Information on Merchant Accounts,
Ecommerce and Credit Card Processing

February 3rd, 2022 by J B

Apple iPhones, a new payment terminal?

Filed in: Merchant Accounts |

Apple Inc. is said to be nearing the release of a new service that allows businesses to accept payments directly on their iPhones. This service would likely be some form of tap-to-pay using the Near Field Communication (NFC) technology built into some of Apple’s devices. Meaning an iPhone user could simply tap their iPhone or NFC credit card on the merchant’s iPhone to complete a transaction without the need for a separate card reader. This could put Apple in direct competition with other payment providers however that will highly depend on the implementation of such a service. The rollout of Apple’s new service is reported to be months away with some outlets reporting a potential beta release in the upcoming IOS 15.4.

Tap-to-pay technology has been readily available in the US for many years and cardholders continue to adopt the technology, however that adoption has not been particularly quick. From my experience, a lot of Smartphone users don’t know about, or at least don’t use NFC payments on their phones. That said the technology will continue to grow especially as more and more credit cards are released with tap-to-pay built-in.

So how does this affect merchants and the processing industry as a whole?

A lot of that depends on Apple’s implementation of this new service. If Apple makes this service proprietary and requires merchants to use it’s own payment service that would put it in direct competition with aggregators like Square. However, without functions from a traditional terminal or from a Point of Sale software, this payment functionality can only go so far. I could see where this would help ApplePay to keep pace with companies like Venmo, which has also been pushing to increase the number of businesses using its payments platform.

On the other hand, if Apple opens this service to third-party apps, and processors then it could turn the iPhone into an additional payment device for existing businesses by utilizing their existing payment service to process the transaction. That sort of setup would benefit aggregators as well as full-service payment processors while helping drive ApplePay adoption. For merchants, it would allow them to keep their existing payment systems in place and easily add their iPhone or maybe even iPads as a card reader enabling more payment acceptance options without additional hardware.

While this second scenario is not likely, judging by Apple’s track record, it’s also not completely outside the realm of possibilities. Apple has yet to really dip its toe into the acquiring side of the payment space and is likely using someone else’s network to facilitate its transactions. Meaning it might be easier for Apple to act as a middleman with a service that is open for other providers to use. When coupled with the scrutiny on Apple and other large tech firms releasing a new open service would doesn’t seem completely out of this world.

Don’t get me wrong, it’s very unlikely this will be the case. Apple is likely taking a step into payment processing at some point in the foreseeable future and this would be an easy starting point to build from.

So what would adoption look like?

Assuming this system isn’t going to be open to existing payment processors… If, and when, they roll out such a payment service I could definitely see quick adoption from younger entrepreneurs just starting a business or a micro business. I could also see it taking some transactions away from payment aggregators, but out of the gate, this isn’t likely to change the payments space all that much. The cardholder adoption of NFC payments just isn’t there yet. That said this is a long play by Apple, and with consistent NFC adoption by consumers, I think this sets the stage for Apple’s eventual entry into the merchant acquiring side of the payments industry.

Apple is definitely capable of coming into the processing side of payments. I imagine they have no problem even if it costs them tens of millions per year as long as it fits their long-term strategies. That said, without additional payment devices and business management software I think this service will likely become an additional payment option for businesses and consumers in an ever-expanding payments space.

January 6th, 2022 by J B

Another 5 Ways to Lose Money Through Your Merchant Account.

Filed in: Merchant Accounts |

  1. Not Reviewing Deposits

Most merchants think that as soon as they run the card funds are guaranteed.  Unfortunately, there are many reasons why funds may not make it to your account when you expect them to.  While most of these are extremely easy to resolve many merchants don’t catch the fact that they are missing funds until weeks down the road.  Most of the time when there is a funding delay is pertaining to a bank holiday, but sometimes it could be related to batch issues, device issues, or risk-related issues and need to be addressed as soon as possible.  When you see a deposit, issue contact the processor immediately and they will work with you to get the issue resolved.

2. Improperly handling returns

When returning money to a customer it’s important to return those funds the same way they were received.  It is also important that you use the correct device option, so you use the most cost-effective way of returning those funds.

Many merchants will accept a credit card payment and later if there is a return, they will pay the customer out in cash.  This opens the merchant up to dispute as there is no proof the customer ever received such a refund.  You also need to think about how you return funds through your payment device.

