A Complete Guide to Merchant Category Codes

A Complete Guide to Merchant Category Codes

Merchant category codes affects both merchants and consumers. What is this mystery number and how does it affect your business or you personally? It’s a number that’s more important than you may realize. It affects merchants and consumers. Keep reading to learn why you should understand MCCs, whether you own a business, or just love to use reward-based credit cards.

What is a Merchant Category Code?

A merchant category code is an IRS required 4-digit code that classifies a business. Even if a business sells more than one item (most do), the business will have a classification that signifies the majority of what they sell. In other words, stores have just one code, even if they sell multiple items. For example, a grocery store that sells other ‘unique items’ will still classify as a grocery store, in most cases.

What is a Merchant Category Code?

The payment networks assign businesses the merchant category codes (Visa, MasterCard, American Express, and Discover). Each network may have their own ‘tweaks’ to the codes, but they are all similar in the end. The payment networks assign the number when the merchant sets up a payment system. The banks that issue the cards don’t assign the codes and have no control over them, so it doesn’t help to ask your bank what code they’ll assign you.

There are literally hundreds of merchant category codes, but some of the most common include:

Again, there are hundreds of codes, some of which are a derivative of the larger codes. How a network classifies you depends on what the majority of your business consists of and how you manage it.

Why Should Merchants Care About Merchant Category Codes?

Payment networks assign the codes, but they affect merchants in big ways. The acquiring banks and PSPs use the codes to determine your risk level, which in turn, determines how much the bank and/or PSP charges you for payment processing.

More specifically, merchant category codes affect your business in the following ways:

  • Your merchant category code determines your interchange rate. This is the wholesale price charged to process credit cards. The ‘riskier’ your business, meaning the higher risk of chargebacks and fraud, the higher the interchange rate you pay. This is just the start of what you pay for credit card processing.
  • If they categorize you as a ‘risky’ business with the given merchant category codes, certain acquiring banks may turn down your application for credit card processing. Not all businesses can have credit card processing, especially those involved in anything illegal or incredibly risky.
  • You may have higher ‘add-on’ fees to the interchange rate if your MCC signifies you are in a high-risk category, especially one with high chances of fraud. Credit card processors take take on credit liability when approving you for credit card processing, so they must be careful.
  • You may want a different classification for credit card reward purposes. Even though it’s consumers that benefit from the credit card rewards, as the merchant, you may get more traffic if they classify your business as a certain category that many consumers earn rewards for (such as a grocery store or gas station).
  • You may qualify for special rates with the right merchant category codes, such as charity and non-profit programslarge ticket processing programs, or special business to business and purchasing card interchangecategories.

While you can’t arbitrarily change your merchant category code, the more informed you are, the better opportunity you have to make sure it is correct. If you know ahead of time that you’re classified as a ‘risky business’ you can prepare yourself. Maybe you can change how you structure your sales, or emphasize a certain line of business so that the networks don’t see your business as risky.

Your credit card processing fees directly affect your bottom line. It doesn’t matter if you bring in more sales by offering credit cards, if the processing costs more than expected it can hurt your company, so it pays to know.

How to Find your Business’s Merchant Category Code

If you didn’t ask the network what your MCC is when you opened your account, you may not know what it is and that’s okay. You can still find it by calling your payment services provider and asking what it is. If you don’t agree with it or wonder why, ask questions. You may be able to petition to have it changed, but the requirements vary by provider. Ask for details regarding how you can change it or what must change for you to get the ‘better’ code.

Here is a list of all the important Merchant Category Codes (Alphabetically)

