Skip links

Ways Businesses Lose Money via the Business Merchant Account

When it comes to running a business, making sure that your merchant account is in good shape and isn’t losing you money is critical. Unfortunately, there are a few ways that businesses can lose money via their merchant account. In this article, we’ll look at several of the most common ways businesses lose money via their merchant account.

Credit Card Chargeback

A chargeback occurs when a customer disputes a charge on their credit card statement, and the credit card company sides with the customer. This can be for several reasons, such as if the product or service wasn’t delivered, wasn’t what was expected, or if it was simply purchased fraudulently.

Employee Returns

One of the most common ways businesses lose money via their merchant account is through employee returns. Employee returns occur when an employee takes an item they bought with their own money and returns it to the store for a refund or store credit. This can be a big problem for businesses, as employees can often take advantage of the return policy and return items that they never actually purchased. To avoid employee returns, businesses should put in place a return policy that is fair but also restrictive enough to prevent employees from taking advantage of it.

Friendly Phishing

Another common way businesses lose money via their merchant account is through friendly phishing. Friendly phishing occurs when an attacker sends an email to a business that looks like it’s from a trusted source, such as a vendor or supplier. The email asks the recipient to click on a link or open an attachment, which will then allow the attacker to steal the recipient’s login credentials. To protect themselves from friendly phishing attacks, businesses should always verify the legitimacy of any email they receive from a trusted source before clicking on any links or opening any attachments.

Friendly Fraud

Another way businesses can lose money via their merchant account is through friendly fraud. Friendly fraud is when a customer purchases something with a credit card, but then later disputes the charge with the credit card company. This is often done as a way to get free products or services, and it’s becoming more and more common.

Authorization Fraud

Businesses can also lose money via their merchant account through authorization fraud. Authorization fraud occurs when an attacker uses stolen credit card information to make unauthorized purchases. This can be a big problem for businesses, as they can end up losing a lot of money if the credit card information is used to make multiple purchases. To protect themselves from authorization fraud, businesses should use strong authentication methods, such as two-factor authentication, to protect their credit card information.

Failure to Review Processing Statements

Finally, businesses can also lose money via their merchant account through failure to review processing statements. Failure to review processing statements can lead to businesses being charged for transactions that they never actually made. This can be a big problem for businesses, as it can end up costing them a lot of money. To avoid this, businesses should always review their processing statements to make sure that they are only being charged for transactions that they made.

How to Avoid Losing Money via a Business Merchant Account Due to Fraud

Most business owners understand the importance of having a merchant account to accept payments for their goods or services. However, many may not be aware of the risks associated with using a merchant account, including the risk of fraud.

Fraud can occur in several ways, including by someone using a stolen credit card to make purchases, or by an employee who steals from the business. Fraud can also occur when criminals use malware to steal credit card information from customers.

Fortunately, there are several things business owners can do to help minimize the risk of fraud and protect their business and finances. Some steps include:

-Using secure payment processing solutions that encrypt credit card information

-Regularly monitoring account activity for suspicious behavior

-Using fraud prevention tools, such as filters or rules, to help identify potentially fraudulent transactions

-Educating employees about the risks of fraud and how to spot it

-Having a solid incident response plan in place in case of a data breach

By taking these precautions, business owners can help reduce the risk of fraud and protect their business.

Not only can business owners lose money through their merchant accounts due to fraud but there are merchant account providers that can provide the wrong type of account for individual business needs.

How to Avoid Losing Money by Having the Wrong Merchant Account

If you’re like most business owners, you want to avoid losing money in any way possible. One of the easiest ways to do this is by choosing the right merchant account. Unfortunately, many business owners don’t take the time to research their options and end up with a merchant account that doesn’t offer them the best rates or services. This can lead to lost profits and even closure of your business.

So, how can you make sure you avoid losing money by choosing the wrong merchant account? Here are a few tips:

  • Do your research.

Don’t just go with the first merchant account provider that comes your way. Take some time to compare rates, services, and fees.

  • Ask around.

Talk to other business owners to see who they use for their merchant account and what they think of the provider.

  • Read reviews.

Take a look at online reviews to get an idea of what other customers think about a particular merchant account provider.

  • Ask the provider questions.

Don’t be afraid to ask the provider questions about their services, rates, and fees. This can help you make an informed decision.

  • Make sure the provider is reputable.

Check to see if the merchant account provider is accredited by the Better Business Bureau or another reputable organization.

By following these tips, you can be sure to choose a merchant account that will best meet your needs and help you avoid losing money.

Looking for a Reliable and Trustworthy Merchant Account Provider

Balanced Processing Partners are the leading consultants, service providers, and payment processor providers.  They offer a broad network of financial professionals to help you analyze your merchant account needs. 

Interested in learning more feel free to reach out to us at (800) 354-6256 or via email at [email protected].