6 Tips to avoid merchant account hold and freeze problems
Retail stores and online shops should monitor their merchant account properly to know the cash flow. Since a merchant account is necessary for processing card transactions, it is very important to know more about the operations in detail. This will help a lot to run a business in the markets with ease. The merchant accounts may face some problems and a business should know how to deal with them from different sources. Freezing and holding a merchant account can result in various complications that require more attention.
Here are some tips to avoid merchant hold and freeze problems significantly.
1. Selecting the right type of processor
A merchant service provider offers direct agreements and third-party agreements for clients when it comes to card transactions. However, businesses that are having high-risk merchant account need a specific agreement for approving card payments. Therefore, it is necessary to know the options available with a merchant services provider that will help make the right decision. This will help a lot to avoid account holding and freezing to a large extent.
2. Sticking to expectations after setting them
A payment processor wants stability and expects a merchant to maintain a consistent volume of transactions. Making more money and transactions will influence the holding and freezing of a merchant account. Retail stores should disclose their average transaction size and volume when they want to process card transactions. Any suspicious activity can affect the operations and business owners should avoid the same to reduce unwanted problems.
3. Minimizing chargebacks
Excessive chargebacks can lead to freezing and holding of a merchant account. Sometimes, they may even lead to termination and businesses should consider avoiding them efficiently that will help overcome complications. It is wise to offer gift products and other services to lower chargebacks.
4. Credit card fraud prevention
Credit card fraud is a major issue that affects both consumers and merchants in many ways which results in financial losses. Online businesses should focus more on preventing credit card fraud with safety measures to ensure high protection. Those who want to know how to prevent credit card fraud should seek support from a merchant services provider which paves ways to eliminate hold or freeze problems. Another thing is that it contributes more to grow business in the markets with high success rates.
5. Misrepresenting a business
Merchants should sell products or services with honesty to avoid freezing and other issues to a large extent. A merchant services provider assigns a merchant category code (MCC) which monitors the products sold by a store in the markets. Hence, misrepresenting a business will lead to account termination as soon as possible.
6. Using an account for multiple businesses
Using a merchant account for multiple types of business can lead to holding, freezing, and termination. It is wise to work with a reputed merchant services provider to know more about the account in detail. This, in turn, gives ways to safeguard a business from potential threats that will help ensure peace of mind.