Chapter 2

Accept Credit Cards Online

(No Storefront, No Problem)

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The Complete Guide to Credit Card Processing is an in-depth explanation of how credit card processing works. This guide will help you evaluate and decide on the best merchant account without the false starts and missteps that others have fallen prey to in the past. Download your copy of the world’s most-comprehensive guide on credit card processing

Understanding how Credit Card Processing can work for you!

The ability to accept credit cards online is vital to every ecommerce business and online retailer. While vital, it’s not very clear how to get an online merchant account that gives you the tools you need while keeping fees at a low rate.

With literally thousands of credit card processors hoping to earn your business, how do you make an educated decision on which third party processor is right for you?

We are going to take a detailed look at exactly what makes a great online credit card processor and how you can find the right one to best fit your business type.

2.1 How to accept credit cards online

There are a few things that are different from a traditional merchant account when you’re looking to accept credit card payments online. It’s these subtle nuances that determine whether the merchant account you’re considering is going to be the perfect fit.

Your goal as a merchant is simple. You want to give your patrons as many payment options as possible and pay the minimum in fees possible.

Since most customers can’t just walk in and give you their bank account information for a payment, having as many payment options as possible is always good for business.

2.2 Payment Gateways

Every online merchant account must have some type of payment gateway. The most commonly available payment gateways are currently Authorize.net and SecureNet. Other gateway providers are USA e-pay, Bridge pay and Vital.

What is a payment gateway?

A payment gateway is a service provided for brick and mortar stores that allows them to process payments online.

Your merchant account for your brick and mortar business has a merchant account that is setup to run payments at a point of sale. This setup is designed to process payments when both the card and purchaser are present for the transaction.

In the online store space, transactions happen differently than at the point of sale in a retail store. Online, customers key in their credit card number using a keyboard, and there’s no physical point of sale to prove that their card is present or capture a signature during the transaction.

Instead, pos software replaces the physical point of sale, and transactions happen without any human interaction.

This difference is what makes the payment gateway necessary. The payment gateway is designed to function in the place of the terminal as a sort of “software terminal” to run the transaction for the business.

The gateway accepts the payment information and checks it for validity within seconds of the time the purchase button is clicked.

What are gateway fees?

Gateway fees are charges created by the company providing the gateway to make sure they get a cut of the profit.

On a traditional merchant account, all of the businesses taking part of the transaction would take a fraction of a percentage of the processing amount to make up their cut.

Gateway providers get their portion of the transaction by charging gateway fees every month you have a gateway set up through them.

It doesn’t matter how much you use the gateway during the month, so there are no limits on gateway use.

A common fee you might see from a gateway provider would be a $5 gateway fee per month on your account as well as a $.05 per transaction fee for each purchase made using the gateway. These fees happen outside of your merchant account provider but will show up on your monthly bill.

What does it mean when a payment gateway is agnostic?

Some payment gateways are agnostic, which means that they can work with any bank. Many processors will create their own payment gateway that aren’t agnostic, further locking you into using them as your processor.

There are many tricks of the trade in the credit card payment processing company space, and locking customers in to long term contracts and using other hidden complexities has long been the practice.

When you’re looking at a payment gateway, you want one that is agnostic rather than one that will only work with your current processor. When you decide that you want to leave your current online credit card processors for greener pastures, a locked payment gateway makes the process incredibly more difficult.

You might find that your internet business could be down for multiple days or even weeks when you learn that your online payment gateway can’t come with you to another processor.

Does my Point of Sale system need to be agnostic as well?

Systems like Mynt and Paradise are agnostic, meaning that they can use almost any gateway to process payments. Many other POS systems are not agnostic, and you can only use them with the payment gateway for a certain processor.

POS systems like Clover, Shopify payments, Shopkeep, Square and others are built to only process payments within their company architecture, and if you ever decide to leave you will have an expensive POS system that you can’t use anywhere else.

2.3 gain an advantage with a virtual terminal

A virtual terminal is a software terminal that allows a business to run transactions using software on a computer, tablet or phone. This allows businesses of all sizes to accept a credit card over the phone or run a transaction when the magstripe on a credit card doesn’t want to cooperate.

