The holiday season is right around the corner, and everyone will be in a festive, gift-giving mood. People are ready to spend money, and your product is going to be a high-demand hit. Media, call center, and other vendor services are paid in full, and orders are streaming in.
The holiday season is your company’s own Super Bowl—a chance to win big. Nothing would be worse than to lose the ability to process payments in the middle of it.
Product marketers often see a 200 percent increase in sales or more during the holiday season. But unfortunately, few have the approved volume for payment processing. Don’t let things suddenly come to a screeching halt.
Today, even low-risk, high-volume marketers that sell items for $19.99 plus S&H find staying under a 1 percent chargeback rate challenging. Most of these marketers don’t consider themselves high-risk, and are experiencing chargeback issues they haven’t seen for 20 years.
Many also win most of their chargeback cases. That’s great, but those chargebacks still count against your total—and if you are over 1 percent, you lose. It’s heartbreaking: Loyal merchants who have spent decades with payment processors lose all ability to process customer payments.
The Best Time to Apply
To head off such problems and handle spikes in seasonal sales, merchants should apply for extra merchant accounts—and they should do so when sales are on the upswing and there is more than three months of payment-processing history. If chargebacks are under 1 percent, it’s a wonderful time to apply. An account will be welcomed when things look rosy for your business. You are in a position to ask for the lowest rates, and depending on the type of product you offer, you can request no reserve.
It’s too late to apply when chargebacks are up and your processor threatens a shutdown. Then, you can’t be approved for an additional merchant account. Why do merchants wait? Usually, it’s laziness—or they claim they’re too busy selling or dealing with other back-end issues.
Apply for a merchant account at the right time. Do it before chargebacks get anywhere near 1 percent.
Handling Unforeseen Events
All online merchants are a single unfortunate incident from having their businesses shut down. These problems may include:
- Bad affiliate traffic that causes high chargebacks, fraud, or traffic that doesn’t convert.
- An unresponsive call center that can’t handle spikes in volume. Make sure your call center answers quickly and provides refunds without hassling consumers. People love to call their credit card companies for a fast resolution, and you can’t give them a reason to do that.
- Fulfillment issues such as overbillings or poor communication regarding expected delivery times.
- Fraud caused by bad affiliate marketing traffic or stolen credit cards, which is tougher to detect.
- Upsell programs that make customers question the additional charges.
- A confusing billing descriptor. How your purchased item appears on a customer’s credit card statement matters. I recommend using your customer service phone number, website, or product name.
Don’t get Scrooged this holiday season. Make sure your merchant accounts are in order.
Photo by Feelart/FreeDigitalPhotos.net
Curtis Kleinman is Chief Operating Officer at Swipe Payment Solutions.
The above originally appeared in the September-October 2016 issue of ER magazine.