It wasn’t too long ago when the Yellow Pages were the primary form of advertising for small businesses. The yearly publications would be delivered to homes and businesses and customers would navigate the pages to review and call on merchants. Businesses would spend thousands of dollars on advertising, some taking out full page ads.
Today you can find a business with simple keywords in the browser. While websites are critical to a business a primary resource is online ratings. Customers want to check out a business by reviewing other customer ratings. The social footprint has taken hold and steadily becoming the must have for businesses to distinguish themselves online as reliable merchants.
Yelp, Google, Facebook, and others provide platforms for customers to comment about their buying experiences. While it is very good for a business to receive positive comments the context of the comment can become a double edge sword. For example,
• “John Doe’s Vape Shop offers the best bongs in town for the lowest prices”
• “Mary’s Smoke Shop has a great selection of CBD products”
• “XYZ has awesome glass to smoke your Ganja”
I have redacted the business names here but the comments are actual postings. You might laugh at them but when it comes to a Smoke or Vape shop wanting to accept card payments or continue accepting, the comments can very destructive. The context of them implies the merchant is supporting the use of narcotics as defined by the federal government. The payment processors have clearing banks which must comply with Treasury guidelines if they are FDIC/NCAU backed. Any implied reference in support of drug paraphernalia will create issues for the merchant account.
The standard rule of thumb to follow by when promoting your business online is simply to drive home the primary aspect of your business. Stick to what is core about your store and stay clear of any messaging that implies supporting any drug usage which the Fed would take issue. Simply selling Frisbees and T-Shirts with the Marijuana leaf image on it could find your merchant account being declined or terminated.
A complication for merchants is MATCH (Member Alert to Control High-Risk) which is more commonly understood as TMF (Terminated Merchant File). In a nutshell, it is a listing for processors to identify high-risk merchant before entering into a merchant agreement, it is essentially a backlist of sorts that merchant processing banks access to verify a new merchant whom wants to do card processing via them. If a business is on the MATCH and cannot get itself removed, it is listed for 5 years. The listing can cost a business substantially as processors who are willing to support MATCH listed merchants will charge effective discount rates upwards to 10%. For some businesses that is too much taken off the top and the listing becomes a death sentence to their business.
What most merchants do not understand, it doesn’t take much to get listed. Generally, the excessive fraud committed by a merchant gets them listed. Yet “excessive fraud” could mean several things from actual high chargebacks to selling products which are different than what was described on their merchant application. In the Smoke & Vape industry, one needs to be careful on how your business was or is being listed in the merchant application. A quick way to confirm accuracy is to verify the MCC (Merchant Classification Code). Insure it properly indicates your business class. The best way to prevent a MATCH listing is you the business owner taking the steps and asking questions of your merchant processor representative.
Back to the social footprint, what is mention out there about your business can impact and impede your business if the processor deems the online descriptions and ratings are vastly different than what was originally stated on your business or they simply decide based on the online comments your business is conducting sales of products which they cannot support. They could place you on MATCH based on the excessive fraud aspect.
Check your social footprint on a regular basis as what is said online perceptually creates an impression on your business. Some perceptions are great and others can have extreme negative consequences. SVBS
Joe Radest and 1 Step Technologies provide complete end to end business management and secured payment technology solutions, which affords business clients the ability to securely transact payments without having sensitive data touching their environment. In addition to 1 Step Technologies, Joe is an equity partner in two other payments companies – Payix Holdings and Fortress Payments Technologies, and serves on two boards. He can be reached by phone at 770-731-0414 or by email at [email protected]