Keep Your Merchant Provider in the Communication Loop to Significantly Minimize Your Chances of Having An Issue With a Big Launch
bret ridgway
When you set up a merchant account in order to accept credit cards, you’re typically required to provide information such as what will be your average ticket price, what your high-ticket price will be, and what you expect your monthly sales volume to be.
Your provider will monitor your account to see that you’re staying in or near the original numbers you specified when setting up your account. If you suddenly process orders way outside your “norms,” then warning bells go off with your provider and they tend to get a little nervous.
So, let’s say your normally process $30,000 per month through your merchant account. Then you do a new product launch and sell over $1,000,000 of a product within just a few days. Don’t you think that’s going to raise a few eyebrows in the offices of your merchant account provider?
You bet it will. Your provider doesn’t know what you’ve done to generate all that extra money, and they’re concerned about their potential liability. What can they do? They can free a large portion of your money for up to six months to make sure they’re covered in the event of heavy refunds or chargebacks.
Or, they can cut off your account entirely and you’ll lose your ability to process credit cards. We once had a fulfillment client who neglected to inform their merchant account provider of a new product launch and suddenly had their account turned off mid-launch. It cost them hundreds of thousands of dollars in sales!
Armand tells the story of how years ago his first big online “home run” generated $4.2 million in sales within just a few weeks. And then how he had $2 million of that money “hijacked” by the merchant account provider for six months because the volume was way outside the norms.
He eventually received all his money, and I’m sure we’d all like to have this kind of a problem. But what if you had affiliate commissions to pay and production and shipping costs to pay that totaled up to more than half of the money you took in?
You’d have, at a minimum, a real embarrassing situation on your hands.
Be sure to keep in close communication with your merchant account provider prior to any new product launches. If you keep them in the loop, you’ll significantly minimize your chances of having problems like this occur.