One option many merchants overlook is the void option.  If a return is due on the same day of the original transaction you can void that original transaction instead of processing a return.  A void deletes the transaction from the batch which keeps the funds from moving from the cardholder’s account to the business.  If funds never move the issuer and processor don’t charge the percentage rate on that transaction, saving the merchant money.  If the original transaction has already settled, then the only option you have remaining is processing a return which works as the opposite of a sale.

3. Not using current processing technology

If you are still swiping all your transactions, you are leaving yourself open to disputes.  When swiping transactions, a business has little to no protection against stolen credit cards.  Any stolen card accept may generate a chargeback that is unwinnable by the merchant.  This was not always the case, as before EMV swiping was the most secure way to process a credit card.  These days as more and more card processing technologies become mainstream it’s important to use the most secure methods you can.  Also accepting a wide range of transaction types also allows you to serve the highest number of customers.  You do not want money to walk out the door only because you couldn’t accept their form of payment.

4. Not using the best payment option for the transaction

Many businesses out there accept credit and PIN debit transactions without thinking about the underlying cost structure of each card type.  It’s assumed by many that Pin debit transactions are always cheaper than processing a debit card as signature-based credit.   That said this is not always the case, and many merchants could save quite a bit by being selective about which network they process their payments on.  Its starts with reviewing your statement and getting a better understanding of how you are charged for each card type.  Under a certain dollar amount, one way will be more cost-effective than the other.  Once the transaction amount is higher than that dollar amount it becomes more cost-effective to process the sale on the alternative network.  Which way is best for your business is going to come down to how you are being billed for Credit and Pin Debit.

5. Not changing accounts types based on business volume

There are a couple of primary merchant account types available these days.  There is an aggregator base merchant account and a fully underwritten merchant account.  The aggregator-based accounts generally have low to no monthly or annual fees but come with a higher flat price per transaction.  The fully underwritten accounts will have monthly and annual fees but also include lower transactional costs and personal service.

Depending on your business’s processing volume one of the account types will be more cost-effective than the other.  In general, if you’re processing an average of $2,000 per month consistently, or $24k per year even if seasonal you are better with a fully underwritten account as far as cost is concerned. 

I have seen businesses processing less than $1,000 per year who won’t let go of their fully underwritten merchant account even though it’s costing them through the nose.  On the other hand, I have seen companies processing $50k+ with an aggregator account paying 30% more than they should annually.

There is something to be said for staying with what is familiar, but you should at least know what that is costing your business.   Once you know what the cost difference is you will know if it’s worth it to you to keep with what you are doing on try something else.

December 15th, 2021 by J B

How Fraud Affects Businesses

Filed in: Fraud, Merchant Accounts |

Everyone loves the holidays, but with the holiday rush, traveling employees, and chaos of busy schedules, it is very easy for fraud to fly under the radar, especially for small businesses.  But fear not!  We are here to explain to you how fraud works so that you can be proactive in protecting your business from it.

What is Return Fraud?

One of the biggest types of fraud that affects small businesses during and after the holidays is return fraud.  Return fraud is “an online scam that occurs when a person purchases an item from a retail store with the intent to return it immediately or use duplicate receipts to get money back.”  These sneaky fraudsters use the company’s return process against itself to acquire extra money, gift cards, or benefits from items.  With Christmas and New Years being over, many people try to return things they do not want.  And the heavy influx of in-store traffic and returns around and after the holidays makes it that much harder to catch this type of fraud.  To protect your business from return fraud, you need to know the different types and how to combat them.

Price Tag Swap

Price tag swap involves a customer swapping the price tags of two items to buy the more expensive one for a cheaper price or to receive more money back from the return of a cheaper item.  This type of fraud is very prevalent in self-checkout, which has become commonplace in many businesses. 

Solution: Preventing this fraud can be difficult, but it can be reduced by using price tags that are difficult to remove, which means avoiding stickers.  Also, have employees double-check items at check out.

Returning Shoplifted Items

With this type of fraud, a person takes an item from the store and tries to return it either without a receipt for in-store credit or with a fake or duplicate receipt for cash. 

Solution: To reduce this type of fraud, all you have to do is require a valid receipt when people try to return items– no returns without receipts.  Also, have employees mark the receipts when the item is returned so it cannot be reused.

Rent and return

This fraud is very common for clothing.  It involves buying an item, using it once or twice, then returning it.  This is very common for things like formal dresses and suits because they are generally used for a few occasions, most of which do not involve them getting dirty or messed up.