One of the biggest advantages of a virtual terminal is that it provides the business with the opportunity to set up recurring payments.

Say for example that you’re a pest control company, and you have multiple customers set up on a monthly package. You come out and treat the exterior of their home once per month, but when you treat the home the homeowner won’t always be there to hand you a credit card. (besides the fact that it’s super inconvenient.)

Recurring billing makes it so that you can just collect the credit card information one time and continue to charge their card every month until they cancel their service.

This is something that traditional terminals can’t accomplish. You will need a virtual terminal to enable recurring billing for your business.

A virtual terminal stores the credit card number and associated information in a secure way with military grade encryption. By storing only the last 4 digits of the credit card on the virtual terminal, it keeps credit cards secure while allowing scheduled monthly and as needed transactions.

The whole credit card number and authorization information is stored through the processor with military grade encryption.

Virtual terminals also have the added ability to connect to readers in the field. A fleet of credit card readers can be out with staff doing work and swiping cards that will send all transactions back to the virtual terminal for authorization.

Imagine a heating and air company, with 10 repair people in the field each day. With a virtual terminal and mobile readers to swipe cards in the field, there doesn’t need to be anyone back at the office taking credit card numbers by phone.

A virtual terminal and mobile readers allows a business to be as mobile as they need to be while still having a complete and accurate reporting process for each transaction in a central software program.

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2.4 Mobile payments and online credit card processing

Mobile payments have been on the rise in recent years with the birth of Apple Pay, Samsung Pay, Google Wallet, Amazon payment and Paypal Mobile.

These mobile credit card processing platforms focus on making a payment using a mobile device rather than pulling out a credit card.

The reason that these mobile processing solutions have become so prevalent in the market is because they use the equivalent of a mobile app to make payments.

There’s no remembering your wallet or searching through a purse or a bag to find a card. It’s as simple as a tap of the phone to an NFC card reader.

What does this have to do with accepting credit cards online when mobile credit card readers don’t matter?

Businesses like Paypal were birthed out of the online space, and Apple, Google and Samsung see the huge opportunity for profit in this new market.

For your online business, the day is soon coming where accepting payment methods like Visa, Mastercard, Discover and American Express won’t be enough payment options for your diverse customer base. Multiple payment options is what the customers of today expect at the point of sale.

The credit card terminals of the online space have gotten much more complex in recent years.

2.5 Website Integrations

Every online business is going to need the ability to accept credit cards through their website. In order to accept credit cards through a website, the payment processor must be able to integrate into the website in order to take credit card payments.

Most shopping cart frameworks are built to integrate into the leading website platforms.

Most websites are created within software platforms like WordPress, Ruby on Rails or Drupal, which have plugin integrations allowing a payment processor to connect to a website. Accepting payments online doesn’t have to be a lengthy or difficult process, but many business owners have difficulty when it comes to integrating their selected payment processor with their site.

WordPress has been a staple of the business world and is one of the easiest platforms to integrate with. Plugins like WooCommerce have multiple options for integrating your hosted payment solution. Third party plugins like the one from Authorize.net also make it easy to bring over your payment gateway.

Each website must be approved in order to accept payments online. Each site must go through a checklist of the different elements that are required in order for a site to be approved for online payments.

For a website to be approved, the site must have to have a return policy and terms and conditions page.

Here at Dual Payments, we have an ecommerce checklist for our merchants to walk them through all of the elements that must be present before they will be approved. If you would like to download a copy of the Dual Payments ecommerce checklist, it’s available for download at no cost.

When a new merchant signs up with us for an online merchant account, we provide the company with a data sheet that has the information needed for a business to integrate payments with their website payment depots.

Most major credit card providers will have something of the like, but in our case, we also have an ecommerce department ready to help business owners get set up and running transactions.

2.6 fraud and the online merchant account

Online transactions account for more than 90% of all fraudulent transactions worldwide.

Even though the industry just went through a major overhaul in the United States with the EMV chip card, most fraud happens online. Global payment processes has seen a massive change in security measures for a small bump in security success.

The EMV terminal was brought about to make sure that the card was present in each transaction, but online the card can’t be present, so fraud is still rampant.

