed in a daily batch; and (c) Non-Qualified Discount Rate. The rate charged on transactions that have the following attributes and have not qualified to be charged the Qualified or Mid-Qualified Rate: Business, Corporate, Purchase, International, Government, Rewards, World cards, "High End Value" or other such rewards cards as defined by the card issuers; keyed credit cards, keyed Consumer credit or debit cards without fully matching AVS; batches not closed within one calendar day of transaction; and any Pre-Authorized sale that is not processed/captured within 7 business days.
 If you have further questions or concerns, please do not hesitate to contact me at (520) 901-3280. I will be happy to assist you.
 Sincerely,
 Maria Rivera
 Intuit Inc.
 Office of the President
02/06/2013   LMP EMAIL Send Business' Rebuttal Response to Consumer
02/18/2013   OttO BBB No Consumer Response- Assumed Resolved with Letter
02/18/2013   OttO BBB Inform Business - Case Closed ASSUMED RESOLVED
02/18/2013   OttO BBB Case closed - ASSUMED RESOLVED
02/18/2013    BBB MORE INFO RECEIVED FROM THE CONSUMER : Why was this case closed?  I only received the initial response from BBB.
 I see nothing here that refutes my complaint.
02/18/2013    BBB MORE INFO RECEIVED FROM THE CONSUMER : To be clear, I have not accepted their response.  I took some time to read the latest response.  We were quoted the 1.64% rate as long as we swiped our cards.  I've never seen the text about three tier pricing before today.  I looked, and yes, I can back up everything I'm saying with  documentation.  Give me an email address and I'll send attachments.