purchase price plus a higher fee of 42 cents. On the same $300 purchase it results in $8.40 fees tothe credit card processor, an expense that quickly eats away at profits, driving up the price of everything customer's buy.Credit card companies and banks use the excuse, for charging higher rates because, they consider transactions typed in, not electronically read to pose a greater risk of fraud. The higher fees areintended to cover the cost of "charge-backs," a refusal to pay by credit card holders either because the card use was unauthorized or the purchase was returned or was defective. Higher rates do not provide a merchant any sort of protection program.An example: Jehv Gold, the owner of Manhattan Fruitier, a gift-basket company, learned thelimits of his protection the hard way. When a customer called to order two gift baskets, thecharges were authorized, initially. When the same customer called a third time, however, thecompany's terminal read "pick up card," a phrase indicating that the card was invalid. ManhattanFruitier rejected the order. At the end of the month, the company's bookkeeper discovered thatthe customer's first two charges, totaling $1,000, were also denied and thus charged back to themerchant, even though the baskets had already been delivered. When the bookkeeper approachedthe company's payment processor, Global Payments Inc., he was told that Global would notabsorb the loss. Merchants typically have no recourse for fraud, unless they had taken severalsteps to verify the customer's identity, including verifying that the billing and shipping addressesmatched. Some larger companies are able to afford insurance against such fraud, but not thesmall business owner who struggles to make ends meet and hopefully see a profit at the end of the year.Major credit card companies are currently seeking to change things, essentially requiring personal identification numbers to be punched in whenever a credit card is used or a kind of smart chip inside credit cards. Visa already has Verified by Visa, while MasterCard hasSecureCode and American Express uses an address verification program to protect merchantsfrom fraud. We have yet to see their true benefit or if merchants will have to pay yet a higher cost for accepting credit cards.Finding the best deal on leasing a credit card processing (swipe) terminal is another aggravationfor retailers who are trying to set up credit card terminals. Leasing fees vary widely from $20 amonth to $60. Those lucky few who do a lot of shopping around may be able to find a companythat charges no monthly fee whatsoever. But, one thing is clear, no one should pay the higher fees some companies charge and by looking around should get a lease for $20 a month, becausethey are out there.Merchants who try to save by not accepting any credit cards whatsoever pay in other ways. Somany customers anymore use a credit card for all their purchases for the benefits, such as to rack up frequent-flier miles or on cash back programs. So, customer's may not shop at a store thatdoes not accept credit cards. What customers don't realize, they are actually paying for theserewards, even if they don't see a fee themselves or pay off their credit card each month.