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create the ILLUSION of a problem
Almost everyone has heard of creating a problem and then charging money for the solution to that problem.
But lemme tell you about an even sneakier thing!
Creating the ILLUSION of a problem and then charging money for the solution to that illusion.
I own a business that sells products locally, and we also have an online store. Despite the industry we sell to (tattoo and piercing artists), our customers either pay cash or have surprisingly good credit, meaning even though we pay a high percentage for credit card transactions when we first sign up with a credit card processing company, they always quickly lower it because we’re so low-risk they want to reward us for staying with them.
Square lowered our rate three times in the first year we used them and promised to lower it again the next year. Customers with good credit AND I’m very careful about checking for fraud with every purchase that goes through my online store, and I flag anything I’m suspicious about. Only one fraud transaction slipped by me in 1-1/2 years.
So Square lowered our rate three times, but that was right before they dropped us after labeling us as being high-risk because of our products, namely topical pain relievers with lido/caine and C/B/D. Nothing ingestable.
Shopify gladly processed credit cards for us for over 2 years, lowering our rate twice until they decided to pay more attention to what we were selling.
They recently informed us we needed a third party high-risk management company to assist us, and we needed to do this within 7 days or they would pull our products from our online store. Not only that, they also started to hold our money.
I’ve dealt with merchant accounts for years. I know how they play. I know how they try to nickle and dime small and medium business owners to death. And I also know how much risk is involved for a credit card processing company.
Which is to say ZERO. NO risk.
Even if I were to sell g/uns, ill/egal substances, or even bo/dy par/ts, the credit card processor goes into it with no legal risk whatsoever because they only provide a service. You sign documents when you first create an account with them that says this, and I’ve looked into it to verify. No one can touch them.
Yet C/B/D, h/emp, lido/caine, g/uns, medical supplies, and a ton of other items have been labeled “high risk” by credit card processors, and they refuse to handle it, insisting you MUST run it through a third party.
It’s a huge issue with e/cig, c/b/d/, and ed/ibles online store owners. They’re all very frustrated by this.
The third party charges (in general) 1.9% plus a monthly fee between $5-$299, the credit card company itself charges 1%, and the company that provides your website also charges 1%. That’s standard, though it can fluctuate some depending on the companies you use.
It might not seem like much, but when you’re used to paying a flat 1.4%-1.6% for credit card processing, it’s a smack in the face.
Oh, and you might think this covers chargebacks, fraud, and other issues, but it doesn’t.
As a business owner, you’re still responsible for those things yourself, and with no questions asked and no appeal process, that money can be taken directly from your bank account at any time. There’s no such thing as insurance for stuff like this.
It also doesn’t cover cash back awards. Credit card companies split those with us as a business 50/50.
So if you want to support your local businesses, please don’t use reward cards when shopping there. Use it at Wal/mart -- they can afford it. If possible, use cash for local businesses. Even G/oogle Pay and A/pple Pay ding us!
Back to the subject: With no risk for the credit card companies no matter what I sell, they still label us as high risk because of the products, so they’ve created the illusion of a problem.
BUUUUUT they’ve also charged money for the solution!
And that’s not all.
I recently went through the whole process of signing up with a third party so I could continue to sell on Shopify. By the time I was done reading all the fine print, I realized Authorize.net owned the third party company.
Authorize.net is what Shopify uses as their credit card processing company, as many businesses online do.
My credit card processing is still going through the SAME company as before, but now I’m paying a much higher percentage.
There’s nothing any of us can do about it. A lot of shop owners have complained and tried to work around it, but there’s nothing we can do.
Major credit card companies and banks have decided this high risk thing is a thing and we NEED third party processing to be able to sell our products.
It’s yet another way to screw over small and medium business while big businesses STILL get away with tax breaks they don’t deserve, loopholes, and lots of other things we have no hope of taking advantage of.
