Category: FAQ FRIDAYS

FAQ Friday: What to Do If Stripe Is Holding Funds or Terminates Your Account
The panic-stricken, adrenaline-induced frenzy of researching solutions about what to do when Stripe holds funds—or worse, terminates your account—has been performed by countless merchants. If that’s any reason to relax a little then take it, because it means there is a solution.

In fact, there are solutions to cover every aspect of this type of situation whether it’s with Stripe or some other processor. And most importantly, we’ll show you how to get your business back up and running with minimal impact to cash flow.

Always Remember That Stripe Is in Control

Companies like Stripe are great to get up-and-running in an instant. They’re quick to approve your account and get set up. But if you start scaling too quickly, it makes the platform nervous. And that makes them very quick to shut down businesses and force account cancellations.

3rd-party Platform Rules

Stripe.com is a 3rd-party processor similar to PayPal. That means you run on their platform and follow their rules. They have the power to control which businesses they support, which businesses they don’t, and who can continue using their platform at any given time. It’s in the user agreement when you sign up for your account. A lot of sellers see Stripe as a difficult to work with, but their terms are clear for those who read them.

They Rarely Reverse Decisions

Unfortunately, if your account is terminated or funds are withheld, Stripe will rarely reverse their decision. Your account likely won’t get reinstated and your funds won’t be returned to you right away and additional information would be required to get your funds are no longer held.

You can still try to convince them otherwise, but your efforts are better placed in opening a new merchant account with a different payment processor for your cart. You might even be able to open another Stripe account if you haven’t been blacklisted.

Why They Hold Funds

Usually, you will receive an email from Stripe saying something along the lines of “your account is closed because you violated our terms and conditions.” There’s very little detail, which might leave you wondering what you did wrong. Customer support will provide little information as well adding to the mystery.

If they hold funds or terminate your account, it’s likely because you are a high-risk merchant or have high chargebacks. Sellers of supplements, subscriptions, advice, dropshippers, and more are all considered high risk. There’s a seemingly endless list for what constitutes high-risk sellers, and Stripe doesn’t support any of them.

You Will Get Your Money Back…Eventually

It takes time to get your money back, but it will happen. This period is something we like to call the “chargeback guarantee period” because it makes up the amount of time (and then some) chargebacks will occur. This is usually 6 months, but they sometimes hold funds up to 9 months.

You can think of it like a forced reserve, where they hold money from you in case of refunds and chargebacks. That way, the bank isn’t risking their own finances because they have a pool of your funds to dip into. It helps your account avoid having a negative balance and you from paying even more Stripe fees.

If you want your money sooner, it’s possible to get some of it back before that 6-month period. Keep in mind that Stripe needs to keep a portion of the withheld funds for chargebacks and other transaction fees. Knowing this, call the Stripe support phone number a couple of weeks after receiving the initial notice and negotiate with them to return part of the funds, not all of them. Those initial weeks are a period in which Stripe is waiting to see if and how many chargebacks. Your chances of negotiating a payout schedule with their customer support team are greater if you receive little to no chargebacks.

They may not agree to negotiate, in which case you’ll get your payout in 6 months, sometimes 9 months if you are high-risk or have large amounts of chargebacks.

The Most Important Thing Is to Get Payment Processing ASAP

Don’t get caught up on resolving the issue you have with Stripe right away. You’ll likely have to wait some time before anything happens with them. And the longer you wait, the less opportunity you have to make sales. So focus on obtaining a merchant account or payment processing solution ASAP to get your store going again and start accepting card payments.

Open Another 3rd-party Account

Yes, Stripe.com is a 3rd-party processor. Yes, Stripe terminated your account or withheld funds. Yes, that could happen again. But right now, you need to get your payment gateway operational, and the fastest solution is to open another account with a 3rd-party provider, even if that means paying higher processing fees or having a longer payout schedule for your settlements. Also, consider adding ACH to your checkout for lower cost and having an alternative payment method.

3rd parties are quick to approve and get you set up fast. Getting a more appropriate payment processing solution can take a week or longer, which is a lot of time to waste in wait. A 3rd party will get your cart working so you can accept debit and credit card payments and keep your business going while you apply for more direct solutions. As a business owner, your primary goal is to ensure your ecommerce business can remain profitable and continue to accept credit card payments.