Chip cards actually reduced fraud on all credit card transactions by about 5%. With such a great cost to make the switch to EMV terminals for all points of sale, it’s a very small reduction in fraud for such a massive system upgrade.

There are ways that you can protect yourself if you’re primarily taking payments online.

How to Protect Your Business from Fraudulent Card Transactions

The best way to protect your business is to get as much information as you can from the customer. Getting even a copy of their driver’s license is recommended for transactions over $2,000.

Another way to protect your business is to only ship to the billing address and not allow separate shipping addresses. In many cases of fraud, a card will be stolen, the original billing address is added via the stolen driver’s license and the goods are shipped to another location.

It’s understandable that certain businesses will want to allow their customers to ship to secondary addresses other than their billing address, but each time it’s done the risk is increased that one will end up in fraud.

Fraud prevention should be a primary benefit from the merchant solutions company you’re looking to be processing credit cards with.

Chargebacks and the online business

When a customer decides to file a chargeback against their purchase with your business, it’s completely up to you to fight the chargeback.

The chargeback system is set to automatically favor the purchaser, and if a business doesn’t fight a chargeback, the consumer wins and the business has to pay.

Chargebacks are made much more difficult online because the data that you would usually show to prove a transaction isn’t available online.

Stores can use security footage to show that you were in the store and show you walking out with a bag of goods. Online businesses don’t have the luxury of a video proving that a package was indeed dropped off at the front door.

A signed purchase receipt is the primary way that businesses fight chargebacks for brick and mortar stores, and online there’s no signature required. Even complex payment forms won’t guarantee an online business chargeback wins.

So, how do you set up your business to win chargebacks when they show up?

Online retailers like Amazon have been fighting chargebacks and stated non-delivered packages for years, and they’re starting to implement new procedures to prove that their business has followed through with your order.

Amazon in many cases now have delivery drivers take a photo of the package on your doorstep. The photo is sent to you by Amazon to let you know that a package has arrived.

Other online businesses have instituted a secondary confirmation layer for anyone who wants to ship to another location that’s not their billing address.

For example, if one wanted to send a present to a family member’s house, the website would confirm the purchase by requiring that the consumer input a number that would be texted to their phone during the purchase. This secondary layer helps the online business prove that the purchaser did indeed purposely order and send it to a secondary location.

2.7 online credit card processing fees

Every time there’s an opportunity to make more money, you can guarantee that ach processing companies will take advantage of each opportunity.

Credit card processing company fees aren’t just for traditional merchant accounts. Fees are present in online merchant accounts just like they are for brick and mortar businesses.

To learn more about the different pricing models like interchangeplus pricing, membership pricing, partner programs and others, check out chapter 3 of our guide.

Below is a list of the fees that you might find in your merchant services contract.

Gateway Fee
This is the fee that pays the gateway company. Gateway companies make their money through the gateway fee and a per item charge. Authorize.net currently charges $5 per month and $.05 per transaction. The only way to avoid having a gateway fee with your online merchant account would be to use a zero fee processing solution that has zero fees.
PCI Fee
This fee is imposed by the Payment Card Industry Data Security Standards Council. It is paid to support oversight into data security policies within the card payment industry. The pci compliance fees can be minimal or highly marked up by the processor that you’re working with, so this is a fee to watch out for.
Monthly Minimum
A monthly minimum is a guarantee to the processor that your account will make a minimum amount of money each month. If your account doesn’t run enough transactions that month, monthly fees are imposed to ensure that there is enough money to keep the account in the positive. It’s best to find an online merchant account that has no monthly minimums.
Statement Fee The statement fee is a fee charged to generate a statement for you every month. It can be a printed statement or a digital statement, but some merchant providers want to charge you monthly to receive a statement. Know that the statement fee is pure profit for any merchant account provider, and you shouldn’t ever have to pay it.
Batch Fees
The batch fee is a fee assigned to your account to cover the “batching out” process that happens at the end of every business day. Many processors would like you to think that there is a lot involved in batching out a business, but it’s a completely automated process. This is yet another pure profit fee created by merchant services companies to increase their profit.
Regulatory Fee
This is a fee that processors charge for reporting your business income to the IRS. Each processor has to file form 1099K for each business processing with them, so this fee covers that process annually. It has become an additional source of income for processors over the years, and is something you shouldn’t find in your merchant account agreement.
Setup Fees
This is simply a fee that the merchant account company charges you to set up your account. If you’re seeing this fee month after month, something is definitely wrong.
Termination Fee
Credit card processing companies want to keep you around, paying them money for the ability to accept business credit cards. If you leave and let another company do it for you, they don’t make any money off of you. This is where the termination fee originates. They’ll let you leave, but not before you pay them a hefty sum. Never sign a contract with termination or cancellation fees.
Annual Fees
An idea that someone in the back office of a credit card processor came up with, no doubt. This is a fee that is charged every year to your account to maximize online processing profitability. There’s inevitably some reason why they say they charge it, but it’s likely something surrounding investor relations and the global reach of financial institutions. In plain terms, these payments provides gift cards for the mobile wallet of the accounting software nerds. It’s complete gibberish.

