Fraudsters have really made things more difficult for everyone when it comes to getting a merchant account. In the past, these shady folks have set up shell merchant accounts that are made to look completely above board, but they are actually selling counterfeits or running credit card payments without ever sending the “customer” any goods. Credit card companies assume a lot of risk when taking on new businesses and obviously want to avoid these kinds of set ups like the plague. After all, if one of these “businesses” owes money to their customers or has a bank that is not compliant with required rules, the merchant account may be held responsible to cover the charges and fees.
To safeguard themselves against crooked businesses, credit card companies call for Merchant On-site Inspections (also called Merchant Inspections, On-Site Surveys, or Merchant On-site Investigations), which are handled by a third party. This provides the credit card company with a full visual analysis of the business in question – determining its legitimacy. These inspections can also be used to ensure the merchant was honest on his or her account application. The process will answer the following questions:
• How many employees actually work at the business?
• Is the merchant selling the products he/she says are being sold?
• Did the merchant exaggerate the sales volume to be more or less?
What if You Run an Online Business?
If your business is solely online, the credit card companies obviously can’t call for an onsite inspection. But they will need substantial proof that the information you provided in your application is true. Maintaining a good relationship with your credit card company is crucial to your business, so it’s better to be over-prepared than the opposite. Here are some good tips for showing them you are legit:
1.Provide pictures of your inventory. They don’t have to be fancy. Just take pictures of your home or office where the products are stored, as well as a couple different shots of each product. However you have to do it, give the credit card company a good idea of what your day to day business looks like.
2. Keep pictures and bios of all your staff members. It’s very important that you tell the truth about how many people work for you. Provide information on your staff members such as bios (or Linkedin pages) and pictures.
3. Maintain accurate documentation of all sales. This is extremely important. You cannot fudge sales numbers – not even a little. Keep strong documentation on all your sales and be upfront with the credit card company about all of them.
Whenever this gets to be annoying, remember – not having a legitimate credit card company will be way more of a hassle. So do your due diligence. Remember, credit card companies have been burned in the past by shadesters. Don’t give them ANY reason to think that you’re one too!