Summer camps, snow removal and vacation services are only active for a small portion of the year. They require the ability to accept payments during those few months, but most processors  will charge them a monthly fee or have the merchant reapply each year. Is there a better option?

Come the seasonal merchant account, which is custom-made for this purpose. There is no need to pay unnecessary fees or waste time on the application process each year. Credit checks, which potentially lower one’s credit score, do not have to performed each year. Additionally, if a merchant had credit problems during the year, it could prevent the merchant account from being opened entirely, or force them to get set up with a more expensive service. Unfortunately, past processing history does not entitle a merchant to the same service in the future. A seasonal account prevents these issues entirely.

The seasonal account allows a merchant to “press pause” on their account as opposed to a “hard stop”.  This way, the account is ready whenever the business needs it and all that needs to be done is send the processor a re-opening letter.

However, there are several things to keep in mind:

An article by American Express offers some solid advice on precautions retailers should take to prevent losing business if unscrupulous customers claim they never received delivered orders.

Small businesses are generally hit hard by chargeback fraud. Aaron Press, Director, Payments & eCommerce for LexisNexis said, “We do know that small merchants invest less in fraud protection and are more likely to be defrauded because they have fewer ways to catch things in the process, And fraudsters know this.”

If your business receives too many chargebacks, aside from losing valuable, you can potentially damage your standing with the processing bank. If the chargebacks continue, you may even lose your merchant account and face difficulties finding another service provider.

Here are some tips on how to avoid chargebacks altogether:

According to PCI standards, a merchant may never store lists with customer’s card data on any medium which is not PCI compliant. Word documents and spreadsheets, even if they have a strong password, are not PCI compliant, and thus may never be used to store lists with card info. Even if you create a custom program with many levels of security, it is still not PCI compliant.
(The exception to this regulation would be to store the info of one card on a piece of paper. However, multiple numbers are never allowed, even on paper)

An owner or stakeholder of a company should never swipe their personal card at their business. This is considered a cash advance and is prohibited by the Card Association guidelines, established by Visa, Mastercard, Amex and Discover.

If a merchant processing bank fee or charge is ever returned for insufficient funds, the processing bank will become concerned. Their reasoning will be that if the merchant doesn’t have coverage for a small fee, how would they be able to recover from a large potential chargeback?