Merchant Category Codes (MCCs): What You Need To Know

Merchant Category Codes (MCCs): What You Need To Know

Merchant category codes (MCCs), or merchant classification codes, are a four-digit identifier that describes the type of goods or services a business provides. The codes, their meanings and classifcation are set by the International Organization for Standardization (ISO). Credit card processors, however, are the ones responsible for assigning each of the codes to a business or merchant. The codes are also used by banks in determining how to award cash back or points to consumers who shop at these establishments.

What Are The Different Merchant Category Codes?

There are hundreds of merchant category classification codes, most of which are shared between the four major card networks -- Visa, Mastercard, Discover and American Express. The IRS publishes a complete list of MCCs on their website, though slight variations may exist from network to network. The codes are assigned to each establishment based on the type of goods or services they sell or provide.

Each code consists of four digits. In most cases, the MCCs get very specific. For example, there are codes for different types of contractors — plastering (1740), electrical (1731), and heating (1711) to name a few. Because there are hundreds of different codes, we choose to not display them on this guide. However, some of the most popular codes include the following:

Merchant Category CodeDescriptionExamples
5411Grocery StoresD'Agostino, Fairway Market, Whole Foods
5999Miscellaneous and Specialty Retail StoresBath and Body Works, Banana Republic
5541Service Stations7-Eleven, Exxon Mobil
5812Eating places and RestaurantsTGI Friday's
5814Fast Food RestaurantsMcDonald's, Burger King, Subway
5912Drug Stores and PharmaciesCVS, Duane Reade, Walgreens
5941Sporting Goods StoresNYC Racquet Sports, Sports Authority
5942Book StoresBarnes & Noble

A company has the right to apply for a new MCC through a technical committee formed by ISO, called TC68. However, your business needs to typically have at least $10 million in annual revenue to be considered. Currently, some of the largest hotel, airline and car rental companies are the ones with their own reserved merchant code. You can see a few examples of those listed below.

Code

Merchant
3640Hyatt Hotels
3504Hilton Hotels
3058Delta Air Lines
3066Southwest Airlines
3435Value Rent-a-Center

How To Look Up A Business' Merchant Category Code

The best way to find a particular company's merchant category code is to use Visa's website here. You can search for businesses in one particular geographic area, or narrow your search down to a specific company name. You are only required to provide some sort of address (supplier address), though this can be as broad as a zip code. Note that searches by a company's name must be somewhat exact. For example, a search for "Subway Restaurants" will not return any results. The official name of the company does not contain the word "restaurant", so you need to be careful about this when performing a search.

Visa's MCC Lookup Tool.

Visa's tool also allows you to look up merchants with specific merchant category codes. Simply select that option under the MCC field.

Why Do MCCs Matter?

Though they may not seem like it at first, merchant category codes play an important role for both businesses and consumers alike. In this section, we explain why that's the case for each party.

Why They Matter to Business Owners

For businesses, MCCs have a direct relationship with the credit card processing rates you may be quoted. Transaction rates and fees are often decided by the industry a business operates in. A higher risk industry, such as travel, will cost you more per transaction than a retail clothing store.

As a business owner, your firm is assigned an MCC the moment you begin processing credit card transactions. When you register with a payment processor, you will be asked to fill out some details about the types of goods or services you sell, and this information will be then used by your merchant bank in assigning you a code.

Merchant category codes are also important to business owners since they can help remind their customers about a particular sale on a bill, thus preventing a chargeback. For example, if your company name doesn't ring a bell when a customer is examining their monthly statement, but your merchant category "hotel" shows up right next to it, that may help them recollect what the charge was for. If neither the name nor the category code looks familiar, the customer may request a chargeback, believing the charge to be fraudulent.

If you believe your company doesn't have the proper merchant category assigned to it, contact your merchant account provider or payment processor. They will instruct you on what you can do in your particular situation.

Why They Matter to Consumers

Credit card issuers collect multiple MCCs and group them under a common umbrella, such as "travel", "dining", or anything else they desire. These groupings are used to determine how many reward points or cash back you earn on a given transaction. For example, a credit card that provides 2% back at grocery stores may only give you 2% cash back at merchants categorized under code 5411.

Some people erroneously believe that rewards are calculated on a purchase-level, instead of a merchant level. This is incorrect. For example, if you were to purchase groceries at a 7-Eleven location with a 2%-grocery cash back card, you would not get 2% cash back. That is because 7-Eleven stores are typically classified under the Service Stations merchant category code, 5541.

Ultimately, the decision how multiple MCCs are grouped together belongs to the discretion of the card issuer. We've come across consumers who've had success convincing customer service lines that a particular purchase should have belonged to a different merchant category. However, these are the exceptions rather than the rule. Banks are within their right to have final say on how many points or cash back is awarded for a particular purchase.

Yowana is a former product analyst at ValuePenguin, specializing in credit cards, rewards programs and travel. He previously covered mortgages, banking and insurance for the website. Yowana graduated from Columbia University with a B.A. in Political Science.