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Timeshare Merchant Account

Timeshare advertising and timeshare resale is a large business mainly throughout the USA. These businesses find the task of acquiring a merchant account a very difficult and time consuming process. The risk surrounding these types of accounts only adds to the difficulty of obtaining one. Some banks and payment processors regard timeshare resale as one of the most risky of all business types.

There are several reasons why these accounts are regarded as so risky for banks and processors. All timeshare businesses operate with large ticket transaction amounts. Most banks and payment processors dislike large transaction businesses since there is more liability on their end. If a merchant is running an online retail business with an average transaction of $100 and processes $100,000 for the month, they would have processed 1,000 transactions. Even if 20 of these orders are charged back the bank is still in a safe position and there is a good chance that a merchant will not close up shop and leave the bank holding the bag if they have 1,000 sales in a month. Now, for a timeshare merchant, if they process 40 orders at $2,500 and 4 or more get charged back or refunded the merchant may not continue processing after that month and the bank is liable for the losses from that month and the next 5 months since chargebacks are able to be processed for up to 6 months from the date of the sale. There is a better chance 40 orders will be charged back than 1,000 orders. Other problems surrounding timeshare merchant accounts are that advertising the sale of a timeshare does not guarantee a sale. If a customer is spending $1,500-$3,000 to sell their timeshare, it better sell or you have a very unhappy customer. The last point rolls into the next point of high chargebacks. Advertising and not a guaranteed sale creates a high number of chargebacks when there is no sale. The customers that purchase timeshare advertising are usually not opting in. They are usually cold called from a telemarketing room. These customers are mainly elderly or older, the sales person usually uses high pressure sales tactics in order to close the sales which creates a higher than normal level of buyer’s remorse.

Timeshare merchants do use a few different tactics in order to lower their chargebacks. Since the orders are all done over the phone and manually logged into their system, the merchants are now recording the calls. All merchants are now requiring a signed contract before charging their client’s card. Lastly, merchants are quickly refunding cards in order to prevent chargebacks.

A timeshare merchant is able to help their business when applying for a merchant account with Offshore Merchants by providing solid card or check processing history and having a favorable BBB rating. The bank will definitely be looking for these. Contact Offshore Merchants today to see what they can do to assist your timeshare business with opening up a merchant account for accepting card and check payments.

Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.