You can try reapplying with Stripe, use PayPal, or find another option—there are tons of 3rd-party processors out there. These platforms are a great first step for startups and small business owners who don’t have processing history yet, helping to get set up fast and building history. This will ensure your cashflow is not affected by waiting for Stripe to reverse their cancellation decision.

Apply to 3 Merchant Account Providers

Not 3rd-party providers like Stripe or PayPal, but 3 high-risk merchant account providers like DirectPayNet. Providers like us are an ideal solution moving forward because we understand your high-risk business, the risks associated with it, and how to get you set up for the long run.

Why 3 merchant accounts? Because there’s no guarantee that you’ll be approved. If you only apply to one, wait the week or so it takes for your application to be reviewed, and then get denied, your e-commerce store will be non-function for even longer. Now you have to do the process again and keep waiting. It’s not a good strategy when you’re trying to keep business moving.

This is important: do not apply to 3 providers that use the same bank or acquirer. Payment processing providers like us work with many banks to get you a merchant account. Make sure the bank we present to you is not the same bank another merchant services provider presents to you. When you’re presented with a bank by one team, notify the other 2 that you have been presented this one bank and therefore would like to use a different bank if possible.

Prepare an Application Package When Looking for Providers

There are a few documents and items that every payment solutions provider requests. It’s in your best interest to keep all of these documents in a folder, ready to send along to speed up the process.

What you’ll need:
- Voided check or bank letter – confirms where your funds will be deposited
- Previous processing history – download this from Stripe as soon as possible, but make sure it’s an actual statement (PDF format), not a CSV file
- Bank statements – have at least 3 bank account statements ready, one for each of the past 3 months that shows account balance and transaction history. Also, it shows your account balance which can help the application if there is positive cash flow
- Business info cheat sheet – makes it easier for processors to get at-a-glance info about your business so they can decide if your business model is supported or not in the first place
The cheat sheet speeds up the approval (or denial) process by giving providers a quick summary of your business. This way, if there is no question that they don’t support your business model, then they can deny you faster and you won’t have spent so much time applying. The cheat sheet is one single page and says what you’re selling, how you’re selling it, what type of pricing you offer, and who you’re selling it to (in the world). Therefore, you should include login info for a member’s area, a pricing breakdown if you sell a lot of products or have monthly packages, and a brief overview of your business including which currencies you require in case you need more than USD.

Again, the application package is no more than a page and should be saved in a folder that’s readily accessible. The processor might request additional information later on, but the list above makes up the essential items you need to have on-hand.

Don’t Worry About the Technical Stuff

We understand that you want your payment processing provider to work seamlessly with your cart. For example, if your store is run on Shopify, it makes sense that the payment gateway you work with connects with your cart.

There is always a solution out there, so stop focusing on compatibility and start focusing on getting a payment provider that meets your needs. If the payment solution that works best for you doesn’t seamlessly integrate into your store’s platform, we guarantee there is a 3rd-party plugin, API, or zap that will make it work. Worry more about what payment methods your store needs to accept, like debit and credit cards on popular networks like Visa and MasterCard as well as ACH, and find a processing company that can provide them.

Most payment providers will help you with this, so focus more on getting your shop going and less on the technical aspects of it.

Side note: you also don’t have to worry about subscriptions. Subscriptions can be exported by another gateway, so there’s no risk in losing subscription revenue.

What to Do When All Else Fails

If you’ve been match-listed (put on a blacklist) and cannot use Stripe, you’re not being approved by any of the merchant account providers you’ve applied to, or you’ve gone too high on your chargebacks and no one is willing to approve you, there’s still a solution. Have a licensing agreement ready.

Create a licensing agreement for your products, content, and services for affiliates to resell for you. If you have potential business partners, ventures, or affiliates, now is the time to use them. It’s not the most elegant solution and you’ll have to give them a cut (say, 80/20), but this is the last-resort option you have.

If Stripe Is Holding Funds from You, DirectPayNet Is More Than Willing to Help.

Contact our excellent customer service team for help on what to do next when Stripe withholds funds or terminates your account.

We’ll get you set up with a high-risk merchant account, answer any questions you have about next-steps, and get your business back up and running in no time.

