By breadpointofsale January 6, 2026
Analyzing a merchant statement from a restaurant business might look overwhelming at first, but it is indeed one of the most effective ways to know where the money from the restaurant is going. Merchant statements contain information beyond just the total sales and deposits.
They contain all the information for every fee, adjustment, and charge associated with credit card transactions. Restaurant owners can learn to analyze a merchant statement effectively by knowing a few simple tips and steps.
What Types of Fees are Charged to Restaurant Merchant Accounts
Fees for restaurant merchant accounts come in many forms, and while each provider is a little different, most restaurants will find the same types of charges on their statements. Firstly, we have the interchange fees, which are paid out to the bank that issues the customer’s card and usually comprise a tiny fixed amount plus a percentage of the sale.
Secondly, processing fees go to the payment processor for handling transactions and moving money into your restaurant’s bank account. Most restaurants also pay a monthly service fee for account maintenance, reporting, and support. If you rent card readers or POS systems, expect to also see equipment rental fees. Thirdly, we have authorization fees, which are charged each time a card is checked for approval, even in cases when a transaction was declined.
Also, we have assessment fees, which are taken by the card networks themselves to support the systems and fraud prevention. Finally, batch processing fees are charged when your restaurant settles its daily transactions. While each fee may seem small, together they can significantly impact your restaurant’s profit if not reviewed regularly.
Why Your Merchant Statement Deserves More Attention
Merchant statements are important because they help you to see what’s really happening in your card transactions, not just the final deposit amount. Business owners can often overlook them in a rush, thinking that the numbers and letters make no sense to them, but this can be very expensive.
A merchant statement can be considered a financial control feature since it assists you in determining the true rate of card transactions, which is the actual rate you’re charged and not what the company promised.
With this feature, you can identify unexpected or unclear charges before they become a problem. In the long run, your statements will eventually show you how your customers like to pay and the effects of their payment methods on your statements.
The most important thing is that your statements can help you track your payment processor regarding whether your rates have increased or if new charges exist.
How Restaurants Can Read and Understand Their Merchant Processing Statements
Step 1: Spot the Key Details on Your Restaurant Merchant Statement
When analyzing your restaurant’s processing statement, begin with the identification of the most notable pieces of information. The processing statements from every processor have unique patterns. At the top of the processing statement, you will most likely see the name of the payment processor and contact information for support. Immediately below, your restaurant’s business name appears.
You will further notice the billing cycle, Merchant ID, deposits made, and the deducted payment amount. All these numbers will provide you with a quick view of the number of transactions made in the particular time cycle, as well as the deducted amount in the fee.
2. Identifying the Existing Pricing Model in the Restaurants
Next comes determining which pricing model will apply to your business. This is significant as it will have a direct impact on how much you’ll pay for every transaction that occurs. Some of the pricing models available are flat rate pricing model, interchange plus pricing model, tiered pricing model, and subscription pricing model.
Flat pricing charges a fixed fee for each transaction, which can be quite expensive for restaurants handling large numbers of card payments. Interchange plus clearly separates card network fees and processor markup, making it easier to understand. Tiered pricing segments businesses into categories with varying rates. This can be a challenge when considering expenses.
Step 3: Check How Your Fees are Deducted
Restaurants need to pay charges either on a daily or monthly basis, which affects the cash flow of the business. When businesses use the discount method on a daily basis, the charges are deducted from the settlement of the transaction even before the deposit is sent to the account of the business. This can make daily sales look lower than expected.
However, with monthly discounting, all the processing fees are charged once at the end of the month. Most restaurants favor this approach because deposits will match the daily sales totals, which makes accounting easier and clearer.
Step 4: Recognize Your Real Processing Costs
Now, examine the detailed breakdown of fees. The interchange fees charged by card brands, and any extra processing fees your processor passes, are all mentioned on your statement. Take the total fees and divide them by your total card sales to find your effective processing rate.
Restaurants often process enough small transactions, which makes even the tiny fees add up fast. Knowing which charges are card network costs and which are processor markups helps you know where the money is actually going.
Step 5: Review Fees, Compare on a Regular Basis
Last but not least, analyze your costs and review them at least once a year. Consider fees by card type, such as Visa, Mastercard, or American Express, and look at how much they cost your restaurant.
You might also notice batch fees, which means every time your daily transactions are transferred to your bank account, you’re being charged. Depending on whether your restaurant has low chargebacks and consistent volume, this may give you some room to negotiate better rates or at least switch to a pricing model more friendly to your restaurant.
How You Can Use Your Merchant Statement for Calculating Your Effective Processing Rate
Your merchant statement can tell you the true cost of accepting credit and debit card transactions in your business. This is known as the effective rate. Many advertised rates do not include additional charges such as the PCI fee, batch fees, service fees, and other hidden fees. This is the reason why it is vital to take a look at your statements.
To calculate the effective payment processing rate for you, you would need to know two things from your statement. The first would be the total sales made using cards for the month. The second would be the fees that have been charged for the same period. Once you have this data, you can use the following formula:
Efficiency of payment processing rate (%) = Total fee/Total sales volume × 100
Let’s consider a simple example. Suppose your business handled sales up to $20,000 for a month. Now, let’s calculate and see what your total fees will look like. Your interchange fees would be $360. Your card brand assessment would amount to $28. Your processor markup would stand at $120. Your batch fees would amount to a maximum of $6. There would also be a service fee up to $10 if applicable. Finally, your business would also be charged an admin fee of $8. Your total fees would therefore amount to a maximum of $562.
