charge card deposits

[Carol]

When I first got my merchant VISA a few years ago I was required to place several thousand dollars on deposit as security to cover any chargebacks, etc. Was talking to my issuing company about something else, and found out (by chance) that I can apply to have my account reviewed and request the money be released because I have been with them longer than 3 years and have had no disputed chargebacks. I certainly wasn't aware of this and am fairly certain it's not a policy that card issuers publicize.

Thought some of the board members might find this worth checking out, although this policy may vary from issuing company to issuing company. What could you do with an extra few thou??

[Larry Lunsford]

I signed up with Discover a few months ago and they didn't have any requirement for such a deposit.

[Bert Weiss]

Thought some of the board members might find this worth checking out, although this policy may vary from issuing company to issuing company. What could you do with an extra few thou??

I think I know what you could do with such a windfall.

[Marty]

I've never heard of that- might be a Canadian thing, eh?

Hope you were earning interest on the account.

A few extra thou? I'd buy a glass lathe.

[Kitty]

the issue of chargebacks is the #1 reason i've heard for banks not granting VISA/MC deposits for business accounts held by small businesses. it's potentially a big liability for the bank. around here, they are especially negative to home businesses (no storefront), both for the chargeback issue, and because being able to deposit credit card receipts is a method for money laundering. when i used to do public shows and retail my stuff, i wanted to be able to take credit cards, but my bank said no for the chargeback reason. a friend of mine who banks with a different bank than mine, but still a hawaii bank, got set up for it with no questions asked. i guess you gotta shop around, see who's offering what. in the end, it didnt matter for me because i quit doing shows and only sell wholesale to stores.

[Brad Walker]

The answer is to find another bank.

Each bank has a different policy, and sometimes it varies even by locality. When I set up my merchant account, I was told by two banks (big name banks: Wachovia and Bank of America) that it would cost me extra (either in a deposit or in higher fees) to have an account to take charges on the internet. The reason they gave: too many chargebacks from small online businesses.

So I went to other places, and had no trouble finding three that would open a merchant account with me at a lower rate than the first two, and with no deposit required or predisposition against small internet businesses. I chose one from the bunch, and haven't looked back.

The financial service industry is very competitive, with lots of companies trying to get your business. If you don't like the service you're getting, look around. There are almost always better alternatives.

[Carol]

I've never heard of that- might be a Canadian thing, eh?

Hope you were earning interest on the account.

A few extra thou? I'd buy a glass lathe.

It sounds like it might be a Canadian thing, judging by the response. We only have a handful of banks up here, however even with just those few, things are a lot more competitive now than they were 8 years ago. Yes, I was earning interest, however I'm looking forward more to an insulated ceiling in the shop and a larger kiln, giving the paltry interest rates.


C.

[Kevin Midgley]

No deposit on my Scotia Bank machine but they are raising their charges all the time. Like from 15 cents a debit card transaction to 50 cents making it higher than visa transactions for small items. Any suggestions out there? The obvious one is only sell big stuff! Kevin in Tofino.

[PaulS]

What could you do with an extra few thou??

Take the family skiing in Banff -can't be too far from you?