Tour Guide Merchant

Tour guide merchants are considered high risk for a number of reasons. If you are a tour guide merchant you are probably already are aware of this. Tour guide businesses operate with a business model that provides a higher risk to processors and banks working with these merchants. Lower risk banks and processors will not even underwrite a tour guide business because of the risk involved. The risk appears with the operation of the business and services provided. There is always a heightened chance of chargebacks when the products or services are provided later on and not at the time of the charge or purchase. Since this is the case with tour guide businesses, chargebacks are increased from the beginning. The length of time from the purchase to the tour allows for time for buyer’s remorse to set in. Most tour guide businesses do not want to refund purchases for tour guides since they are set with other groups so this leaves customers having to chargeback to get their money back.

A tour that is not well described or delivered exactly how it was sold will also attract an increase in chargebacks from customers. If a customer is not fully pleased with the service and the tour a dispute can appear after the tour as well. This becomes a headache for all parties involved since the service was already provided. The ticket size of the purchase is also another potential issue with providers. The ticket size for travel and tour guide services is usually higher than normal. Put this together with the increased risk of a chargebacks and you have a number of banks that will not accept your account. Refunds are another area that could be considered problematic. Refunds are supposed to stay under 5% of the total volume of an account in any given month. Tour type businesses will have a higher refund percentage mainly because of the time difference from the sale to the tour. This time allows for buyers to ask and receive refunds, more so than a normal business that provided a product or service at the time of the sale.

Merchants operating a tour business must make sure that they are processing their orders with a merchant account processor that is a high risk processor. A merchant that applies and starts processing with a low risk processor will quickly have their account closed and their funds frozen for 6 months from the bank because they will be afraid of chargebacks. Offshore Merchants has been providing high risk merchant accounts for years and they are able to provide merchant services for nearly every industry type including tour guide businesses. Rates and fees can vary depending on whether the account is a domestic or offshore account. Rates are more likely to be lower with a domestic merchant account compared with an offshore merchant account. The monthly volume a merchant is willing to process is also a deciding factor with the rate provided to the merchant.

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.

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