7-5 Avoiding Merchant Account Penalties

Avoiding Merchant Account Problems and Penalties

The penalties that can be imposed by a processor and/or the card associations (VISA and MasterCard) can be very scary. More often than not these penalties are brought against merchants because the merchant was unaware of the regulations or limitations on their merchant account. Protecting yourself against these penalties is not difficult, and the pointers below will help you to do just that.

Remember your processing limit and track your sales. Never forget your processing limit, and make that sure you are within your limit by tracking credit card sales each month. A good suggestion is to display your processing limit in a place where you will often see it, like on the credit card machine, cash register, or your computer. This will remind you to keep track of your volume, and will help you to avoid the headaches that come along with processing too much.

Remember you average ticket amount. Just like the processing limit, your average ticket amount can cause headaches if you break it. Write down the average ticket amount that you declared on your merchant processing agreement and display it along with your processing limit as a reminder for yourself.

Read the important notes section on your merchant account statement every month. Each month your processor will tell you about important changes to your merchant account, or the way that you are expected to use your account. They will note these changes on your merchant account statement in an "Important Bulletins" section usually located on the front of the statement. It is very important for you to read these notices each month and follow any instructions set forth.

Read you merchant processing agreement (MPA). You processor will give you a merchant processing agreement (MPA) when you open your merchant account. If you are already processing and do not have your MPA, you should request a copy from your processor. Read through the MPA and ask your merchant service provider about anything that you don't understand. The MPA will dictate how to properly use your merchant account.

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