Most of the nation’s merchant accounts operate in a high-risk area. It’s not something that you should worry about. It just means that you run the risk of having chargebacks. What the heck are chargebacks you ask? Simply put, they are refunds that went awry.
Let’s explain that
Pretty much any business you know of will have refunds. The Merchant Account servicers prefer that you take care of refunds before the customers call and ask the bank for the money back.
Their reasoning behind that is; that the merchant account servicer is responsible for the refund if the merchant can’t pay it back. That causes a real nervous condition for them. But they have a way to deal with it that is totally not unreasonable.
A high-risk merchant account is nothing more than one that might have high chargebacks. And those can be dealt with in-house, so to speak. Take care of your customers. They deserve the very best customer service. After all, they chose YOU to do business with and they should have your respect. In return, take care of them. Doing so does two things; One, you will have a customer for life. And secondly, they will spread the word.
Dealing with the chargebacks
As you begin your high-risk merchant account, they will have a holdback or reserve for your chargebacks. Just in case one slips by, this money will cover any issues. Do not rely on it, for you don’t want it to be used at all. After your three to six-month trial period is over, they relinquish that money, in full, back to you. In the meantime, you have that awesome customer service going on. No one should slip by you and you have all those customers taken care of.
If you do get a chargeback, follow through with the customer, and find a way to make them happy. Send them the money yourself, or a coupon for something better. Get them taken care of. You don’t want to be in TMF jail. That is when you have blown a bunch of chargebacks and you didn’t take care of your customers. Not a pretty sight. Your merchant account will be closed and you will never have an account with that servicer again. A terminated merchant file, TMF, will set you off for five years. That’s a jail that will not make you money. Don’t go there.
As for the high-risk merchant account
You were smart enough to have the idea about doing business, so do it right. Take care of your customers; they are always right, no matter how wrong they are. They are the lifeblood of your business. Run your business with that attitude and you won’t fail.
And remember, a lot of the businesses across our nation are in the high-risk pool. That movie theater that you love, the airline you fly with, and even some of the grocery chains. So don’t fret, you have a great thing coming your way. If you have a business to run, go do it and do it great!!!