Costco Merchant Services Review

Costco Merchant Services Overview

An Elavon Reseller

Costco Merchant Services is the merchant services division of Costco, a well-known wholesale retailer. Costco Merchant Services is actually a reseller of Elavon contracts, and this relationship is indicated clearly on the department’s website. Elavon is part of U.S. Bank’s (U.S. Bancorp’s) payment services division. This means that businesses that sign up for a merchant account through Costco will receive the processing services of Elavon.

Costco Headquarters and Ownership

Founded in 1976, Costco’s headquarters are located at 999 Lake Dr. Ste 200, Issaquah, Washington 98027-8982. W. Craig Jelinek is the president and CEO of Costco.

Costco Merchant Services Review

  • Costs & Contract: Costco Merchant Services offers a three-year contract through Elavon with no early termination fee.
  • Complaints & Service: Costco Merchant Services has received more than 10 public complaints.
  • BBB Rating: Costco Merchant Services does not have a profile with the Better Business Bureau at this time.
  • Sales & Marketing: Costco Merchant Services does not appear to hire independent sales agents and has received a low number of complaints about its sales practices.
  • Rates & Fees: How Merchants Got The Best Rates With Costco Merchant Services
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Products & Services Offered

  • Debit and credit card processing
  • Electronic check acceptance
  • Prepaid and gift card programs
  • Sales reporting
  • Online payment gateway
  • POS equipment

Types of Businesses Served

  • Retail
  • Mobile
  • E-commerce
  • MOTO

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Costco Merchant Services Rates, Fees, and Costs

Key Points

Swiped Rate 1.22% + $0.12- 3.35% + $0.29
Keyed-in Rate 1.99% + $0.25
Virtual Terminal Rate 1.99% + $0.25
Payment Gateway Fee Undisclosed
Early Termination Fee None
PCI Compliance Fee None
Application Fee $25
Monthly Statement Fee $4.95
Equipment Lease Terms 48 Month (locked)

Three-Year Term

As noted above, Costco resells Elavon contracts, which suggests that Costco’s standard contract terms likely resemble the standard Elavon contract. Though Costco advertises rates as low as 1.22% plus $0.12, merchant reviews report fees as high as 3.35% plus $0.29. The former of those figures is the company’s qualified rate which may not be available to every merchant depending on its credit history, industry, among other factors.

The terms of a contract with Costco Merchant Services impose a three-year agreement with tiered pricing, a $25 application fee, a monthly minimum fee of $20, and a monthly statement fee of $4.95. To its credit, the company does not charge any early termination fees or PCI compliance fees. Costco also waives its application and statement fees for Executive members.

Virtual Terminal and Payment Gateway Pricing

In addition to its storefront payment processing services, Costco also dedicates a portion of its website that advertises its virtual terminal and payment gateway services. The company discloses that its keyed-in rate of 1.99% plus $0.25 applies to online transactions. It is unclear where additional fees, including gateway fees, technical support fees, or batch fees apply to these e-commerce services.

Purchase Instead of Leasing Equipment

Processing equipment is available for upfront purchase on the company’s website, but Costco may also lease equipment through Ladco Leasing, a poorly rated leasing provider on All told, Costco’s involvement doesn’t appear to add or subtract much from the usual services offered by Elavon. These factors compel us to award Costco a “B” in this category, but merchants are encouraged to compare the company’s pricing to the cheapest merchant account providers.

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Response from Costco Merchant Services

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Costco Merchant Services Complaints & Customer Reviews

Key Points

Total Online Complaints 10+
Live Customer Support Yes
Most Common Complaint Higher than Expected Fees

Low Complaint Volume

We only are able to locate few more than 10 Costco Merchant Services reviews publicly filed on this and other consumer protection sites. Older complaints mention poor rates, difficulty canceling the service, and an undisclosed early termination fee, while newer complaints describe fund holds, expensive equipment leases, and difficulty replacing a stolen terminal. However, given the date of many of these complaints in comparison to the company’s current policies, many of these issues may not affect new merchant accounts. For instance, the Costco Merchant Services website declares that merchants are not charged early termination fees. The one persistent issue seems to be higher than expected fees. A major factor in this may be due to the company’s website advertising qualified rates which may not apply to every merchant. However, albeit within the fine print, the company does convey this fact to visitors to its website.

Many of the available complaints have been posted on our Elavon review rather than this review. It is important to note that because Costco’s Merchant Services department falls under the organizational umbrella of Costco but resells the service of Elavon, it is very likely that many merchant complaints get split between the customer service departments and online profiles of these other 2 entities.

Costco Merchant Services Lawsuits

We have not found any outstanding class-action lawsuits or FTC complaints filed against Costco Merchant Services. Dissatisfied merchants who wish to pursue a non-litigious course of action against the company should consider reporting it to the relevant supervisory organizations.

Costco Merchant Services Customer Support Channels

Given Elavon’s average track record with complaints and the sheer size of Costco, it’s difficult to chart whether merchants are complaining about Costco’s Merchant Services. Overall, though, merchants do not appear to accuse Costco Merchant Services of being a scam or ripoff. Costco Merchant Service’s support lines are staffed by Elavon, which provides 24/7 customer support to merchants. We have assigned the company a “B” in this section but do not consider it to be a top payment processor for customer service.