2.8 Choosing the Right Online Merchant Account Provider

Not every merchant account provider is designed to work with every business. For example, there are credit card processors who don’t issue any account in the ecommerce space at all.

There are merchant services companies that focus on small businesses and those that focus on large businesses. Other online payment processing companies focus on things like business credit management, business loans and merchant cash advances to draw you in.

The key to choosing the right online merchant account provider is to find the provider that specializes in your type and size of business.

The popular payment processor Stripe is known for working with very small or micro businesses. They can help even the smallest business accept credit cards and debit cards as payment, even when they’re only running 1 or 2 transactions per month.

While Stripe is a great solution for smaller businesses, as the size of a business grows the solution isn’t necessarily right for the long term to increase cash flow.

When a business is processing at least $5,000 per month, it’s time to find a merchant account that’s designed for growing business models.

Until a business reaches the $5,000 per month threshold, it’s better for a business to use Stripe or Paypal credit card processing solution.

Here at Dual Payments, we’ve designed our online merchant account program for businesses that have crossed the $5,000 per month mark. If that’s you, and you’d like to apply for a Dual Payments online merchant account, click here to get started.

2.9 The Key To Selling Online

Accepting credit cards online doesn’t have to be a confusing process, and armed with the above knowledge you can negotiate a low cost solution for your business. With the many processing options available to your business, you deserve to work with the best solution for your type of business.

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Example of High Risk Merchants