Solution: To help prevent this from occurring, companies can use price tags that make clothing difficult to wear without removing the tag.  Employees must also closely examine returned objects before accepting them back.


Shoplisting is where a person finds an old receipt or picks up someone else’s receipt and uses it as their own personal shopping list.  They, then, walk around the store picking up items listed on that receipt and try to return the new items to get money back. 

Solution: The only way to stop this other than keeping a close eye on suspicious customers is to set a time limit for returning items.  That way, people cannot use old receipts for as long.

Receipt Fraud

The final return fraud we will talk about is receipt fraud.  This is where people steal or reuse old receipts to return items for profit.  People may use copied, stolen, or reused receipts. 

Solution: Stick to using the SKU’s on receipts.  If the SKU on the receipt does not match up, do not allow employees to accept the return. 

Return fraud is rampant around the holidays, and it can cost your company BIG TIME if you are not proactive in combating it.  It is important to have a strict company return policy to stick to.  Make sure you are protecting your business from fraudsters’ devious schemes.

September 30th, 2021 by J B

5 Advanced Processing Options That are Much More Affordable Than You Think.

Filed in: Merchant Accounts |

There are many ways to accept payments and some are more cost-effective than others.  Here is our list of 5 ways to accept payments that are generally much cheaper than most businesses expect.  Here we are going to focus on the monthly costs.  Keep in mind most of these do have an additional transaction fee that is part of the overall billing.  That said those fees are generally pennies per transaction and if they increase sales or operational efficiency, they will likely come at a negligible cost.

  1. Recurring Billing

Many businesses feel that Recurring Billing on credit/debit cards or even electronic checks is the type of service that would be costly to set up and hard to manage. The truth is for most businesses it can be set up for a nominal cost and is easily managed through a web portal. Once set up, this gives merchants a wide variety of recurring billing options from totally custom per-customer to pre-configured plans, all for around $10 per month.

2. Invoicing

Invoicing allows a merchant to send out an email invoice that includes a direct link for the customer to enter their own payment details. This can be a very useful tool for most service-oriented businesses. This is another option that most merchants do not feel is within reach, or simply have not done the research into what might be available, but again this option can be set up for under $10 per month in most cases.

3. Customer Vaulting

In addition to recurring billing, vaulting offers a way to store a customer’s credit card information for later use. This is done securely through a payment gateway in what is called a vault. When thinking about storing credit card numbers, it rightfully is considered highly complex with many areas of potential loss and liability. A vault takes away most of the risk in storing customer information allowing a merchant to later charge their customer’s card for differing amounts depending on the services being sold. This is often very convenient for companies that have contracts with variable pricing and delivery dates. Using vault storage usually also allows for recurring billing through the vault, making it possible for both fixed recurring charges and variable needs-based payments without the customer having to provide their payment information after the initial entry. Using a customer vault reduces errors common with manually entering payment information while drastically decreasing the complexity and time required to store and charge a customer’s card in the future and generally costs $5 – $10 per month for the service.

4. QuickBooks integration

Quickbooks is one of the most common accounting software products in use by businesses all over the world. Intuit knows this and frequently charges exorbitant fees for its built-in processing services. Unfortunately, some versions of QuickBooks remain off-limits to developers but for others, there are options to process with a 3rd party directly through your QuickBooks program, or outside of QuickBooks, with the option of importing payments, for just a few dollars per month in software costs.

Because this service is completely dependent on the version of QuickBooks being used, please contact us with your QuickBooks product information, and we can provide options for integrating without being forced to use Intuit’s expensive processing services.

5. Full Featured Point of Sale Systems

Long gone are the days when buying or leasing a point of sale system required a second mortgage on the family business and a double-digit percentage of gross sales in annual fees just to keep the system running.

For as little as about $10 per month plus the cost of hardware, there are full-featured systems for almost every type of business: retail stores, restaurants, food trailers, counter-service, and just about everything else in between. Newer, cloud-based, point of sale services additionally have the ability to integrate hundreds of custom applications and features into a system, making even the most robust legacy point of sale system obsolete. Many systems are available for as little as around $500 for a complete hardware setup with a printer. Mobile, completely wireless POS systems are becoming increasingly common and affordable for businesses without access to the internet or reliable sources of power such as food trailers, trade-show merchants, and mobile trade services.

