I am wondering how many others have experienced the nightmares of merchant account providers? My last experience made me give up and lose hope in e-commerce.
A few years ago while running a very successful online and offline business selling physical products, my merchant account service provider came in and swiped out about $60k from my checking account.
This had been going on for several months prior to this. The amounts would vary. It seemed that anytime we did any volume, they would come swipe it for themselves and hold it.
Some days, they would take $1,800, some days $8,500. With the constant cost of business, we needed every dollar to pay the bills and to pay ourselves. Suppliers, dropshippers, employee paychecks, etc, etc.
Needless to say, someone else coming in and taking money that didn't belong to them was infuriating. But why would a merchant provider do this? If you've been in business for a while you already know the answer. They did this because our sales were way above and beyond what we had signed up for. But our sales were this high because of promotions, holiday seasons, etc. Also just due to the fact that year
after year we had grown, like any business does. I honestly never knew we would be hitting those numbers or I would have told them this in the beginning.
Long story short, I told them that our monthly volumes would never exceed 50k. A few years into business I had a December one year hit over $270k. They freaked out understandably. I tried to explain it was because of the holidays and I sell games. They didn't care. They proceed to tell me they were holding my money for 180 days.
I had enough. I just gave up. I went out and got a job which I still work to this day. I still think it was one of the biggest mistakes of my life.
What I -should- have done initially is not under estimate anticipated volumes when they ask the question on the application to get the account. Since it was too late to go back in time, what I -could-have done is warned them that Christmas season is coming and we are more present on the web than ever and have tons of advertising in place so expect a very busy season and a high volume of cards from our website.
The take away from all of this for me personally is to take more time in the planning phases of business. I dread the thought of doing it all over again, and not even sure if I will. It has crossed my mind a few times and last year I started an LLC but haven't done a damn thing with it.
Looking back, I do miss my freedom, but I don't miss the stress. I have a good job that pays in the six figures + good benefits, so I should be happy. The problem is the job requires me to be out of town
for weeks at a time.
P.S. If (with a big capital "I") I ever get back into the biz, I will be much more selective with merchant providers, and I will totally exagerate on the high end when they ask me about my monthly anticipated volumes. Just to error in the side of safety.