1-900 Phone companies – If you’re the type of company that charges people to have a chat on the phone, you’ll be considered high risk.
Adult Bookstores – Clearly a part of the adult entertainment industry, and an easy mark for the high risk tag.
Adult Entertainment – Any business labeled with the “adult” descriptor will automatically be assigned a high risk status.
Adult Toys – As “adult” is in the name, it’s an easy target for association with the adult entertainment market.
Airline Industry – Due to cancellations on high ticket purchases, this will put your airline company in the high risk category
Amazon Stores – By having a high rate of return, Amazon stores are seen as high risk.
Ammo Sales – Association with the weapons industry guarantees high risk status.
Annual Contracts – Any time an annual contract is involved it can be considered highrisk because most consumers forget they signed up and chance of chargeback can be high.
Antiques – With a high average ticket per item, antiques are considered a risky merchant type.
Astrology – The study of the celestial bodies and the influence on human affairs can be a chargeback target if customers feel like they aren’t getting the answers they want.
Auctions – Because of the nature of bidding on a product and not having a set price the risk level goes up.
Autographed Collectables – There is almost always a question as to whether an autograph is authentic, and therefore chargebacks are much higher in this industry.
Automotive Brokers – Brokers of automobiles have a very high average ticket are are therefore of higher risk.
Bankruptcy Attorneys – Since the people who are working with bankruptcy attorneys are usually in financial trouble, the odds that a payment would be charged back is higher.
Betting Services – In many states betting is illegal but for the legal states betting with a credit card has huge chargeback implications.
Brokering – When a third party is involved with selling a product the risk level goes up ten fold.
Business Loans (Merchant Cash Advances) – Loaning money is always risky, but with business loans and startup lending, high risk is present by the nature of the business.
Casino – Just like a betting service, if a customer gambles with their credit card the chargeback rate sky rockets.
CBD Products – CBD itself poses high chargebacks because of the legitimacy of the product and the health benefits promised.
CBD E commerce – CBD E Commerce has twice the charge back of retail CBD because many consumers don’t feel like the product they receive gives them the benefits promised.
Check Cashing (Check Processing) – The level of fraud in check cashing and cash advances is what gives this industry a higher risk consideration.
Cigarettes – With higher levels of risk for theft and criminal activity, cigarette sales are deemed high risk.
Collection Agencies (Collection Agency) – Many banks see collections as an unsustainable business model that is many times unreliable.
Collectible Coins – A higher level of chargeback in this industry gives it a high risk tag.
Collectible Currency – Due to the level of inauthentic collectibles, the risk of chargebacks are much higher with collectibles.
Copyrighted eBooks – When someone sells something copyrighted without permission many legal issues can arise.
Coupon Programs – With many coupon programs the coupons expire and once they expire the consumer wants the money back they spend.
Credit Counseling – Due to their clients usually being in financial problems, this industry is fraught with non-payment and fraud.
Credit Protection – Most people that need credit protection are bad with money so chargebacks abound.
Credit Repair – If a consumer needs credit repair then chances are they are a high risk for chargebacks.
Currency Sales – Many businesses that exchange currency do it at incorrect rates hence more chargebacks.
Dating Services – Dating is a volatile industry, and is also lumped in with the adult entertainment industry, making it a high risk account.
Debt Collection Services – As the collection of debt isn’t always possible, this industry retains the tag of risky.
Debt Consolidation Services (Debt Consolidators) – Consolidating debt is a challenging business and as debt is usually the problem, it’s seen as unsecure from a payment perspective.
Debt Repair Services – Since the clients of debt repair services are usually having financial challenges, it makes this industry seem a higher risk.
Discount Health Programs – Many people don’t feel they are really getting a discount so they try to get their money back and if they don’t the chargebacks sky rocket.
Discount Medical Care Programs – Just like the discount health programs if they don’t save the consumer wants their money back.
Drug Paraphernalia – Anything that is associated with the drug trade is considered high risk. Offshore merchant accounts are commonly used for this type of business.
E Commerce – As the source of the payment is unverifiable at the point of sale, any transaction without the card present has a higher risk of credit card fraud.
Ebay Stores – Many people sell items that aren’t as described so chargebacks can be an issue.
Electronic cigarettes – much like traditional cigarettes, e-cigarette sales are also deemed high risk.
Electronics – This industry has a much higher ticket compared with many other businesses. A chargeback for a $3,000 tv or two and your account can be in jeopardy rather quickly.
Escort Services – This is deemed a part of the adult entertainment industry and therefore needs a high risk merchant account and payment solution.
Event Ticket Brokers – If a customer buys a ticket and doesn’t use it they feel like they can charge the transaction back.
Extended Warranty Companies – Warranties are rarely used so people try to charge back the money that has been spent paying for them.