For more info about what to do if Stripe is holding your funds, have a listen to my podcast episode discussing this in more detail on Youtube or Audio version for Apple podcast or Spotify. Click on the links to listen in!
July 9, 2021
FAQ Friday – Understanding Fees Part 2: Payment Processing Fees

As a high-risk merchant, your monthly statements will undoubtedly contain more fees than low-risk merchants. You can negotiate those fees down to zero (in some cases), while others remain fixed for the lifetime of your account. Payment processing fees fall into both categories.

Just like in the first part of this series where we informed you of high-risk merchant account fees (especially interchange fees and interchange plus pricing), here we will dive further into payment processing fees. It’s important to understand what you’re being charged with every card transaction, refund, chargeback, or even monthly. Some of these fees should absolutely be eradicated, others can be lowered significantly, and some will remain the same.

It’s important to understand all the fees from your payment processor so you know what you’re paying at the end of the month. Combine these processing fees with what you learned about discount rates, interchange rates, and tiered pricing (qualified, mid-qualified, and non-qualified) to get the full concept of processing costs.

This can also help you shop around for a better merchant account provider if you feel that what you’re being charged currently is too high or there’s no room for negotiation. Stay informed, understand your statements, and you’re sure to see an improvement on your bottom line.

The Two Types of Transaction Fees

With every transaction, you have two associated fees: authorization fee and credit transaction/sales fee. There are no set rates for each; it’s entirely dependent on the online payment processor you use. There is also a one-time setup fee your processor charges upon activation of your account.

Authorization

An authorization fee is simple. It’s a fee associated with approving the card for the transaction amount. Usually, the amount is small, maybe $0.05. It’s the fee that payment processing companies use to accept a credit card payment via MasterCard, Visa, Discover, or American Express (whatever the credit/debit card type is). This fee occurs per attempt, meaning if a transaction fails, then you still pay the fee for that failed transaction as well as any future transactions until it’s approved.

But at the end of the day, it’s just one small fee out of many that appear on your statement. With merchant accounts, there will always be an authorization fee. Speak with your processor about the possibility negotiating the price down, but don’t expect the fee to be eliminated entirely.

Credit Transaction or Sales Fee

When the transaction is authorized, there’s yet another fee you’re charged called a sales fee or a credit transaction fee if the transaction is approved. The language changes depending on your processor and the statement you’re reading, so keep in mind that “sales fee” equals “credit transaction fee”.

The flat fee can range between extremely low, around $0.05, or on the higher end, like $0.30. For context, Stripe and PayPal use flat-rate pricing of $0.30 for transaction fees (which includes the transaction authorization fee). Some credit card processors charge a flat fee for both but others have 2 separate fees. When a separate fee is charged for authorization vs sales fee, you save funds as declined transactions carry a lower cost. With Stripe or PayPal, you pay the same fee regardless of whether or not the card transaction is approved.

This is where merchant accounts shine, because you can negotiate these transaction fees and many processors charge differing amounts per transaction type. As mentioned, the rate changes if a transaction is declined or accepted. This can save you some serious cash in the end if you get repeat customers who make mistakes when entering their credit card info.

The Deal with Chargeback Fees

Chargebacks are a big part of what makes up higher risk e-commerce businesses. They are like super-powered refunds, but in a bad way. That’s because in the end, you lose the money from the sale in addition to a fee that’s $30 or more.

Chargebacks happen to regular merchants, too, so you aren’t alone in receiving a fee for one. But as a high-risk seller, your chargeback fee will certainly be a higher rate, at least initially. These charges hold zero value to you—you’ve already lost the money from the sale. Luckily, you can talk with your payment processor and attempt to lower that fee. But don’t do it right away; you need proof of good standing with your account before fees of this nature can be negotiated.

If you’re well-established (at least 6 months of working with your processor) and have consistently successful sales with a low chargeback ratio, then now’s the time to negotiate. Payment processors are much more willing to lower the cost of a fee if they see that there’s no harm to their own business. In the end, each merchant account provider is connected with an acquiring bank whose number one goal is financial security/profit. Stay in the black and your credit card processor will work with you and can start quashing those unnecessary additional fees.

