A business specializing in laxatives, enemas, or irrigation products for colon cleansing, may have difficulty securing a merchant account. Major providers may have already turned you down or quoted you high fees due to your industry’s unfortunate “high-risk” label. This is a term that makes most financial institutions quake.
If this label has you confused and frustrated, you’re not alone. One thing you can do is gain knowledge as to why your business is considered high-risk. Learn how you can overcome roadblocks to opening your colon cleanse products merchant account. Also, find out the things you can do to help increase your chances for approval.
Why Is My Business Considered “High-Risk”?
It may seem odd that an industry dedicated to improving its customers’ health should be considered high-risk. The fact is that most alternative medical techniques have different effects on different people. Whether from a person misdiagnosing the cause of his or her symptoms, wrong or inconsistent usage of a detox supplement, or variation in how the individual responds to the treatment, there will be people who believe they have gained great benefit from your product and people who think they have received no benefit at all. Consequently, colon cleaning products are charged back more frequently than “low-risk” products, costing the processing company more money.
While there are bad apples in every barrel, there are unfortunately also an above-average number of fraudulent merchants in the alternative medicine industry, as well as honest merchants for whom the business never gained traction and failed early, sometimes with a negative balance. All of these factors contribute to your company being considered “high-risk,” even if you have no previous bad credit card history.
Does This Mean I Cannot Get a Colon Cleanse Product Merchant Account?
The good news is that even if you’re a high-risk business, you can still get a merchant account. This is excellent news indeed, since without a merchant account you could not process credit or debit cards or accept ACH payments. These are essential activities for a thriving online business. Even if many major banks and credit card processing companies have declined you or demanded outrageous fees to offset their risks, you have options. Companies such as E-Commerce 4 IM specialize in helping high-risk verticals. They have the experience and connections necessary to offer you merchant services at an affordable price.
What Does the Process Look Like?
Merchant service providers use several key risk indicators to evaluate companies that specialize in colon cleanse products. These include the length of time your company has been in business, your past credit history (including your business’ credit score), the amount of negative feedback you have received, your marketing practices (since overstated promises and deceptive marketing are a primary reason for chargebacks), and your business’ overall financial health.
What Can I Do To Improve My Chances Of Obtaining A Colon Cleanse Products Merchant Account At A Good Rate?
Financially healthy companies are always more likely to receive merchant accounts. A few ways you can contribute to the overall health of your business include:
Maxing out your available credit hurts your credit score. This is one of the key factors credit card processing companies consider when assessing the real risk your business presents. Ideally, you should only use 10-20% of your available credit and keep as much of the balance as possible on a single card.
Timely bill payments also goes a long way toward developing a positive credit score. This reassures payment gateways that you are a responsible business.
High-risk businesses are known for excessive chargebacks, so minimizing the number of contested credit card payments is essential.
When you appear to promise things you cannot deliver, customers often become angry or disillusioned with the product. No matter how many other beneficial results they may have obtained, they may demand a refund or charge back their card. This may happen because they did not achieve the same result you promised.
The TMF or Terminated Merchants File list is a database that identifies merchants who have had their credit card processing accounts flagged for illicit activity. These include money laundering, excessive chargebacks, fraud, identity theft, or illegal transactions. It is also accessed by Visa and American Express, so being on this list is the equivalent of being on a shared blacklist that is circulated among most major credit card companies. If you are not already on this list, keep your business dealings honest and avoid high chargeback rates to. If you do end up on the list, contact your merchant services provider to find out why. Often, they can help you to fix your reputation if you are on the list erroneously.
Finally, when searching for a credit card processor, you should not only consider the state of your own business, but the state of your potential service provider’s. A good provider will never charge you hidden fees and will work with you to get you started, keep you supported, and help you grow. If you’re looking for such a company, we invite you to check out E-Commerce 4 IM to see how we can help your business. We are experts in servicing customers that require colon cleanse products merchant accounts.