Accounting, Auditing, and Bookkeeping Services8931
Advertising Services7311
Air Conditioning and Refrigeration Repair Shops7623
Amusement Parks, Carnivals, Circuses, Fortune Tellers7996
Antique Reproductions5937
Antique Shops – Sales, Repairs, and Restoration Services5832
Aquariums, Sea – aquariums, Dolphinariums7998
Architectural – Engineering and Surveying Services8911
Art Dealers and Galleries5971
Artist’s Supply and Craft Shops5970
Automated Fuel Dispensers5542
Automated Referral Service (For Visa Only)9700
Automobile and Truck Dealers (Used Only)5521
Automobile Associations8675
Automobile Parking Lots and Garages7523
Automobile Supply Stores5531
Automotive Body Repair Shops7531
Automotive Parts, Accessories Stores5533
Automotive Service Shops7538
Automotive Tire Stores5532
Bail and Bond Payments9223
Bands. Orchestras, and Miscellaneous Entertainers (Not Elsewhere Classified)7929
Barber and Beauty Shops7230
Betting (including Lottery Tickets, Casino Gaming Chips, Off – track Betting and Wagers)7995
Bicycle Shops – Sales and Service5940
Billiard and Pool Establishments7932
Blueprinting and Photocopying Services7332
Boat Dealers5551
Book Stores5942
Books, Periodicals, and Newspapers5192
Bowling Alleys7933
Business and Secretarial Schools8244
Business Services, Not Elsewhere Classified7399
Buying/Shopping Services, Clubs7278
Cable and other pay television (previously Cable Services)4899
Camera and Photographic Supply Stores5946
Candy Stores5441
Car and Truck Dealers (New and Used) Sales, Service, Repairs, Parts, and Leasing5511
Car Rental Companies ( Not Listed Below)7512
Car Washes7542
Card Shops, Gift, Novelty, and Souvenir Shops5947
Carpet and Upholstery Cleaning7217
Charitable and Social Service Organizations8398
Chemicals and Allied Products, Not Elsewhere Classified5169
Child Care Services8351
Children’s and Infant’s Wear Stores5641
Cigar Stores and Stands5993
Civic, Fraternal, and Social Associations8641
Cleaning and Maintenance, Janitorial Services7349
Clothing Rental – Costumes, Formal Wear, Uniforms7296
Colleges, Junior Colleges, Universities, and Professional Schools8220
Commercial Equipment, Not Elsewhere Classified5046
Commercial Footwear5139
Commercial Photography, Art and Graphics7333
Commercial Sports, Athletic Fields, Professional Sport Clubs, and Sport Promoters7941
Computer Maintenance and Repair Services, Not Elsewhere Classified7379
Computer Programming, Integrated Systems Design and Data Processing Services7372
Computer Software Stores5734
Computers, Computer Peripheral Equipment, Software5045
Confectionery Stores5441
Construction Materials, Not Elsewhere Classified5039
Consumer Credit Reporting Agencies7321
Correspondence Schools8241
Cosmetic Stores5977
Counseling Service – Debt, Marriage, Personal7277
Court Costs, including Alimony and Child Support9211
Dairy Products Stores5451
Dance Halls, Studios and Schools7911
Dating and Escort Services7273
Dentists and Orthodontists8021
Department Stores5311
Direct Marketing – Catalog and Catalog and Retail Merchant Direct Marketing – Outbound Telemarketing Merchant5965
Direct Marketing – Catalog Merchant5964
Direct Marketing – Continuity/Subscription Merchant5968
Direct Marketing – Insurance Service5960
Direct Marketing – Not Elsewhere Classified5969
Direct Marketing – Travel Related Arrangements Services5962
Direct Marketing -Inbound Teleservices Merchant5967
Discount Stores5310
Disinfecting Services7342
Doctors and Physicians (Not Elsewhere Classified)8011
Door – to – Door Sales5963
Drapery, Window Covering and Upholstery Stores5714
Drinking Places (Alcoholic Beverages), Bars, Taverns, Cocktail lounges, Nightclubs and Discotheques5813
Drug Stores and Pharmacies5912
Drugs, Drug Proprietors, and Druggist’s Sundries5122
Dry Cleaners7216
Durable Goods, Not Elsewhere Classified5099
Duty Free Store5309
Eating places and Restaurants5812
Electric Razor Stores – Sales and Service5997
Electric, Gas, Sanitary and Water Utilities4900
Electrical And Small Appliance Repair Shops7629
Electrical Parts and Equipment5065
Electronic Sales5732
Elementary and Secondary Schools8211
Employment Agencies, Temporary Help Services7361
Equipment Rental and Leasing Services, Tool Rental, Furniture Rental, and Appliance Rental7394
Exterminating and Disinfecting Services7342
Family Clothing Stores5651
Fast Food Restaurants5814
Fax services4814
Financial Institutions – Manual Cash Disbursements6010
Financial Institutions – Manual Cash Disbursements6011
Financial Institutions – Merchandise and Services6012
Fireplace, Fireplace Screens, and Accessories Stores5718
Floor Covering Stores5713
Florists’ Supplies, Nursery Stock and Flowers5193
Freezer and Locker Meat Provisioners5422
Fuel – Fuel Oil, Wood, Coal, Liquefied Petroleum5983
Funeral Service and Crematories7261
Furniture, Furniture Repair, and Furniture Refinishing7641
Furniture, Home Furnishings, and Equipment Stores, Except Appliances5712
Furriers and Fur Shops5681
GCAS Emergency Services ( For Visa Only)9702
Glass Stores5231
Glassware/Crystal Stores5950
Golf Courses – Public7992
Government Services ( Not Elsewhere Classified)9399
Grocery Stores5411
Hardware Equipment and Supplies5072
Hardware Stores5251
Health and Beauty Shops7298
Hearing Aids – Sales, Service, and Supply Stores5975
Hobby, Toy, and Game Shops5945
Home Supply Warehouse Stores5200
Household Appliance Stores5722
Industrial Supplies, Not Elsewhere Classified5085