Average Credit Card Processing Fees to Understand and Negotiate

Authorization, transaction, discount rate (which includes interchange fees) as well as chargeback fees are the major fees you should be aware of because they either have the largest impact or happen with each swipe at checkout (whether online ecommerce, keyed-in or at a POS). But there are many other types of fees, even some hidden fees, you can negotiate down that maybe aren’t as impactful but can still make a dent in your bottom line.

Retrieval Request

When a customer calls their bank to request information about a past or present transaction, you are charged a retrieval fee. These fees can be around $20, so not exactly cheap just to get info about a past transaction.

However, retrieval request fees don’t occur with every transaction type. If you speak with your credit card processing company, then they can inform you of what types do incur this fee (e.g., transactions over a specified amount, credit/debit card transactions that date back more than a year, etc.).

A retrieval request often acts as the preliminary action before a chargeback, building up to the refund request. A customer calls their bank, asks about a transaction, then disputes it. There’s no way to prevent a retrieval request, but you can speak with your processor about being informed when they occur. This is so you can possibly prevent a chargeback from happening by providing transaction and shipping details regarding the purchase.

Refund Fee

Not as intense as a chargeback fee but equally frustrating are refund fees. When a customer makes a standard refund, many credit card processors charge you for it. Some providers charge the same rate as a credit card transaction fee, others charge something different. You should absolutely negotiate out of this fee as there is no extra cost for processing a refund.

PCI-compliance

It’s highly recommended for you to be PCI-compliant, if you’re not, you may be subject to penalties. For non-compliance, fees are around $50 per month, which is pretty steep. It’s easier to just be PCI-compliant: your rate will lower to around $10 per month (or maybe a yearly fee), and it only takes around 30 minutes to complete. A simple quiz or scan of your website will help prevent this additional fee.

Statement Fee

This is a benign monthly fee that can easily add up to a few hundred dollars. This is why it’s so important to review your statements and question each fee that appears. You could be paying hundreds per month unnecessarily. So, if you see this fee then call your provider and negotiate it down.

Additional Fees

Other fees that you can’t do too much about include cancellation fees, high-risk fees, customer service fees, assessment fees, association fees and cross-border fees. These are fairly self-explanatory except association fees, which are charges from the credit card network (Visa, MasterCard, AMEX, or another card issuer) that appear simply because you are a merchant who accepts that type of card. Fees can also range based on your type of business or your merchant category code (MCC).

How to Handle Reserves Properly

Reserves, sometimes called chargeback reserves, are forced upon direct response merchants (i.e., supplement sellers, digital course merchants, etc.). They are a way for acquirers to feel secure about allowing you, a high-risk merchant, to use their payment gateway.

Don’t Fight Reserves

At least not right away. Because reserves are a security measure, it’s best if you accept them without much pushback. This will get your foot in the door, so in the future you can negotiate your way around them.

Ask for Capped Reserves

Most reserves are a percentage of your sales processing volume, usually around 5% or 10%. But that adds up quick. 10% of all sales every month sounds unnecessary. The bank only needs some cash reserved in case a chargeback occurs or they want a pool of money to use for fees.

Ask for a capped reserve instead of a percentage. They should be happy with around 50% of your typical monthly transaction volume. For example, if you sell $100k in a month, the ask for a cap at $50k.

Request a Repayment Plan

After 6 months, look through your statements and calculate how much money is in the reserve. If it’s twice as much (or even more) than the cap you’ve negotiated, it’s time to ask for that money to be repaid. But when you do this, don’t ask for it all at once. Instead, request a repayment plan from the bank to you.

The bank will still need a reserve, so don’t expect all the cash to come back if your account is still open.

Wrap-up of Processing Fees for High-Risk Small Businesses

Just like with high-risk merchant account fees, you should aim to understand what fees your payment processor is charging you. Many small businesses end up paying way more than what they should, but never do anything about it. So, take the time to go through your statements, speak with your provider or agent, and understand what you’re paying.

The merchant services provided by DirectPayNet keep these fees in mind. When you speak with one of our customer service agents, we’ll help you get to the bottom of your request so you can minimize fees and maximize scalability.

Speak with us today to find out more about our high-risk merchant accounts.