If you have been wanting a way to improve your business’s ability to process sales the price really isn’t an issue anymore. It is well worth taking a look at what’s out there and in most cases for penny’s a transaction you could greatly improve how you handle payments. If you are not sure where to start, feel free to reach out to our team and we will get you on the right path.

September 7th, 2021 by J B

Void vs Return and what is a Reversal?

Filed in: Merchant Accounts |

Credit card refunds are very common and happen for many reasons. There are two primary forms of credit card refunds and they are not always used correctly. Many businesses and their employees believe that a refund is a refund however, there is a huge difference between the two types and it could end up costing you money.

During the life cycle of a credit card transaction, there are two stages that a transaction can go through. The first of these is the authorization stage when the funds are reserved for the business which results in a cardholder’s account showing a “pending” charge. The second stage is a settlement, where funds have actually started moving between the issuer and the merchant’s bank account. This is why your point of sale does a daily settlement.

During the first stage, authorization, you have the opportunity to void the transaction. This allows you to effectively delete the transaction from your point of sale’s batch so that it will not ever settle. Voiding a transaction, however, does not send any additional information to the card issuer. The cardholder will still see a pending charge for two to three days. After the issuer sees that the transaction has not been settled they will release the pending amount back to the cardholder. Voiding a transaction prevents you from paying discount rates on those funds as money never actually changes hands.

Once a transaction has settled voiding the transaction is no longer an option because the funds have already started moving. Once you have settled you are likely going to be paying the discount rate for the original transaction. At this point, your only option is to refund the cardholder. A refund is basically the opposite of a sale where funds are routed from the merchant’s batch back to the cardholder’s card. The main difference in the process of a sale and a refund are point of sale devices don’t request authorization from the issuer to send funds to a cardholder. This results in the cardholder receiving a deposit on to their account a few days later.

Earlier I stated you might be paying the discount rate for the original transaction. This is not always the case. Depending on how your account is set up and the type of transaction you may actually receive a credit back on your account for the original processing fees. This is not the same from one processor to another so it’s a good idea to contact your support team and ask. It is also important to verify on your statement that you are not being charged an additional discount rate for the return amount. This is rare, but there are definitely some merchant accounts that are set up this way

So is a Reversal the same as a Refund or Return?

They sound similar, but no. A reversal is effectively a void, however, it takes the additional step of communicating with the issuer to inform them that the business is releasing the authorized amount. While this also will prevent you from paying discount fees for the transaction you will likely incur an additional transaction fee. That said, if you have the ability to process a reversal it is a better way of voiding a transaction, as it gets the pending amount released from the cardholder’s account much more quickly.

In short, if the batch is still open reserving or voiding the transaction will prevent money from moving which prevents you from being charged a discount rate on that sale. If the transaction was in a batch that has already settled then you are left to refund the cardholder.

July 28th, 2021 by J B

5 More Things to Avoid doing with Your Merchant Account.

Filed in: Merchant Accounts |

We are back again with 5 more things you shouldn’t do with your merchant account. These are additional things to void when you have a merchant account. If you missed out last 5 List feel free to review it here.

  1. Do not process refunds to other forms of payment.

Refunds should always be processed on the same form of payment they were issued on.  If a customer pays with cash, a refund should be issued with cash.  If a payment is made with credit, then the refund should be processed on the exact same credit card, the original transaction was made.  If the card has been completely canceled and a refund needs to be issued, it should be done using some other traceable method just in case the original sale is disputed. This will not completely protect the merchant, however, a merchant can at least show that the customer received a refund offsetting the original payment. It is common for cancelled cards to still accept refunds on existing transactions, so this is an uncommon situation if the original information is still available for the refund to be processed on. 

Another option is refunding to a gift card, only valid at the business issuing the refund. This clearly doesn’t work for merchants without an existing gift card program and can increase complexity in accounting, but it does allow the merchant to retain some control over where the refund will be spent. We generally see this to be most effective for situations outside of the normal refund process or timeline, although many merchants benefit from offering it to their customers, sometimes even with a bonus since the money from the refund must be spent in their establishment.

2. Do not assume an approved transaction is guaranteed funds.

Credit card transactions are not guaranteed funds. Many merchants see an approval code on a receipt and think it’s guaranteed money, but unfortunately, that is not the case. An approval is just the card issuer saying that the card is eligible to be processed by your business and that there are not any immediate issues preventing them from approving the sale. Beyond that, the deposit into the merchant’s bank account is essentially a loan until the transaction is fully settled and the opportunity for a chargeback has expired. The authorization received from the card issuer reserves funds for the merchant to collect, but if the transaction is later disputed, or the card turns out to have been stolen, even up to around 180 days after the transaction, the merchant is still obligated to return the funds to the cardholder. Ultimately, businesses are responsible for the payments they accept, and part of that responsibility is protecting themselves from bad actors as well as preventing cardholder fraud.