Next, you need to calculate the result of dividing $562 by $20,000. Doing this calculation, you will be able to determine your effective rate for payment processing, which is 2.81 percent. Even though your previously advertised rate was 2.50 percent, when all additional costs are considered, your new rate is higher than before.
Common Mistakes When Reading Merchant Processing Statements
Merchant processing statements can be confusing and time-consuming, and often owners simply glance over them or skip them altogether. This is understandable, but it can lead to paying more than you expected. A lot of little things buried in the statement can usually explain why your fees go up more often than you expected. Here are the most common mistakes business owners make, and how to avoid them.
Firstly, one of the most common misunderstandings are associated with the discount rate. Most business owners believe that they are receiving some kind of special deal or getting a lower price. The reality is that the discount rate is simply a different term used to charge your processing fees. This is not a discount on your costs, and thus should always be closely scrutinized.
Another mistake is trusting the summary section alone. The summary does show you total sales and fees, yet it does not tell the whole story. Some of the fees are billed later than others, such as interchange adjustments or monthly service fees.
Many merchants also fail to consider or ignore unclear charges. Service fee or admin fee charges are mostly not taken seriously or even noticed. Such charges are sometimes buried in the statement or come in the following month. It is important to contact your payment processor when you come across a charge with no clear details.
Another common mistake we have is the failure to compare statements from month to month. You cannot possibly evaluate changes by simply examining one statement alone. If you notice sales are steady for you, but you are paying higher fees for processing. This means there is some kind of change taking place. Maybe credit card transaction usage has changed for some of your customers, or you might have been charged more by your processor.
Additionally, some owners do not take chargebacks and refunds seriously. The refund amount decreases your earnings, while chargebacks involve additional charges. If you do not study the chargeback and refund sections, you might overlook possible fraud or service problems.
Best Practices for Reviewing the Merchant Processing Statement
By reviewing your merchant processing statement each month, you will be able to control your restaurant’s payment processing costs. Restaurants are a type of businesses that conduct a large number of transactions each and every day. So, a small amount here and there will lead to a considerable increase in your budget.
Firstly, the chargeback part is one area you need to check very carefully. Chargebacks not only refund money from a sale, but they also contain additional charges and may negatively affect the cash flow when they occur frequently. Even some disputes can arise from friendly fraud. These events occur when a customer forgets an order or disputes it accidentally.
Secondly, it’s important that you know which type of pricing plan you are on. It’s common to see restaurants on a flat rate, interchange plus, or tiered rate. Flat rate tends to be straightforward, but it ends up being very expensive. Interchange Plus will cost less on a high-volume account with its transparent pricing, but it’s much harder to understand.
Thirdly, it’s essential to have a rough idea of whether you’re being charged a fair rate based on your pricing plan. You can start by checking the summary section, but you should not stop there. The information in the summary section tells you total sales, total fees, and total deposits, but the details tell you more about the sources of the fees. Many statements group or color-code transactions, fees, and adjustments
Additionally, it’s important to match your deposits on your merchant statement with your bank statement. Every batch that you close must align with a deposit that you have received in your bank. This is a good way to identify discrepancies between a deposit that has not been recorded, a late transmission, and a mischarge. It further safeguards against any issues related to fraud.
It’s also very important that you don’t skip the important notices section, which will be at the end of the statement, usually on the last page of the document. This section will be where processors will place any notices of fee increases, changes in policy, or deadlines to PCI compliance, if applicable.
Don’t forget to examine fees closely to see any way for negotiations. The processor markup fees are a good source of income for the payment processors, and they are not fixed fees. If the restaurants have a constant flow of customers and a low chargeback level, they can probably obtain better rates.
Lastly, make sure that your merchant account is easily accessible. When there is a need to contact customer support for a charge inquiry or to complain about a problem with your transactions, they will request your merchant account number, which is why it’s necessary to have everything prepared in advance.
Conclusion
Analyzing your restaurant’s merchant statement line by line will provide you with clarity on how much you are actually paying in fees. Rather than second-guessing why you see higher fees or suspicious deposits, you will be able to pinpoint exactly what you are being charged and why.
By allowing you to detect errors in billing, scrutinize questionable charges, and make better-informed choices about your payment processing provider, having a solid understanding of your merchant statement will make it a valuable resource to protect profitability, optimize cash flow, and maintain financial control of your restaurant.
FAQs
Why should restaurant owners scrutinize their merchant statements?
It assists in identifying discrepancies in fees, billing errors, and actual costs of payment against restaurant profitability.
How Often Should Merchant Statements Be Reviewed?
It should be reviewed monthly to avoid any hidden charges.
What is the most important part of a merchant statement?
The fee breakdown section is important as it reflects the processing fees, adjustments, and additional fees applied to the
Can fees for merchant statements be negotiated?
Yes, the fees for processor markups could be negotiated, particularly in the case of steady volumes and a low chargeback business.
What should I do if I see an unknown fee?
You should immediately contact your payment service provider for a detailed explanation of the issue.