BTW if anyone reading this sees a mistake or misunderstanding on my part or knows of a way around this, PLEASE message me!!
But lemme tell you about an even sneakier thing!
Creating the ILLUSION of a problem and then charging money for the solution to that illusion.
I own a business that sells products locally, and we also have an online store. Despite the industry we sell to (tattoo and piercing artists), our customers either pay cash or have surprisingly good credit, meaning even though we pay a high percentage for credit card transactions when we first sign up with a credit card processing company, they always quickly lower it because we’re so low-risk they want to reward us for staying with them.
Square lowered our rate three times in the first year we used them and promised to lower it again the next year. Customers with good credit AND I’m very careful about checking for fraud with every purchase that goes through my online store, and I flag anything I’m suspicious about. Only one fraud transaction slipped by me in 1-1/2 years.
So Square lowered our rate three times, but that was right before they dropped us after labeling us as being high-risk because of our products, namely topical pain relievers with lido/caine and C/B/D. Nothing ingestable.
Shopify gladly processed credit cards for us for over 2 years, lowering our rate twice until they decided to pay more attention to what we were selling.
They recently informed us we needed a third party high-risk management company to assist us, and we needed to do this within 7 days or they would pull our products from our online store. Not only that, they also started to hold our money.
I’ve dealt with merchant accounts for years. I know how they play. I know how they try to nickle and dime small and medium business owners to death. And I also know how much risk is involved for a credit card processing company.
Which is to say ZERO. NO risk.
Even if I were to sell g/uns, ill/egal substances, or even bo/dy par/ts, the credit card processor goes into it with no legal risk whatsoever because they only provide a service. You sign documents when you first create an account with them that says this, and I’ve looked into it to verify. No one can touch them.
Yet C/B/D, h/emp, lido/caine, g/uns, medical supplies, and a ton of other items have been labeled “high risk” by credit card processors, and they refuse to handle it, insisting you MUST run it through a third party.
It’s a huge issue with e/cig, c/b/d/, and ed/ibles online store owners. They’re all very frustrated by this.
The third party charges (in general) 1.9% plus a monthly fee between $5-$299, the credit card company itself charges 1%, and the company that provides your website also charges 1%. That’s standard, though it can fluctuate some depending on the companies you use.
It might not seem like much, but when you’re used to paying a flat 1.4%-1.6% for credit card processing, it’s a smack in the face.
Oh, and you might think this covers chargebacks, fraud, and other issues, but it doesn’t.
As a business owner, you’re still responsible for those things yourself, and with no questions asked and no appeal process, that money can be taken directly from your bank account at any time. There’s no such thing as insurance for stuff like this.
It also doesn’t cover cash back awards. Credit card companies split those with us as a business 50/50.
So if you want to support your local businesses, please don’t use reward cards when shopping there. Use it at Wal/mart -- they can afford it. If possible, use cash for local businesses. Even G/oogle Pay and A/pple Pay ding us!
Back to the subject: With no risk for the credit card companies no matter what I sell, they still label us as high risk because of the products, so they’ve created the illusion of a problem.
BUUUUUT they’ve also charged money for the solution!
And that’s not all.
I recently went through the whole process of signing up with a third party so I could continue to sell on Shopify. By the time I was done reading all the fine print, I realized Authorize.net owned the third party company.
Authorize.net is what Shopify uses as their credit card processing company, as many businesses online do.
My credit card processing is still going through the SAME company as before, but now I’m paying a much higher percentage.
There’s nothing any of us can do about it. A lot of shop owners have complained and tried to work around it, but there’s nothing we can do.
Major credit card companies and banks have decided this high risk thing is a thing and we NEED third party processing to be able to sell our products.
It’s yet another way to screw over small and medium business while big businesses STILL get away with tax breaks they don’t deserve, loopholes, and lots of other things we have no hope of taking advantage of.
BTW if anyone reading this sees a mistake or misunderstanding on my part or knows of a way around this, PLEASE message me!!