5 Tips for High Risk Merchants 2024

Posted: March 8, 2018 | Updated: February 26, 2024

5 tips for high risk merchants

5 Tips for High Risk Merchants

If your business is considered high-risk, it can seem impossible to find a payment processing company that will accept you. The truth is getting merchant services when your business is risky isn’t as difficult as it may seem. The key is taking steps to improve your chances before you apply for a high risk merchant account and working with a company that specializes in potentially risky businesses. The following tips can help you get approved for a merchant account and minimize your costs, whether you accept credit cards online or with a credit card machine.

#1. Be Upfront With the Processor
Don’t make the mistake of trying to lie or misrepresent your business when you apply for merchant services. If you do not fully disclose the services or products you offer, the credit card processing company will find out anyway. Your merchant account will probably be closed without notice and your business will be disrupted. If you are honest and work with a reliable processing company, you can still qualify for merchant account services.

Remember: getting a high-risk merchant account isn’t a bad thing; it just means the payment processor knows the risks associated with your business and is prepared for certain issues like higher-than-average chargebacks.

#2. Provide Previous History
If you have had a merchant account before, provide your previous processing history when you apply for a new merchant account. This will allow the processor to review your history and make an informed decision. Even if you have been denied service or dropped in the past, you can still find a payment processor who will work with you.

#3. Renegotiate Later
If your business is new, you will probably have a more restrictive account with higher terms because you do not have any processing history. You can renegotiate your reserves, rates, and other terms with your processor in a few months once you have sufficient history to review.

#4. Manage Chargebacks
A high chargeback ratio is one of the most common reasons for a high-risk merchant to have their account closed. The good news is there are several steps you can take to prevent chargebacks and address them before they become a problem. You can keep your chargeback ratio low by:

  • Making your refund policy clear on the receipt. Make sure you direct customers to contact you directly if they are unsatisfied rather than contacting their credit card issuer. A clear refund policy can also help you win invalid disputes.
  • Look for red flags that indicate fraud. You may require information that a hacker or thief is unlikely to have, such as the card CVV and address verification to make sure the billing address matches the card issuer’s provided contact information.
  • Use a chargeback alert system to alert you to chargebacks. This will give you 3 days to issue a full refund before the chargeback is initiated.
  • Send follow-up emails or a confirmation phone call after sales to confirm a customer is happy.

#5. Choose the Right Processor
There are many choices for high-risk merchants today, but they are not equal. Just because your business is considered risky does not mean you can’t qualify for excellent customer service and quality payment processing service. Make sure you choose the right processor by selecting a company that handles PCI compliance without cancellation fees and costly term commitments. A high-quality processor will guarantee to not increase your markup rate later.

At Host Merchant Services, we understand how important card processing is to your business. No matter what type of business you operate, your volume, or your past processing history, we offer top-rated merchant account services to help your business grow.

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