While there is certainly some transaction fraud that the issuer covers directly, businesses should still protect themselves as much as possible.

3. Do not ever let a customer touch your payment device.

Whether it is a countertop terminal or a POS system, your payment device should only be touched by people who need to use it and no else.  Many devices these days are designed to have cardholder interactions in which case it’s appropriate to allow the customer to complete their portion of the transaction.  In those cases, someone from the business will be setting up the transaction and will be present while the cardholder uses the device.  Outside of those cases, you should avoid anyone else touching your device.  For example, it’s possible to delete a batch in almost any terminal in less than 5 seconds or wipe the programming of the device in just a few more seconds.  Even if someone doesn’t know how to do that simply dropping your machines could cause it to enter a tampered state in which the entire device has to be replaced.  I have even heard about people trying to run off with a payment device even while it was still plugged in.  Just avoid the headache and keep your device to yourself.

4. Do not assume your batches are being funded.

Batching or settling your device is the process that finalizes your sales and starts moving money.  Just because your device has settled does not mean the funds are heading to your bank account.  There could be risk-related issues that tie up your funds, or a bank account issue that does not allow the processor to make a deposit.   There could be some rare funding issue that causes a slight delay in funding.  In any case, make sure you are checking your deposits and matching them to your batches.

5. Do not blindly rely on automatic batches.

Auto Batch is a nice utility that is mostly used in retail environments.  The issue with auto batch is that people do not verify that the batch has closed.  Like with a manual batch process your payment device should print or display the status of your batch.  Many people just glance at this status report and if something prints out, they do not think about it again.  You should always check that report to make sure it states that the batch was close successfully.  If the batch is not closed successfully funds never start moving and so you never get paid.  Un-settled batches are one of the most common causes of delayed funding, and it is a very easy delay to prevent.  So, whether you are on auto-batch or manual batch make sure you are confirming the status of each batch that is processed.  If the batch does not close contact your payment processor right away so they can help you get it resolved.

Taking a few small steps to avoid a potential misstep can go a long way. One key is to pass the information along to employees and co-workers. The more people who understand the small things the more effective you will be all around.

May 20th, 2021 by J B

5 Ways Businesses Lose Money via Their Merchant Account.

Filed in: Merchant Accounts |

Your merchant account should be something that helps you generate sales, but sometimes it can lose you money as well. Here are 5 common ways merchants lose money through their merchant account.

  1. Employee Returns

This is a form of internal fraud where employees make returns to their own credit cards while hoping to hide those returns with the day’s normal business.  This can be fairly easy to catch and remedy however you need to be reviewing your daily batches and comparing those to your transactions.

2. Return Fraud

This type of fraud is usually found in the big box businesses however it can also be applied to small and medium businesses.  Basically, it’s the act of purchasing something at a discounted cost just for the purpose of returning it to another location or business for a higher price.  Many stores will accept goods back for store credit even if you do not have a receipt.  The big box stores are hip to this trick and keep track of who is returning items and will go as far as telling customers they are no longer eligible to return items to their stores.  Smaller businesses however are sometimes more inclined to accept these returns to help build relationships with customers.  In these days of mega online stores and a multitude of discount sellers out there, it’s easy for a fraudster to take advantage of an unsuspecting business.  It can be as simple as browsing what you have for sale locally, finding that same item for half the price online, and then returning it to your store for credit.

3. Friendly Fraud

You know there is nothing friendly about friendly fraud.  This takes a special type of person to knowingly commit this form of fraud.  A customer comes to your business and makes a purchase like anyone else. Its likely that nothing will seem off about the transaction to you.  Once they leave the store is when the fraud is perpetrated.  This customer contacts their credit card company and makes specific claims against the transaction knowing it will be next to impossible for the business to defend themselves through the chargeback dispute process.  The cardholder almost instantly gets credit back on their card, and they never have to return the product.  Free stuff for them, a total loss for the business.

4. Authorization Fraud

I think of this type of fraud as what the sketchy people from #3 move up to.  It takes a ridiculously small amount of social engineering to convince most businesses into assisting the fraudster in walking out with goods without actually paying. 