Federal Firearms License Dealers – Any organization associated with guns or firearms is automatically considered in this category.
Fantasy Sports Websites – Just like gambling, if a person starts to lose too often they try and charge back the transaction.
Finance Brokers – The entire financing industry is risky. By simply extending credit to other individuals, this business is betting that a majority of them will actually pay what they say they will.
Financial Advising/Consulting – The high risk tag on financial advisors isn’t about the advisors or their firm. It’s about the clientele and their current circumstances.
Financial Loan Modification Services – Due to a clientele in financial struggles, the high risk term is applied to any payments in this industry.
Financial Planning – Anything that includes risk for the consumer can have consumer implications with chargebacks.
Financial Strategy – Another risk and reward category, if money is lost, consumers try charging back making this a high risk industry.
Fortune Tellers – When a person doesn’t hear what they want to hear, or what is told doesn’t happen, the fortune teller can receive huge chargebacks.
Furniture Sellers – High risk only when its custom furniture.
Gambling – If money is lost the chargebacks rise.
Gaming – Chargeback levels skyrocket when consumers don’t win.
Get Rich Quick Programs – It’s rather common in this industry for an individual to purchase the training and then chargeback their purchase saying it didn’t deliver on what was promised.
Google Stores – With a high rate of return on their items, Google stores are considered high risk.
Gun Sales (Firearm Sales) – The gun and projectile industry is automatically associated with high risk credit card processing.
High Average Ticket Sales – With any high average ticket, just a couple of chargebacks can mean a massive shift in how risky the account is deemed by the processor.
Home/Vacation Rentals – Many issues with chargebacks can take place if the consumer decides not to travel.
Horoscopes – Many people believe this is hocum so will chargeback transactions.
How To Programs – A common practice in this industry is to purchase the program and charge it back with the description that it didn’t deliver what it promised.
Hypnotists – Many merchants will charge back these transactions if results they hoped for were not met.
Import/Export Business – Another example of taking goods over country borders which automatically brings in additional risk to any processing account.
Indirect Financial Consulting – When using a third party to consult, the high risk status gives the processor fraud protection.
International Cargo – Any time you introduce a multi-country element to credit card processing, the ability for fraud to be introduced skyrockets.
International Merchants operating in the US – Since the merchant isn’t operating from the United States, there are many unknowns about what is happening on the other side of their business, thus increasing the risk.
International Shipping – Transporting goods between countries is risky and introduces all sorts of elements to the financial stability of any transaction.
Investment Books – consumers get upset if the investor isn’t right which can lead to chargebacks.
Investment Firms – As investments are never a “sure thing” this is considered a risky industry for having a merchant account.
Investment Strategy – Anything with future promises can lead to chargeback.
Knife Sales – weapons of any kind are automatically given high risk status.
Kratom E Commerce – Accepting payments online is high risk, and Kratom is a substance in the health and wellness industry, which is also considered high risk.
Life Coaching – With no tangible goods involved in the transaction, life coaching is considered high risk.
Lingerie Businesses – Associated with the adult entertainment industry, chargebacks abound.
Lotteries – In most states you can buy lottery tickets with a credit card but if you’re allowed to and the ticket is not a winner, consumers try to chargeback the transactions.
Magazine Sales – Many magazine sales are recurring subscriptions, which can have issues with chargebacks.
Magazine Subscriptions – Same as magazine sales chargebacks can be huge when a recurring subscription happens. (often referred to as recurring billing.)
Mail Order Companies – When something is ordered through the mail chargeback risk can go up.
Marijuana Dispensaries – As marijuana isn’t a legal substance in every state, this is considered high risk due to the legality of the product. Cannabis credit card processing is available through Shift Processing.
Matchmaking Services – Another branch of the dating tree, and often associated with the adult entertainment industry.
Medical Devices – If a medical device doesn’t do what’s promised the purchaser may chargeback the transaction.
Membership Organizations – This is another instance of where the transactions don’t have any tangible product and are easily charged back to the merchant account.
Merchants on the MATCH list – If you are a merchant who has been reported to the MATCH list (Member Alert to Control High Risk Merchants) or the TMF (Terminated Merchant File) you are given high risk status.
Merchants with Poor Credit – Merchant accounts are given based on the credit score of the business owner. It’s assumed that the business owner is going to be making the financial decisions for the business, and a poor credit score reflects on the viability of any business transactions.
Modeling Agencies – At many agencies models are promised the world and it doesn’t happen. The consumer then wants their money back.
Movie Downloads – Transference of a digital product is considered of higher risk. Also, rarely is a physical card present at time of purchase.
