Prevent Payment Processor Holds & Bans
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It’s more common to see payment processors starting to hold money or even worse block you entirely. For most platforms like Stripe, if you’ve been banned, your name is on a blacklist.
This means that if later you will want or need to use stripe, you can’t. It’s been blocked forever…
In this blog post I will share how you can first of all prevent holds and more importantly bans.
Why do holds or bans happen?
In simple words, holds happen once the payment processor sees you as a high risk. This means they look at your site, they see that you’re dropshipping or you have low-quality products. This raises a red flag.
Then if they see you getting a ton or refunds or even worse chargebacks, they will put their focus on you. Once they do, for the safety of themselves and the customer they will start to hold money.
This triggers a negative feedback loop where you start to have cash flow issues and it becomes difficult to buy the products and pay for ads at the same time…
The reason why bans happen is because your chargeback rate is over 1%.
If your chargeback rate is higher than 1% you’re seen as a high-risk merchant. That’s why on the Thank You page you have to clearly explain to your customers what LLC you will bill them from (so it doesn’t seem suspicious to them) and have a great customer support team so you can refund before they chargeback!
How to prevent these issues?
Firstly, invest in having a great customer support team. The quicker your responses, the smarter the people you have on your team, the higher the likelihood your customers will have a better experience if they message the support.
However if you’re getting lots of customer support inquiries, you’re just putting a bandaid on a larger cut.
So then try to solve the problem at it’s core. Get a better supplier. Good suppliers will help you get faster shipping, higher quality products so your customers are more satisfied. This solves the bulk of the issues.
What to do if you get payment holds?
There’s no simple fix here. The best one is to have a good balance sheet. Meaning you always keep cash in your business. So that even if you get holds, you can easily continue scaling ads and paying to ship out the product.
Most payment processor issues happen because of lack of cash flow. If you truly want to grow your business, make sure you have plenty of cash stacked so you can use it in case of emergency.
Once you’ve implemented all these tips you should be set to scale. In that case it will be time for you to get one of our video ads. Simply tap the button below and test our video ads 20% off!