What is an early termination fee?
A charge for closing your account before the contract term ends. In its harshest form, liquidated damages, it bills the profit the processor expected from every remaining month of the term.
From a merchant statement
Also billed as ETF, Cancellation fee, Liquidated damages.
Who charges it and why
The processor, through the term clauses of the merchant agreement, sometimes paired with auto-renewal language that quietly resets the term. Its purpose is retention by exit toll: the account stays not because the pricing is good but because leaving is priced.
What fair looks like
Fair looks like month-to-month service that earns your business continuously. A processor confident in its pricing does not need a fence around the exit.
Can you get rid of it
Before signing, have the termination clause struck or the term shortened; that conversation is easiest at the start. Under an existing contract, check the notice window and renewal date, since missing them can restart the term, and weigh the toll once against what the account overcharges every month.
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Frequently asked questions
What is an early termination fee?
A charge for closing your account before the contract term ends. In its harshest form, liquidated damages, it bills the profit the processor expected from every remaining month of the term.
Who charges the early termination fee and why?
The processor, through the term clauses of the merchant agreement, sometimes paired with auto-renewal language that quietly resets the term. Its purpose is retention by exit toll: the account stays not because the pricing is good but because leaving is priced.
Can you get rid of an early termination fee?
Before signing, have the termination clause struck or the term shortened; that conversation is easiest at the start. Under an existing contract, check the notice window and renewal date, since missing them can restart the term, and weigh the toll once against what the account overcharges every month.
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