Are You a High Risk Merchant? [3 Awesome Things You Can Do]
High Risk Merchants
One kind of business or merchant that some payment gateways charge high fees is the “high risk merchant.” So what’s a high risk merchant? Are you a high risk merchant? Read on please.
High Risk Merchant Accounts
High Risk merchants are businesses that sell things that payment processors, credit cards and banks consider to be risky. Generally if you’re selling something in the list below you are considered a high risk merchant. The items in the list below includes porn, travel and “make money opportunities.” These three things are very different so why do they end up in the same list? Quite simply these things either have (1) high chargebacks and refunds or (2) it is an industry that makes people squeamish and borders on the illegal. We will explain the following to you:
How to make your business less of a risk
What you need in your website
How to find the best deal for payment processing
What are Chargebacks? How is this associated with being a high risk merchant?
Chargebacks are when your customer requests a refund from their credit card because of a problem. Normally this means that your customer requests their bank to give them a refund. The customers bank does not simply give a refund. There is a process that is followed. You, the merchant, can dispute the customer’s request. We will go into more detail about chargebacks. But for you now you should know that high chargeback merchants and high chargeback businesses are considered high risk.
List of High Risk Merchants (This is not a complete list.)
- 1-800 type chat sites
- Pornographic merchants
- Automotive brokers
- Business opportunities
- Casino, gambling or gaming
- Check cashing services
- Cigarette or electronic-cigarette sales or nicotine cartridges
- Credit or debt repair
- Credit counseling
- Credit protection
- Debt consolidation
- Drug paraphernalia
- Fantasy sports websites
- Financial planning
- International merchants
- International shipping
- Poor credit
- Prepaid debit cards
- Tour operators
- Travel services
- Travel agencies
- Travel clubs
- Vacation planners
- Vacation rentals
- Vitamin and supplement sales
- Weapons of any kind
- How to manage your high risk merchant business
If you are a high risk merchant you need to run your business very tightly. Here are the things that you need to do:
Monitor chargebacks carefully work to reduce them. One of the best ways is to make it easy for customers to get refunds. Tell your customer how to get refunds and provide a 1-800 telephone number to call Have your refund policy in your website. If you see a lot of refunds on a product or service you need to change or stop selling it.
What you need in your website as a high risk merchant
Your refund policy needs to be clearly visible in your website
You need a telephone number for the customer to call and request a refund
You will need fraud protection technology to help reduce fraudulent purchases.
How to find the best deal for payment processing as a high risk merchant account
You need to shop around. Be upfront with your payment processor and tell them about your business. Also explain how you have taken steps to reduce chargebacks and fraud.