June 25, 2021
FAQ Friday-Part 2: Risks VS Benefits for Private Label and Drop Ship Supplement Models
In our last Friday FAQ we covered the fulfillment process and strategies for your nutritional supplements, anti-aging skincare products, and wellness products. You can watch an interview I did with Malcolm Mckinnins here about Fulfillment Strategies to Attract Customers.

This week I’m going to cover the differences between dropshipping and private labeling dietary supplement products.

In the past, starting your own high-quality supplement brand the traditional way had high costs attached to it unless you took care of most of the work yourself.

The first things to consider were your product formulations and inventory…

A supplement manufacturer will require you to buy a minimum order quantity which can be hundreds and thousands of units…

Starting costs can be between ten thousand to forty thousand dollars just in inventory. This is the only way to start working directly with a manufacturer or supplier and the risk is considered very high because there’s no guarantee you’ll be able to sell all your inventory before it expires.

Not to mention you have to find a suitable warehouse to keep your inventory safe and pay expensive monthly fees.

Branding design, product labels, digital mock-ups, and your website could easily cost you above five thousand dollars in added costs. When your product is ready to be sold, you need to think of a marketing strategy for selling your products.

Dropshipping nutraceuticals has become very popular in the last few years because of the low cost and high-profit margins in starting your own business without having to pay for ordering and storing inventory. These are not your own supplements.

This is when you or a marketer are driving traffic to your website through various marketing tactics, selling other people’s products. When someone buys a new product listed on your website, you then fulfill the order by making a purchase on the company’s website you’re sourcing the product from. You would add your customer’s shipping address and once the order is placed, the company sends the product to the consumer.

A major problem with dropshipping products is the consumer’s demand for speed. Amazon has set new expectations to the industry with free two-day shipping, having customers expect their orders to arrive within three days. Chances of chargebacks increase along with delivery times and may cause major problems with your merchant accounts. You’re considered high risk because you don’t actually touch the product and can’t control the shipping times.

Reducing Risk With Private Label Supplement Companies

White label supplement drop shipping is when you take a Nutra product or multivitamin supplement from a manufacturer or distribution house and add your own brand label to the bottles.

As a private label drop shipping business owner, you’re not required to buy a minimum amount of inventory to get started. Most private label companies manage their own ready-to-sell templates and custom formulas and keep them at their facility.

Micro-fulfillment centers were also created to cut the time it takes to deliver products to customers by strategically placing these mini-warehouses in and around major cities. The goal is to figure out quickly where your largest orders are coming from to keep the majority of your products.

Another thing to consider is, while having your private label supplement manufacturer and fulfillment warehouse close to each other can be an advantage…

The chances of a hurricane or infectious disease such as Covid shutting your supplement manufacturing and fulfillment warehousing center down increases if they happen to be in the same area.

So this is just one of the things you need to think about when planning your networks.

Most private label companies help you to create your company logos and digital mockups at affordable prices and can assist in creating your eCommerce website. You can also find a lot of private label drop shipping companies that will provide marketing and advertising support for your brand.

When you have your eCommerce website or funnel ready, the private label company will integrate it with their fulfillment center and can have you ready to launch within two weeks.

These companies will also provide customer service for your business and deal with any problems or questions your customers may have.

So when dealing with a private label drop shipping supplement company you can get some, if not all, of the following services included within the various membership plans provided:
- Unlimited products to choose from
- Low fulfillment fees
- Temperature controlled warehouse to keep your products from expiring
- Done-for-you API integration
- Automated order processing
- A dedicated support rep for you and your customers
- No minimum orders
- On-demand label printing
- A complete integrated fulfillment center
Many private label companies now offer custom formulations for customers creating a personal touch to the industry. Many companies are doing this today and standardizing the processes can help them scale better.

This can sound contradictory when trying to standardize something made to be customized for your customers…

But finding ways you can offer personalized products to your customers in a consistent way, can help increase customer satisfaction. This approach allows your customers to be more patient when receiving their orders.

As an example, some private label supplement manufacturers offer blood analysis and build your customers a personalized package based on the feedback that comes back from the lab.

