Merchant Account Volume Limitations

When you apply for a merchant services credit card processing account, one of the questions that you answer is about your credit card payment processing volumes (you'll see it on our application, too). You are asked to give your estimate on the average sales amount, as well as your expected monthly volume. It is important that you answer these questions to the best of your ability, even though it can be hard to give precise figures, especially if you have a new business. Credit card processing companies use this information in their evaluation process, in order to place your business in the correct processing category. It all has to do with estimating the probability of generating customer disputes and chargebacks. Please refer to our "Chargeback Methodology" article for details on that issue. The higher the probability of generating disputes, the higher the premium that you will pay for your credit card processing service. Some industries are typically prone to higher levels of chargebacks. Prime examples are adult-oriented websites, third party collection agencies, used car dealerships, etc.

Certain factors go across industry lines and the average sales amount is among the bigger ones. The reason is that the bigger the average sales ticket becomes, the bigger the potential chargeback amount. Even if sales take place in a face-to-face environment and the potential for fraud is minimal, consumers are much more likely to have a change of heart on a $1,500 purchase than on a $10 one. Even though small business merchant accounts will not place a cap on your credit card processing volume or your average ticket, your rates will very much depend on them.

With that in mind, merchants will be well advised to implement a set of best practices into their business' sales cycle. Make your shipping and return policies clearly visible in your marketing materials and on your website. Include these policies on the sales receipts and in the confirmation emails that you send out after an online purchase. Make available and easily accessible a phone number that your customers can dial when they have questions on a purchase they have made. Make sure that there is someone to pick up the phone and address the issues in a competent and professional manner. Simple things can make a huge difference and your bottom line will improve significantly as a result. A good credit card merchant processor will help you with this process.