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Response from Costco Merchant Services

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Costco Merchant Services BBB Rating Summary

No Dedicated BBB Profile

The Better Business Bureau does not have a page devoted specifically to Costco Merchant Services, and Costco itself has had its complaints distributed across multiple profiles for its individual locations. In addition, it’s possible that some Costco Merchant Services complaints could be redirected to Elavon’s BBB profile. It would therefore be unhelpful to consult the BBB for information about Costco’s Merchant Services, and we will not factor the BBB into this review.

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Response from Costco Merchant Services

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Truth In Marketing & Advertising

Key Points

Employs Independent Resellers No
Advertises Deceptive Rates No
Discloses All Important Terms No

Direct Advertising to Shoppers

Costco appears to market its merchant services using the same channels that it uses to market its other products, including mailed, online, and in-store promotions. The company’s large membership base allows it to advertise directly to its regular shoppers, sparing it the need to employ independent sales agents like its processor, Elavon.

Clarity Needed on Rate Quotes

The Costco Merchant Services website prominently quotes two rates of 1.22%* plus $0.12 and 1.99%* plus $0.25 per transaction. These rates are the qualified rates for swiped and keyed transactions. Those asterisks are expounded upon in the fine print beneath these quotes notes that these are the rates for Qualified transactions, but does not state that rewards cards (which receive mid-qualified and non-qualified rates) will process at a higher rate, nor does it list these higher rates. We consider this type of rate quoting to be somewhat deceptive, since merchants who overlook or misunderstand the fine print could have an unrealistic expectation of the rates they will pay. We have not lowered Costco’s rating too severely, however, because the fine print does explain that it is only showing the Qualified rates. If you suspect that Costco Merchant Services is charging you undisclosed fees, we recommend seeking a third-party statement audit to eliminate hidden costs.

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Response from Costco Merchant Services

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Our Opinion of Costco Merchant Services

Above-Average Option for Most Businesses

According to our criteria, Costco Merchant Services rates as an above average merchant account provider. As a reseller of Elavon contracts, Costco shows a lower complaint rate than Elavon and offers some mild additional value that its processor does not. The company’s rating was lowered because Elavon does not rate as an exceptional provider by our standards, and it is difficult to chart the complaints that might be filed against Costco Merchant Services. Merchants are advised in general to read their contracts carefully and to compare the company’s pricing to top-rated credit card processors to obtain the best deal.

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Why I'm Qualified to Write About Credit Card Processing and Merchant Account Services

I'm a former credit card processing sales director who left the industry because I didn't like how it takes advantage of small business owners. It feeds like a leech on businesses and thrives by imposing fees that are nearly impossible to comprehend. Seeing a need for change, I left and built this website help business owners better understand the industry, research merchant services providers, and get refunds of excessive merchant account fees. My experience of working "behind the curtain" in the industry, and using that knowledge for good, has resulted in millions of dollars returned to hard-working small business owners as well as enterprise-level companies.

From the time that I starting working in the merchant services industry to when I left to create this website, I've been on the pulse of payments for nearly 15 years. It didn't seem fair to keep this "insider" knowledge to myself. To lift the fog, I've reviewed hundreds of companies, read thousands of user reviews, and learned the pricing tricks of every provider. If you have questions about credit card processing, you can find the answers on this website.

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4 Reviews Leave Your Review for Costco Merchant Services Below

  1. John Mahlmann says:

    I was defrauded of a great deal of money as a result of processing credit card transactions online. My manager had Elevon confirm the first transaction was valid and continued processing based on confirmation the transaction didn’t raise any flags. Now that the chargebacks have started to pile up, I’m required to pay hundreds of dollars in fees. Additionally, Elevon is withholding money from my account I will not owe for 90 days after the last chargeback. Getting call-backs and names of supervisors has proven exceeding difficult. This is not what one expect from a company that receives $25,000 a year in fees. I strongly recommend exploring alternative options.

  2. BEWARE!!! Elavon does absolutely nothing to represent or stand behind their merchants, so even if they offer slightly lower fees it just isn’t worth it as just one unjustified chargeback more than offsets any savings. We had a cardholder claim they returned an item back in February 2017 – it is now May 2017 – which they did not, and in their chargeback claim provided no documentation whatsoever of any such return. And yet, all Elavon did was route form letters to us ignoring all of the evidence we provided as to the charge, matches on address and security code, and authorization to process the charge. I don’t think they even took the time to read anything, instead just reflexively rolling over to allow this cardholder to commit overt fraud. Complete and total FRAUD. So do business with Elavon at your own risk, especially if you’re a small or medium size business that they take for granted. Of course maybe they take everyone for granted and are just running their own scam pocketing all the savings from their non-existent customer service and pathetically inadequate and incompetent transaction authorizations bordering on outright negligence.

  3. Jon Acord says:

    Horrible, stay away! I am AMAZED costco went thru them, I had talked to someone about perhaps going thru Costco payment processing. The person took some info, was going to call me back to fill me in with what they could offer, they charged my credit card $150, I have called them and repeatedly told them I dont want this, they have been charging my credit card every month, they will call me to say they want to help set it up, and I repeatedly tell them I did not want this, please stop charging my credit card. STAY AWAY!

  4. SD says:

    Elavon is a rip-off….

    Everything looks good in the beginning with the low rates but look out !!! I had a terminal stolen, and Elavon wants $1226 to replace it !! How you ask… Elavon is asking me to buy out the full term of my contract as well as pay for the terminal to rectify this, and them start over with a new contract right away. They will not just sell me a new terminal to replace the old (3months) terminal and allow me to carry on business as usual. And they think this is alright and I will be happy to just go right back to them. They are smoking something down there.

    Stay awayfrom them.

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