Fulfillment companies have a pick and pack process ready, but to handle this kind of fulfillment more efficiently…

Knowing what your customer is ordering regularly for a repeated period of time can help you create automated systems so you can have pre-packs ready to ship out every month. As an example, this can be done with weight loss brands that recommend regular intake of Vitamin C and Vitamin D, depending on where you live.

Most customers lack these vitamins as a part of their regular diet and can be packaged and ready to ship out quickly.

In comparison to drop shipping, selling through private label products can create a long-term awareness of your brand to your customers by way of lifestyle and keeps them thinking about you whenever looking to buy these types of products.

This is important when it comes to the order fulfillment process for your customers. The sale isn’t complete until your customer receives your product and is satisfied with what’s delivered.

At this point, any way to avoid a customer from being satisfied will decrease the chances of being shut down by your merchant processing account provider.

Merchant Accounts And Payment Processing For Private Label Supplements

The most difficult and challenging part of this business model is credit card processing because supplements, cosmetics, and CBD tend to have high chargeback rates.

When it comes to finding a merchant processor for your supplement brand, many end up starting by using Shopify to set up their stores. You run the risk of losing your account when reaching a certain amount of daily orders because Shopify payments are powered by stripe…

Supplements are regulated by the credit card processing companies and payment gateways are liable for the products being sold through those accounts.

Anything flagged by the FDA or that is making direct claims is against the policy of the credit card processing industry in general, will cause problems to your merchant account…

So you have to get a merchant account and payment gateway that allows you to sell these products…

To avoid having as many chargeback disputes as possible, you want to have good communication and customer service with your clients. Clear communication with your clients by letting them know exactly what your company will be delivering and being proactive about refunds will often help to avoid charge disputes.

For example, if someone bought 6 bottles of your supplements but only received 4 bottles, the chances of that customer being unhappy and charging back increases, especially if there isn’t a clear or easy way to contact someone from customer service.

At startup, most of the time businesses try sending automated messages to avoid human contact as much as possible, but that’s not what the customer wants in most cases, and mostly prefer speaking to someone who will make sure they’re going to get the refund.

Having your phone number and business name clearly stated on your consumer’s credit card statement is one way to encourage your customer to call you instead of calling their bank.

If you’re selling multiple supplement products, your customers may not remember your overarching brand but only recognize the independent products, so having different accounts with different descriptors for each of your products showing up on their credit card statements will help in reducing the chances of chargebacks.

Problems with merchant accounts tend to have problems when reaching about a hundred orders or more a day….

While payment aggregators like PayPal and Stripe are widely used, it doesn’t mean they are the best solution for you.

To avoid the hassle, and keep providing your customers your services to keep them happy so you can start raking in the profits with a dedicated merchant account by DirectPayNet.

We have 10 years of experience in the field, securing dedicated merchant accounts for companies in high-risk industries. Trust in our ability to provide you with the payment solutions you’re looking for without sacrificing ease, security, or consumer demand. We’ll give you the details on pricing, monthly fees, transaction fees, and more to stay transparent about our payment system. Our API is easy to implement, so don’t wait–get in touch now.

Contact me today to get your dedicated merchant account up and running, and start reaping the rewards of being a brand supplement company.
June 4, 2021
FAQ Friday: Stripe Stops Processing Payments for Trump Campaign, Is My High-Risk Business Next?

In what has been a tumultuous few weeks in the US, there is a story developing that isn’t getting as much attention as it perhaps should.

In the midst of record coronavirus pandemic-related deaths, social media expulsions, and impeachment debates, not much reporting has been undertaken on Stripe’s actions. Their decision (which was later matched by fellow payment facilitator PayPal) to stop processing payments for the Trump campaign last week abruptly robbed the current White House resident of his ability to raise funds online.

Several clients have emailed us to ask whether Stripe can pull the plug on a company that fast and with very loose reasoning. The short answer is yes; they can. We’ll delve into that in a little more detail later on. But first, let’s recap the events of the past few weeks.

From Capitol Riots to Losing the Ability to Process Payments

Unless you’ve been living under a rock, you’ll have seen footage of protestors storming the US Capitol building last week. After many blamed the President for inciting pro-Trump rioters to challenge the electoral college results (which saw President-Elect Joe Biden come out on top), companies started to turn their back on him.