How does it work?  A fraudster shops just like anyone else, and brings their items to the checkout.  Once the items are rung up they will make some sort of excuse why they need to contact their credit card company to get prior approval.  Many times, the fraudster will give you a credit card that declines when you try to run it.  The cardholder will apologize and call their “card issuer”.  After a bit of a conversation, they will then tell you their credit card company declined the transaction because the amount was abnormal, and they suspected fraud. The fraudster/cardholder may tell you their credit card company gave them an approval code that will allow the transaction to go through.  They may also hand you their phone and the “credit card company” might walk you through processing the sale.  The thing is the authorization code that is provided by the cardholder, or “credit card company”, is fake.  It will settle like any other sale, but several days to a month later the actual card issuer will dispute the transaction saying the approval code used was not issued.  At that point, the merchant is required to pay the card issuer back in full.  Meanwhile, the fraudster is long gone.

5. Not Reviewing Processing Statements

Processing statements a probably one of the last things most business owners want to think about.  If the funds are making it to their bank account, they don’t see a reason to review the statement.

The truth is processing statements are where the processor will provide notice of changes to the account.  Many times, these could be related to rate and fee increases, and while sometimes these cannot be changed that is not always the case.  Contacting your processor to ask about new fees or changes to your fees can result in you saving money.

Also, while there are systems to check account continuity things can slip through the cracks.  I have seen processing statements where the merchant was being back billed for a fee from months past, only to find that all their other statements are being back billed for the same fee.  Like someone setup, a manual back bill and accidentally set it to a recurring fee.

With a merchant statements, you generally only have about 45 days from the end of a processing month to dispute any charges before those charges are considered accepted and final.


Its not fun spending extra money or having someone steal from you. If you keep an eye on your processing statements and you transactions can easily prevent most losses. When it comes to fraud if something doesnt feel right about the sale its probably best not to accept payment on a credit card. Use your best judgement and dont get carried away by the prospect of an excessively large sales. If its out of the ordinary you need to take a step back and assess the risk of completing that sale.

You wont ever be perfectly protected from loss, but a little work today can payoff in big ways down the road.

April 20th, 2021 by J B

Is Clover Care Warranty Worth It?

Filed in: Merchant Accounts |

Did you just get a Clover point of sale, or are looking to add one to your business?  Clover offers a standard 1-year manufacturer’s warranty which is full replacement coverage for hardware defects.  Clover also has an extended warranty option that lengthens that coverage to 3 years and includes accidental damage coverage.  Clover Care can be added to your Clover device(s) at the time of purchase or any time during the initial 1-year manufacturer’s warranty.  Once enrolled in Clover Care you have no additional out-of-pocket expenses and with just one call you can have your replacement device as soon as the next day.  If you have a Clover System or are looking to add one Clover Care may be just the thing to give additional peace of mind.

Clover’s standard warranty is about what you would expect from any hardware provider.  Full replacement coverage for any manufacturing issues.  Most hardware issues are going to be noticed in a short time after setting up the system.  Once up and running for a couple of months you generally are not going to run into any major hardware failures, however, whether you run into issues small or large Clover can replace your device about day to keep you up and running.  Extending this coverage does more than just extend the standard warranty time.

Stepping up to Clover Care does add an additional 2 years to the standard warranty however it adds much more than that.  Clover Care also includes accidental coverage for the full three years, extending the original warranty’s coverage.  This additional coverage means your device can be placed up to three times with no additional fees.  Accidental coverage really increases the protections for your business by covering not sure manufacturers’ issues but also including damage caused by customers or employees.

Adding Clover Care does not need to be done only at the time of purchase.  Clover gives you the option to add Clover Care anytime during the standard 1-year manufacturer’s warranty.  This gives the business a chance to try the system and decided if that additional coverage is worth the extra cost.  For some companies, it’s going to be better to cover the risk of replacement themselves, where others might be in a situation where accidental damage is potentially more likely.  The nice thing about adding the extended coverage early is that your accidental coverage starts earlier.

Once enrolled in Clover Care you can receive up to 3 replacements during the 3-year period with no out-of-pocket costs.  Clover devices range anywhere from $350 to $1600 and deployment and shipping costs can be quite costly when looking at overnight deployment.  In contrast, Clover Care can be added for as little as $80 on some devices.  So, for one lower warranty price, you are getting up to 3 overnight replacements over 3 years.

