3 Mistakes Travel Agencies Make When Working with Merchant Services
For the smooth functioning of their businesses, travel agencies need to work with merchant services. But it is not easy to find the quality merchant service provider. However, if travel agencies stop making certain mistakes, they can work in harmony with any merchant service provider.
This article contains 3 mistakes that travel agencies make while working with merchant services. Being aware of these mistakes, you too can avoid them and prevent any disputes with merchant services.
1. Ignoring the chargeback ratio
When a transaction is disputed by a customer, the end result is usually a chargeback. If there are too many chargebacks (chargeback ratio over 1%), your business gets red flagged by most of the merchant service providers. The chargebacks faced by a travel agency are usually more than the average chargebacks faced by an average merchant.
This happens because people usually plan and book their tours in advance and when something unexpected happens, they cancel their journey. When a customer cancels the trip, but don’t get a refund, they take major next step and dispute a charge.
For a travel agency, it is important not to ignore the chargeback ratio if it wants to work in harmony with merchant services. Their chargeback ratio shouldn’t surpass or remain higher than 1%.
2. Ignoring the changes done in policies by merchant service providers
Merchant service providers often make changes in their policies. These changes usually address the high-risk merchants. As you know that travel agencies are one of the riskiest businesses of the present time, it can be risky to ignore the changes done in policies by merchant service providers.
Merchant service providers are usually worried about losing the money if they provide merchant card services to travel services. Because of the competition and intention to gain profits, they provide services to travel agencies but their concern/ worry doesn’t end.
This leads to frequent changes in the policies and when a travel agency ignores these changes done in the policy by merchant service providers, they lose.
3. Adding an international account
A travel agency needs to remain cautious while adding an international account because, in comparison to domestic accounts, it might be void of appropriate protection. It means the international account is not governed by the same rules and regulations as a domestic account.
This attracts a red flag by the merchant service provider and the merchant account of your travel agency might get closed or frozen. Remember that handling different rules and regulations when a travel agency operates domestically and internationally is a bit tricky but you can consider the following things to prevent yourself from any kind of hassle:
· Run the business with the assistance of a reputed travel law agency. This will help you comply with all local, state, national, and international rules related to travel agencies.
· Be a part of some trade association that has resources capable to handle the legal issues occurring between travel agencies and merchant services, both domestically and internationally.
· Get covered with liability insurance so that your agency can remain protected in case a claim is made against the occurrence of any error.
So, these are the three common mistakes travel agencies make when working with merchant services.