Multilevel Marketing Sales – Often associated with pyramid schemes, MLM sales are considered a risky business.
Music Downloads – Purchasing any digital product is considered to be of higher risk than a physical transaction. Most of the time the card is not present in a digital transaction using a shopping cart.
Not A US Citizen Doing Business In The US – It’s possible to get a merchant account without a US social security number, but not having a SSN will increase the risk the processor will have in issuing a merchant account for your business.
Online Adult Membership Sites – If you’re running a website that is adult themed and requires payment for access, this is a highly volatile account and definitely high risk.
Offshore Corporations (Offshore Merchants) – The international element is what gives the high risk tag when looking for domestic merchant accounts.
Online Gambling (Online Gaming) – Without a card being present and gambling as the activity, there are two reasons why this would be on this list. Online payment alone is risky even without the gambling element.
Overseas Exporting Services – The introduction of the international element is what gains access to this list.
Pawn Shops – There’s a general stigma that goes along with pawn shops, and it’s reflected in their assignment to the high risk processors list.
Penny Auction Sites – Even though the customers are usually bidding at only a penny more per bid, users will commonly charge back the transaction when they don’t win.
Pepper Spray – Considered a type of weapon, pepper spray vendors are considered risky.
Points Programs – Points programs that cost money can cause chargeback issues if points are not used.
Pornographic Merchants – If you’re a part of the adult entertainment industry in any way, you’re considered high risk.
Precious Metals – Counterfeit metals can be a problem in this industry, making it more risky to accept payments for.
Prepaid Calling Cards – Anything prepaid that a consumer may not use increases chargeback issues.
Prepaid Debit Cards – When they expire or are lost consumers want their money back.
Psychic Services – “Honey, did you visit a psychic? No babe, I don’t remember visiting a psychic.” I’ll just reverse that charge then.
Real Estate – A common target for scams and identity theft is how real estate makes this list.
Replica Products (Watches, Handbags, Wallets, Sunglasses, Etc…) – As the product being sold isn’t authentic to the original manufacturer, the percentage of requests for refund is much higher than a traditional merchant.
Rewards Programs – If rewards are not spent, the consumer wants the money back.
Self-Defense – Since the payment provided is for instruction and not a physical product, the self-defense industry makes this list.
Self-Hypnosis Services – Yet another instance where the goods being transferred are of a service and not a physical product.
SEO Services – With a high rate of request for refund, SEO agencies make this list.
Social Networking Sites – Just like a dating site, if a consumer does not get what they want from it, they always like to chargeback.
Software Downloads – The software industry makes their way on to this list because of the digital nature of the goods being sold.
Sports Forecasting – An example of paying for information and not for a product, and usually not in person where the card would be present for the transaction.
Startups – Every startup is considered risky, and the percentage of startups that make it is quite small compared to the number that fail.
Student Loans – With the cost of a college education continually on the rise, so is the percentage of loans that default and never receive payment.
Strip Clubs – Associated with the adult entertainment industry gains the strip club access to this list.
Stun Gun Sales – considered a type of weapon, which makes it a high risk merchant.
Supplement Sales – The request for refund in this industry is quite high due to the nature of the product.
Sweepstakes – “Hey, I entered a sweepstake and I didn’t win. I’d like my money back please.”
Talent Agencies – “I paid thousands of dollars for headshots and glamorous outfits and I haven’t gotten any paid gigs. Pay me back my money please.”
Telemarketing Services – Telemarketing services many times do not have the results the purchaser would like to see, so the services are charged back.
Telephone Order Sales – Anything ordered over the phone has a increased risk of chargeback.
Timeshare Companies – When timeshares aren’t used, people want their money back.
Travel Agencies – If trips are not taken, consumers would like their funds returned.
Travel Clubs – Many travel club discounts aren’t what they were promised, increasing risk for chargebacks.
Vacation Rental Brokers – Third party brokers on prepaid vacation can have issues when customers cancel their trips.
Vape Shops – The level of criminal activity and theft is higher with vape shop merchants and therefore carries a high risk label.
Vitamin Sales – If the vitamins don’t provide the results the merchant would like to see they chargeback the transactions.
Web Designer – Because this service is prone to chargebacks, it has been classified as high risk.
Weight Loss – Considered risky because the results aren’t really up to the company, but rather the individual has to stick to the plan to get results, often resulting in chargebacks.
Yahoo Stores – Since the goods sold through Yahoo can easily be returned, they are considered a risky merchant.

Turn Your Residuals into Immediate Cash Today

Selling your residuals doesn’t impact your merchants—they’ll keep processing happily. So, if you need extra funds, explore a credit card residual buyout. It’s fast, easy, and a smart move for your financial game plan.