Here’s the deal. When you apply for a merchant account, the merchant account company is scared to death that you are someone fraudulent. They are afraid you are going to sell fake trips to Cancun Mexico and then take off with the money which they have to refund. So, what do they do? They make you jump through hoops to get the Merchant account in the first place and then they watch your account closely in the beginning.

They are watching for the number of sales you make to be sure it looks normal. They also watch very carefully for chargebacks. If you have only a few sales and many of them are chargebacks they will probably cancel your account immediately. They will watch for unusually large sales compared to your average…..they may even withhold giving you the money until they are absolutely sure something fishy isn’t going on. . . . We’ve heard of them holding money for up to six months and there’s not much you can do about it.

We’re not trying to scare you off from getting a merchant account. We’re just trying to make sure you know what you’re up against. As soon as you get a good track record going with the merchant account i.e. lots of sales, relatively few refunds and a tiny percentage of chargebacks, then they pretty much leave you alone unless they see some weird spike in sales.

With that in mind if you do plan on doing a big promotion that will bring in way more than your average amount of sales, it’s a good idea to talk with your merchant account in advance so they don’t red flag your account and cause all your sales to be declined.

Another thing to keep in mind with regard to online sales has to do with Guarantees. People savvy with writing ad copy will tell you that the longer guarantee you have, the more sales you’ll make and we, for the most part, agree. When you’re a new merchant this concept just doesn’t fit. All merchant companies have maximum lengths they allow for guarantees. If you promote a guarantee that’s longer than what your merchant company allows, they cancel your account. They are worried you will make outrageous guarantees that you aren’t financially able to support. If you go out of business, the merchant account company has to make the refunds. THEY DON’T LIKE THAT!

To be ready to get an online merchant account you will need:

•A business checking account (merchant accounts will not deposit into personal checking accounts)
•All your account numbers handy
•An operating professional looking website/blog
•Terms of Service (You can look at other websites for samples that you or your attorney can adapt)
•Refund policy (You can look at other websites for samples that you or your attorney can adapt)
•A PCI Statement on file. (This is a new bunch of paperwork and online technology you have to have to show how you protect your customer’s personal information. Note: takes care of most of this technology for you.

The big three that you need are Visa, MasterCard and American Express. Sometimes you can throw in Discover Card as well if you feel like it. You most likely won’t lose a sale because you only take three credit cards.

Filed under: internet marketing

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