It’s up to you if Clover Care is right for your business, but it’s certainly worth asking about pricing for your given hardware setup so you can weigh the risks and rewards of having that additional coverage.  Are things like overnight deployment at no additional cost or the extended and accidental protection worth a little more money upfront?  At this point, you should have a fairly good idea of the program and how valuable those protections are for your particular situation.  As always if you have any questions about Clover Care or any of the articles on our blog please reach out.

February 16th, 2021 by J B

5 Things to Avoid Doing With Your Merchant Account

Filed in: Merchant Accounts |

There are many great ways to use your merchant account but you should also be aware of the things you should not do with your merchant account.

  1. Do not process your own credit card.

    While running your own credit card for $1.00 or less is considered ok for testing purposes, you should not ever run your own card for an actual sale. There are several issues with running your own card, but the most common one is a business owner trying to loan money to their business. This is a violation of not only your processing agreement, but also the card issuer rules, and in certain circumstances may be outright illegal. Even if you legitimately need to make a purchase from your own business, there is no way for the payment processor or issuer to confirm the validity of that transaction, nor to assess the risk of the individual transaction. If you need to make a purchase from your own business, pay by cash, check, or ACH directly between your bank accounts.
  2. Do not accept payments on another person or business’s behalf.

    There may be times when you are asked to accept payment for goods or services provided by another party to whom you will pay with some other means. Or maybe someone you know just needs to accept one payment and does not want to open a merchant account. There are many reasons why you might be tempted or asked to accept a credit card payment for someone else, however, never do it. Once you accept that payment, you retain all the liability for that transaction. Also, fraudsters use this tactic by paying with a stolen card and getting the business that accepted it to pay them cash. When the chargebacks start coming in the business retains the responsibility but the fraudster is long gone with the actual money.

    Another slightly less common but still prevalent tactic used by some fraudsters is to get multiple companies to take some of their transactions for a fee. They are almost always doing illegal business and have been banned by card associations, so are turning to tricking other business owners into mixing just a few of their illegal transactions in with the business’s legitimate ones, to avoid detection by card associations. This risk for accepting these can very quickly turn from just monetary chargeback risk to actual crimes such as fraud and money laundering, depending on the transactions being mixed in with the legitimate ones. Do not ever agree to mix in someone else’s transactions with your legitimate ones.
  1. Do not operate multiple businesses through your account.

    Running more than one business through a single merchant account can be a receipt for disaster, even if those businesses are similar and your own. Each merchant account is underwritten for a specific business with its own set of risk profiles. Two or more businesses being operated out of the same merchant account can affect how a risk department reviews your account against what it was underwritten for. Maybe you are doing a much higher volume than would be expected out of a single business, or maybe one business has much higher average tickets than the other. Inconsistencies like this will raise flags that your processor will have to address. Also, if something negative happens to one business the funds of the other could now be in jeopardy. If you had a merchant account for each business, then issues with one account don’t immediately affect the other’s ability to process payments.
  2. Do not run your eCommerce and retail sides of your business through the same merchant account.

    Similar to number 3, if we break the payments industry into 3 very general business types: Retail, Restaurant, and Ecommerce, each will have unique risks, even if they are all the same business. For example, a retail brick and mortar store that has an eCommerce site is just one business, however, the retail side of the business has different risks than the eCommerce side. Likewise, a restaurant with either a retail section or an eCommerce store would want to keep each business type separated so the one account isn’t taking on the risks of all of the account types. This makes sense for accounting purposes in addition to avoiding tripping up and potentially affecting all areas of a company’s processing capabilities if something goes wrong on one account.
  3. Do not process any payment where the approval(authorization) code was not obtained via your terminal or your processor’s authorization center.

    This is an extremely common fraud technique. A customer enters a business claiming to have an approval code from their issuer that needs to be entered into the terminal for the payment to be accepted, sometimes they even pretend to be on the phone with them obtaining an authorization code after the first transaction declines.

    Almost 100% of the time this is an outright fraud attempt, however, there have been times when the cardholder legitimately seems to obtain an approval code.

    But, what should you do?

    Do not accept the authorization code!

    Even if the cardholder did somehow legitimately obtain such approval, if it does not originate through your processor, then there is no electronic or paper link to the specific sale taking place. If your processor didn’t give you the code, you do not have authorization for the transaction, full stop.

