High-ticket merchants have high-ticket merchant accounts. These businesses specialize in offering expensive, luxury products or services to their client base. They typically charge high prices for their products and services.
While this may sound like a fortunate position to be in, charging high prices, comes with its own unique set of challenges. With products and services that start in the hundreds and top out in multiple thousands of dollars, any single bad transaction can make a significant dent in a business’s operation.
High-ticket merchants face unique hurdles, especially when it comes to operating an online business. The ability to provide high-ticket goods and services online requires the ability to process credit card payments. Unfortunately, high-ticket merchants have a reputation for excessive chargebacks. As such, banks and traditional institutions often classify them as high-risk and will not approve their applications for merchant accounts.
SecureGlobalPay specializes in providing customized payment processing solutions to both new and established high-ticket merchants. SecureGlobalPay offers fraud filters, payment gateways and chargeback mitigation programs.
Examples of high-ticket merchants
High-ticket merchant accounts enable businesses to process credit card payments for high-dollar products and services.
Examples of high-ticket business include:
- Auto accessories and parts
- Credit repair
- Designer fashion
- Luxury goods and services, such as private planes and travel
- Precious metals
- Tech support
- Tickets for flights, concerts, excursions
These are some examples of high-ticket merchants. SecureGlobalPay is prepared to support these and other high-ticket merchants, including those with single transactions in the six-figure range. Fill out an application today and learn why high-ticket businesses are SecureGlobalPay’s specialty.
Applying for a high-ticket merchant account
Apply online with SecureGlobalPay for a high-ticket merchant account today. Be prepared to submit the following items for review:
- A valid, government-issued photo ID (e.g., driver’s license, state/provincial ID, etc.)
- A bank attestation or void check
- Bank statements (3 months worth)
- Processing statements (3 months worth)
- SSN (Social Security Number) or EIN (Employer Identification Number)
- The URL to your secure, fully operational website
Please note that your history of chargeback ratios must be under 2%.
E-commerce businesses must have a secure and fully-operational website.
Approval is not guaranteed. But with your application and the documentation above, SecureGlobalPay underwriters can approve your application within 48 hours. Apply now.
The underwriting process
Underwriters are tasked with reviewing business applications. They try and identify those that operate according to a sound business model and abide by all legal and industry rules and regulations.
Underwriters consider a variety of factors when assessing risk. Businesses with a history of high chargebacks or credit card transaction disputes pose a risk. Additionally, those with negative bank account balances, unpaid bills, a history of late payments or questionable credit scores are also very risky.
Merchants can take several steps to maximize the likelihood of an approved application:
- Pay all outstanding debts and bills
- Provide proof that you have some capital in the form of bank savings
- Ensure a principal in the business has a sound credit history and nominate them to apply for the merchant account
Businesses that take these steps are more likely to get approved for merchant accounts and avoid restrictions such as higher processing volume caps and lower rolling reserves.
High-ticket merchant accounts + high processing volumes
Because high-ticket merchants are considered high-risk, many online payment service providers will impose monthly credit card processing volume caps. Once merchants reach the “cap” of a specific number of transactions for the month, no further credit card payments may be received until the following month. For businesses that rely on credit card sales, this means a cessation of all business activity in the short term.
Once a merchant has proven itself to be a reliable partner, its volume processing caps can be removed in as little as three months. Reliable partners are those that pay their bills, maintain low chargebacks ratios and save some capital.
High-tickets = high chargeback ratios
High-ticket merchants are at greater risk of chargeback due to the high prices of their merchandise and/or services. It is easier for a customer to change their mind about a high-dollar purchase than an inexpensive one. Chargebacks can accumulate to the point at which a merchant literally goes out of business. Under such circumstances, banks and payment processors can be left on the hook for hefty chargeback fees.
High-ticket merchants are also at greater risk for fraud. High-dollar items like jewelry or electronics can often be shipped inexpensively and so are ripe targets for scams by cybercriminals. Items purchased and shipped overseas can end up in any number of destinations. Where fraud is concerned, the merchant, payment processor and sponsoring bank pay the price in mandatory refunds to the consumer.
Friendly fraud, in which a customer receives a product and then claims it never arrived or came damaged or did not meet expectations, involves using charge disputes as a smokescreen. The risk is all on the merchant side while the customer receives a product or service for free.
Above all, high-ticket merchants must be frank and tell processors about the high-dollar nature of their business up front. This allows the processor to set up an account capable of handling the appropriate volume and range of transactions. Failure to make this preparation can cause merchant accounts to become suspended or shut down permanently due to suspiciously high volume. This is often a characteristic of a criminal enterprise or money laundering operation.
Your chargeback ratio is the percentage of transactions which end up in chargeback. A merchant with one hundred transactions per month, four of which are chargebacks, has a 4% chargeback ratio.
Chargebacks and credit card processors
Credit card processors take a risk with high-ticket merchants. Due to the high level of chargebacks in the industry, processors must take care to minimize their own risk. When a business exceeds a 2% chargeback ratio, card associations can often fine the processor that provided the high-ticket merchant account.
Repeated chargebacks and high ratios typically lead to termination of an online payment processing account. Businesses that wish to avoid this must keep their transaction volumes high and avoid chargebacks.
Managing chargeback ratios
Managing chargebacks is possible with concerted effort. High-ticket merchants must be prepared to take steps to minimize risk. There are several ways to do this.
One proven step to minimize fraud is to require customer identification before they submit transactions. Much as some auto dealerships will have a celebratory picture taken of a new car buyer and their purchase, online merchants can request customers send a selfie of themselves holding ID.
Merchants can also:
- Review any orders that appear questionable
- Obtain a digital signature from customers during purchases
- Avoid sales from countries known for internet fraud
Payment gateways are another method to reduce fraud. When accepting mail- or telephone order payments, customer credit card information is entered through a gateway or personal terminal. Another way is to use Interac or Automated Clearing House payment processing, which enables deduction of funds directly from a customer’s bank account.
Chargebacks are often due to a customer’s failure to remember making the purchase or failing to recognize the line item on their credit card bill. Including merchant name, contact information and refund/return policies on all documents will lessen the likelihood of this happening.
Open communication will help reduce chargebacks. Once a transaction is complete, be sure to send either a paper or electronic receipt. When a dispute arises, offer an immediate refund and train staff to do likewise. The cost of refunds is negligible compared to the liability to business operations incurred by chargebacks.
High-ticket merchant NAICS AND SIC categories
A classification system known as NAICS (the Northern American Classification System) is a list of six-digit codes used by federal statistical agencies to classify business establishments. The classification system aims to gather, analyze, and publish statistical information about similar types of businesses and their impacts on the U.S. economy.
Four-digit numeric codes known as Standard Industrial Classification (SIC) codes are common in the United States and many other countries for identifying businesses and their primary purposes.
The right solution for you
SecureGlobalPay can provide a merchant account tailored to your business model. Recoup money lost by using processors like PayPal. Our easy online application process can set you on the right road today!
- No Application Fees
- Competitive rates
- No VISA/MasterCard Required
- Multiple Secure Payment Gateway Options
- LOW Rates and Fees
- No extensive credit checks