Information Retrieval Services7375
Insurance Premiums, (no longer valid for first presentment work)6381
Insurance Sales, Underwriting, and Premiums6300
Insurance, Not Elsewhere Classified ( no longer valid for first presentment work)6399
Intra – Company Purchases ( For Visa Only)9950
Intra – Government Transactions9405
Laundry – Family and Commercial7211
Laundry, Cleaning, and Garment Services7210
Leather Foods Stores5948
Legal Services and Attorneys8111
Lodging – Hotels, Motels, Resorts, Central Reservation Services (not elsewhere classified)7011
Lumber and Building Materials Stores5211
Mail Order Houses Including Catalog Order Stores, Book/Record Clubs (No longer permitted for .S. original presentments)5961
Management, Consulting, and Public Relations Services7392
Massage Parlors7297
Meat Provisioners – Freezer and Locker5422
Medical and Dental Laboratories8071
Medical Services and Health Practitioners (Not Elsewhere Classified)8099
Medical, Dental Ophthalmic, Hospital Equipment and Supplies5047
Membership Clubs (Sports, Recreation, Athletic), Country Clubs, and Private Golf Courses7997
Membership Organizations ( Not Elsewhere Classified)8699
Men’s and Boy’s Clothing and Accessories Stores5611
Men’s and Women’s Clothing Stores5691
Men’s Women’s and Children’s Uniforms and Commercial Clothing5137
Metal Service Centers and Offices5051
Misc. Food Stores – Convenience Stores and Specialty Markets5499
Misc. General Merchandise5399
Miscellaneous and Specialty Retail Stores5999
Miscellaneous Apparel and Accessory Shops5699
Miscellaneous Home Furnishing Specialty Stores5719
Miscellaneous Personal Services ( not elsewhere classifies)7299
Mobile Home Dealers5271
Money Orders – Wire Transfer4829
Motion Picture Theaters7832
Motion Pictures and Video Tape Production and Distribution7829
Motor Home and Recreational Vehicle Rentals7519
Motor Home Dealers5592
Motor vehicle supplies and new parts5013
Motorcycle Dealers5571
Music Stores, Musical Instruments, Piano Sheet Music5733
News Dealers and Newsstands5994
Non – Financial Institutions – Foreign Currency, Money Orders (not wire transfer) and Travelers Cheques6051
Non-durable Goods, Not Elsewhere Classified5199
Nurseries – Lawn and Garden Supply Store5261
Nursing and Personal Care Facilities8050
Nut Stores5441
Office and Commercial Furniture5021
Office, Photographic, Photocopy, and Microfilm Equipment5044
Opticians, Optical Goods, and Eyeglasses (no longer valid for first presentments)8044
Opticians, Opticians Goods and Eyeglasses8043
Optometrists and Ophthalmologists8042
Orthopedic Goods Prosthetic Devices5976
Package Stores – Beer, Wine, and Liquor5921
Paint and Wallpaper Stores5231
Paint Shops – Automotive7535
Paints, Varnishes, and Supplies5198
Pawn Shops and Salvage Yards5933
Pet Shops, Pet Foods, and Supplies Stores5995
Petroleum and Petroleum Products5172
Photofinishing Laboratories, Photo Developing7395
Photographic Studios7221
Piece Goods, Notions, and Other Dry Goods5131
Plumbing and Heating Equipment and Supplies5074
Podiatrists and Chiropodists8049
Political Organizations8651
Postal Services – Government Only9402
Precious Stones and Metals, Watches and Jewelry5094
Professional Services ( Not Elsewhere Defined)8999
Protective and Security Services – Including Armored Cars and Guard Dogs7393
Quick Copy, Reproduction and Blueprinting Services7338
Radio Repair Shops7622
Record Shops5735
Recreation Services (Not Elsewhere Classified)7999
Recreational and Utility Trailers, Camp Dealers5561
Religious Goods Stores5973
Religious Organizations8661
Repair Shops and Related Services – Miscellaneous7699
Schools and Educational Services ( Not Elsewhere Classified)8299
Security Brokers/Dealers6211
Service Stations ( with or without ancillary services)5541
Sewing, Needle, Fabric, and Price Goods Stores5949
Shoe Stores5661
Shop Repair Shops and Shoe Shine Parlors, and Hat Cleaning Shops7251
Snowmobile Dealers5598
Sporting and Recreational Camps7032
Sporting Goods Stores5941
Sports Apparel, Riding Apparel Stores5655
Stamp and Coin Stores – Philatelic and Numismatic Supplies5972
Stationery Stores, Office and School Supply Stores5943
Stationery, Office Supplies, Printing, and Writing Paper5111
Stenographic and Secretarial Support Services7339
Swimming Pools – Sales, Service, and Supplies5996
Tailors, Seamstress, Mending, and Alterations5697
Tax Payments9311
Tax Preparation Service7276
Telecommunication Services including but not limited to prepaid phone services and recurring phone services4814
Telegraph services4821
Tent and Awning Shops5998
Testing Laboratories ( non – medical)8734
Theatrical Producers (Except Motion Pictures), Ticket Agencies7922
Tire Re – treading and Repair Shops7534
Tourist Attractions and Exhibits7991
Towing Services7549
Trailer Parks and Camp Grounds7033
Truck and Utility Trailer Rentals7513
Typewriter Stores – Sales, Rental, Service5978
Used Merchandise and Secondhand Stores5931
Variety Stores5331
Video Amusement Game Supplies7993
Video Game Arcades/Establishments7994
Video Tape Rental Stores7841
Visa Credential Service ( For Visa Only)9701
Vocational Schools and Trade Schools8249
Wallpaper Stores5231
Watch, Clock, and Jewelry Repair7631
Watch, Clock, Jewelry, and Silverware Stores5944
Welding Repair7692
Wholesale Clubs5300
Wig and Toupee Stores5698
Women’s Accessory and Specialty Shops5631
Women’s Ready – to – Wear Stores5621
Wrecking and Salvage Yards5935