The most famous actions were those taken by Twitter, with the company permanently suspended Trump’s account. Then there was the high-profile temporary collapse of the Parler social media app, which was home to many Trump supporters, after leading vendors such as Amazon, Apple, and Microsoft all refused to host the app on their server infrastructure.

While these stories stole the headlines, not much was made of the Wall Street Journal report that revealed Stripe Inc. had ceased to process card payments for the Trump campaign’s website.

Just like that, Trump’s fundraising abilities were cut out from underneath his team.

Why Was Trump Banned By Stripe?

Stripe has form when it comes to banning companies that have links to violent actions. They ask users to agree that they won’t accept payments for high-risk merchants, including any business or organization that “engages in, encourages, promotes or celebrates unlawful violence or physical harm to persons or property,” according to its website.

They felt that in the wake of Biden’s victory and active investigations by lawmakers and the FBI alike, they didn’t need to wait until the new President’s inauguration to take action against Trump’s campaign.

One example of Stripe taking action was after a gunman killed 11 people in an attack on a Pittsburgh synagogue in 2018. Stripe cut off Gab.com, a right-wing social-media platform where the alleged shooter posted anti-Semitic messages.

While Gab itself didn’t partake in any violence nor sell any violent products are services, the incident sparked a precedent that meant the leader of the Republican party was likely to be dropped in the wake of last week’s riot.

While former Trump has been impeached for a second time and awaits a Senate trial, the technology company decided that they had seen enough and removed their services from Trump’s online businesses for”inciting violence.”

So what does this mean for other high-risk e-commerce merchants?

President Donald Trump’s Campaign Website Today, Your High-Risk e-Commerce Business Tomorrow?

Whether you agree with Stripe’s decision to revoke their payment processing services to President Trump and his team, the decision could have wider implications for those in high-risk verticals.

Emails have been flooding in this week from merchants in high-risk verticals such as supplements asking if Stripe can unilaterally decide to suspend payment processing. The answer is yes. Especially if you are breaking their terms of service in any way.

But the truth is that most of these merchants operate in a gray area. Sometimes they are approved for payments in technically restricted sectors and are hoping the company never realize. In other instances, high-risk merchants are getting dangerously close to chargeback and refund limits.

But there are many instances whereby legitimate businesses are blocked and/or banned seemingly without valid reasons. Just a cursory glance at Reddit uncovers dozens of Shopify store owners (for which Stripe provides the processing) being locked out of their accounts and receiving radio silence from Stripe customer support.

In another instance, one e-commerce store owner was banned for excessive refunds, which only occurred because a glitch in Stripe’s checkout forced customers to enter their payment details multiple times, resulting in 3-4 orders being processed per customer.

The point is that while your business might have nothing to do with the GOP or the Democrats, you could just as easily lose your ability to process credit card payments overnight. Whether you sell PPE for COVID or you own and operate an immunity supplement website, Stripe could turn off the tap overnight and freeze your pending funds for as long as 120 days.

So the real question isn’t about Trump or his alleged ties to violence here. It’s about Stripe’s power over your online payment processing.

Secure a High-Risk Merchant Account Today to Mitigate the Risks Associated with Stripe

We’ve said on many occasions that payment aggregators like Stripe are a ticking timebomb for your business. Yes, they are easy to set up and gain that initial traction for your store. However, their risk tolerance is incredibly low. One misstep could see the end of your processing.

That’s why you need to have a backup plan in place. Whether you’re based in New York or London, setting up a dedicated high-risk merchant account is the only way to mitigate the risk Stripe represents to your business.

With specialist high-risk payment solutions, you can work with acquiring banks and payment processors that understand the inherent risk associated with your industry. You can benefit from a more understanding approach to chargebacks and refunds while securing help in the battle against fraudulent payments.

To speak to one of our expert team members, shoot us an email to discuss your worries about losing your payment processing abilities for your high-risk business today!

January 15, 2021
FAQ Fridays: Improve Customer Service To Lower Chargebacks
Q: I have a nutra site that sells mainly immunity supplements. Since Covid, we’ve had a huge uptick in sales that is not slowing down. I’ve noticed much larger bills for our monthly customer service costs.