    We’ve seen more fraud attempts and actual fraud losses from merchants taking authorization codes from their customers and forcing a transaction through, than all other forms of fraud against merchants combined.

    Also never call the number on the back of the credit card to try and obtain an approval code, only get one from your processor. The customer’s card issuer should not give you one regardless, and if they do, there is still no link to an authorization with your processor which is required to properly settle the transaction and required in the case the customer requests a chargeback. The only two ways you should ever obtain an approval code is electronic via your terminal / payment device during the normal sales transaction or via your processor’s automated voice authorization system. That is it, no other means of obtaining an authorization should be honored.

While you may have already done some of these things without consequence that doesnt mean you should continue. Its similar to playing with fire. Hopefully this quick list will help you avoid some common mistakes an prevent you from having to work through the negative results.

July 30th, 2020 by Evan V

Avoiding Equipment Leases

Filed in: Merchant Accounts |

There is a reason we typically do at least one article a year regarding equipment leases and why we think they are a bad idea in most cases. It is simply because they are still prevalent in the industry, and merchants are still being sold on something they don’t fully comprehend until it is too late. Paying incrementally can be a major benefit for many businesses for equipment purchases, but at what overall expense? There is a fine line between an acceptable loss on a deal, and being taken for a ride that doesn’t end. Sometimes with some simple searches, a couple of phone calls, a merchant can save countless headaches and a similar number of dollars


It seems like a simple concept and makes sense in some circumstances. I mean around 1 out of 4 people choose a leasing option for their vehicles, why not on their processing equipment?

Most people have an idea about how much a car is worth. People know that a 2020 Ferrari is going to cost more than a 2010 Honda Civic. The same is not always true about processing equipment especially when it comes to used value.

The typical reason that merchants get caught up in leases is simply that they don’t know the equipment’s value.  Some sales agents push lease, and many use it as an option for their potential customers. But those potential customers don’t always understand what they are getting into with a lease.

Example:  A sales rep is setting up a merchant business, and the business needs two credit card terminals. The sales rep explains for just $29.95 per month, we’ll install and set up two VX-520’s and include a lifetime warranty. The merchant, not knowing anything about this equipment may think $29.95 a month is a fine deal at first. Then down the road, the merchant looks online and finds that same VX-520 selling for under $200. Its easy realizes that with the 48-month lease, they will be spending at least double what they could have paid for the same equipment. Then they try to cancel their lease and return the equipment only to find its uncancelable.

This example may seem unlikely to some, but unfortunately, it is not. We have come across this situation and much worse many times. By simply knowing the value of the equipment being leased or purchased, a merchant can get a good understanding of what kind of deal they are getting.

Getting out of an Equipment Lease

The simplest answer is you don’t. Signing a lease is essentially like taking out a loan for the processing equipment. The merchant is agreeing to pay back the value of the equipment agreed upon, at the designated terms. Every contract will be structured differently, but this is really where the fine print comes into play. If it is within a certain time, some equipment leases have an opt-out clause which will let you get out of the agreed lease. Sometimes an equipment lease will also have a buy out clause, which will enable a merchant to buy out the lease agreement for a lesser or perhaps even a larger sum than the total cost of the lease.

No Deal Grunge Rubber Stamp Over A White Background, Vector ...

There is no easy or desirable answer to get out of an equipment lease agreement. If a merchant decides to simply stop paying the lease, in all likely hood the lease will accrue penalties and be pushed to collections. It is entirely possible the lease company will seek to resolve the dispute in court depending on how much is owed on the lease. To put it best; don’t agree to a lease if you don’t know the value of equipment and are not prepared to pay the total amount agreed upon.

Other Options

Before going through signing up an equipment lease, it would not be a waste of a merchant’s time to explore other options. Many processors will work with their merchants and sometimes break up charges of the equipment if a merchant does not want to go through a lease agreement.

Do the math on how much the equipment really costs and ask if it is really worth upgrading or changing equipment. Essentially look at every other possible option before even considering going into a lease. Because once you’re in, you’re in.

Leasing Summed Up

It is of note, not all leasing agreements are a total rip off. Sometimes on higher-priced equipment or under reasonable terms it can be very beneficial for a merchant to investigate leasing options. The purpose of this article is to encourage research, both for the value of equipment and the terms of the lease. The processing industry has taken a very positive turn of full disclosure, and trustworthy services when compared to its initial procession. Please don’t hesitate to contact us at the Merchant Store with any questions or concerns.

The Merchant Store, 800-937-3850