How Does the MCC Affect Payment Processing?

What it comes down to is the price you pay for processing. As a merchant, you want the lowest processing costs, right? If you’re lumped into a category that’s high risk, you may not get the best processing fees available. Businesses should know and care about the merchant category code and inquire how to get it changed if you don’t agree with it. Your processor can tell you exactly why your business is in a specific category, and if it’s something you can fix, go ahead and do that so you can get the lower rates.

At Host Merchant Services, we always do our best to apply the most advantageous code allowed for your business, and will offer advice if small changes can make a big difference for your business. Don’t forget if your business changes direction, but remains open with the same processor, your code remains the same. If you change direction, consult with your processor about your MCC. Should it change? Will it benefit you to change the code? Will you get lower fees?

Why Should Consumers Care About Merchant Category Codes?

It makes sense why businesses should care about their merchant category code, but what’s in it for consumers? It comes down to credit card rewards. If you use credit cards often to earn rewards, such as cash back, airline miles, or travel benefits, you want the most for your spending, right? Sometimes you may spend at a store that you think earns you rewards when it actually doesn’t. That’s a problem.

Here’s how to fix it.

Find out the Store’s MCC

Here’s how it works. Your credit card rewards you 3% back for every dollar you spend on groceries. You go to a store that isn’t categorized as a grocery store, but you buy groceries. You assume you’re getting your 3% cash back only to find out you didn’t. Why? The store must have a different merchant category code than a grocery store. Because credit card rewards rely on the merchant category codes, you won’t get rewarded even though you bought what you thought fit into the category. So how do you find out a store’s MCC before spending money?

You can try the Visa Supplier Locator. After you enter your location and the type of category or the name of the store you’re looking for, you’ll see the code. If the code doesn’t coincide with the rewards, you won’t earn your rewards no matter what you buy there.

Problems Consumers Have with Credit Card Rewards and MCCs

Even shopping at a store with the correct MCC may not give you the rewards you expect. What gives? It could be for a few reasons:

  • The store has multiple locations. Think of a store like Target. There are ‘regular’ Target stores and then there are ‘super’ Target stores. The ‘super’ stores are grocery stores and the regular stores aren’t. How do the payment networks classify each location? Are they both grocery stores is one a discount store? This could vary by location too; it’s not a blanket policy countrywide.
  • Certain purchases may be excluded. Credit card companies can exclude certain purchases from their rewards, even if the purchase is at a store within the right category. It sounds complicated but read the fine print. For example, buying groceries at a store that really isn’t a grocery store may be excluded.
  • You misunderstood the rewards. It happens. Sometimes we just misunderstand what we need to buy or do to get the rewards. Sometimes something as simple as buying a product through a third party rather than directly through the store is enough to knock off your rewards. For example, buying your groceries through Instacart rather than right from the grocery store may not trigger the rewards.

The merchant category code affects everyone involved in the credit card transaction, not just the merchant or just the consumer. The merchant is affected by the credit card processing rates and the consumer is affected by the credit card rewards or lack thereof depending on the code.

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