merchant service fees are they expenses or cost of goods sold?

then why when I complete the company interview does QB set up the Merchant account fees as a Cost of Good Sold Account?

They most certainly are COGS and it is unnerving that the QuickBooks merchant services automatically puts it in as an expense, causing me to do journal entries...Good Question!

The most certainly are COGS and it is very disturbing that the merchant services that Intuit provides ...automatically enters it in my clients accts as an expense and then I must do journal entries to fix it.  I have to do their taxes, and what the prior woman said is absolutely wrong.

 Hum, I can see both.  I see it as a COGS because it's an expense incurred to sell that product.  However, would it be a COGS if it is for a service?  I would think it would be an expense if it is for a service because service based businesses are not manufacturing a product.  Your thoughts?

I have the same problem, I just started the QuickBooks Merchant Services, and you are not given the option to set the fees to be automatically tracked by any of my Cost of Goods Sold accounts. I MUST choose an expense account. Very dissappointing QuickBooks.

 COGS is defined as all costs required to get an item on hand, or make an item for sale

merchant card fees are not a requirement, they are optional, they are not COGS

Ah, yes, when I typed my response, I wasn't thinking retailers.  Thanks for pointing that out.  I guess I would expense merchant fees like myrkrn1 said about typically being expensed.  I don't think I would have thought to add them as a COGS or COSS. 

Could you elaborate as to why this would be under COGS?