I outsource my customer service to an external call centre. The call centre is opened 24 hours so my customers can get help any time of the day, but I’m afraid the quality of service isn’t great off hours as it is non-US customer support agents who answer the calls.

We offer email, phone and chat support. We handle email requests in-house and have noticed an increase in emails as well. Is there any tips you can provide that will help curb these costs while maintaining service levels to our customers? Chargebacks and refunds are also a big concern as we are scaling so we’d like to ensure we don’t increase these by making changes to our customer service practices.

A: Customer service is very often an over-looked part of running an online business.

There are several things you can do to help your customers before they result in directly contacting you. Ensuring your checkout process is clear is key in preventing unwanted calls and frustration from your buyers.

What can you do during the sales process?
- Your checkout page should display clear and precise pricing. Remind your customers what they are buying, how much it costs and shipping delays. Most questions customers call about are around those topics.
- Send your customers a receipt for their purchase. You can take the opportunity once again to remind them what they have purchased, the quantity, the price as well as any specifics about shipping and order status. Also, include a link to your FAQ page so they can get answers to common questions.
- Keep your customers updated about their order status. If you offer tracked shipping, email your customers once you have the tracking number and keep them up to date of any delays along the way.
Other ways to help your customers?
- Create a support page for your products and services. You can include all information about your company and contact information can be clearly laid out to avoid a customer getting frustrated and potentially issuing a chargeback.
- Get your customer service team to put together a list of your customers frequently asked questions. Post the FAQ page visibly within your website as well as your customer support page. These questions can cover commonly asked questions such as how to get a login reset, how long orders take, how does a customer get a refund or process a return. Many customers prefer to get the information themselves rather than call someone and wait to get answers. Give your customers the opportunity to get their information quickly and efficiently on a FAQ page.
- Offer a chat option and other quick contact options. Make it obvious for easy accessibility. In order for this to work and avoid customer frustration, the chat agent must be responsive. Having a button there for customers to contact you by chat but making them wait for over a minute may have the opposite effect and frustrate your customers.
- Ensure your response time is within acceptable limits. Respond to all emails within 1 day, online chats and phone calls should be answered within 20 seconds to ensure an acceptable service level. This will ensure your customers don’t get impatient and hang up to call their banks and issue a chargeback instead.
- Include an insert if you’re mailing a package that makes returns and refunds seamless. You have another way to market to your customers when you’re sending them a package. Take the opportunity to give them clear instructions on how to process a return directly within their box.
- Process refund requests quickly so customers can see their funds back in their account within days to avoid a potential chargeback.
- Ensure your customers get an auto-responder email when they contact you and set expectations on when they will hear from you.
- Community support can be helpful. Having a group or page on social media can provide your customers with tools to help each other and can increase customer loyalty.
What are the best practices for the call centre?
- Whether you outsource or have an in-house customer service team, make sure you train your staff to understand the product and sales cycle.
- Try to have a local support team available for the busiest customer service hours, as many customers express frustration when they cannot properly communicate with the customer service agent.
- Make sure you have an 800 phone number so customers don’t have to go out of their way to reach out to you or pay extra fees.
- Offer your customer service agents tools and tips on how to deal with aggressive customers. When your customers contact support, they are upset about something so teach your agents soft skills to calm the customer prior to fixing their issue. Covid has made many customers very frustrated with the extra wait times for everything these days.
- Prior to offering a refund, ensure your customer service agents determine what the issue is and troubleshoot accordingly. Customer experience when they contact support helps maintain a positive image for your company.
- If a customer threatens to chargeback, offer a refund instead. A chargeback dispute is costly and ultimately you will lose the sale plus an extra fee for the chargeback.
Remember when a call centre operates properly, it can become a profit centre instead of a cost centre. By giving your agents tools to help save customers and provide free products to avoid refunds or chargebacks, you will have happier customers and more profits from your sales.

Have clear and measurable goals for your customer support agents and they will work harder at reaching them. These can include maintaining service levels, lowering refunds by 2%, getting more customers on chat which helps lower costs over phone calls.

Looking at your customer service process will help you find tweaks that can add revenue and save you money. In addition, it can help you keep your payment processing healthy by lowering chargebacks and refunds. These measures will be put in place once and can continue providing value for years to come.

I hope this information was valuable for you.

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October 23, 2020