Merchants are usually not aware of the fact that even if sales are literally pouring in, and its the peak time of seasonal sales, their ability to accept transactions can be shut off, and their money held up for months by respective merchant account providers. You certainly don’t want to be caught unawares during the busiest time of the year!

As odd and maddening as it may seem, merchant account providers do shut down accounts if the total dollar amount of transactions a merchant processes in a month exceeds the predetermined limit allowed by them. So, if the limit is set at $5,000 in transactions a month, and you exceed that limit before the end of month, you will be prevented from processing further credit card payments until the beginning of next month.

Not only that, in such a scenario, your merchant account provider will also hold back a significant amount of funds for months if they see a very large, sudden spurt in the total sales processed through a merchant account. This is because a huge spurt in sales gives rise to suspicion of fraudulent activity and the funds are held back as a reserve against possible future chargebacks, resulting in a cash flow problem.

Hence, the answer to “why would your merchant account provider shut down accounts when sales are increasing and a business is growing”, is simple: to protect themselves and the credit card companies from potentially huge losses from credit card fraud.

To avoid such a situation while running your business, make sure that your limits are set high enough to process all the orders you expect in a particular month. First of all, call your merchant account provider to find out whether or not you have a limit and what that limit is. Then, if it’s not high enough, ask them to increase it enough to allow you to continue doing business. Also, while including new products in your store or selling more expensive goods, inform your merchant account provider to make sure they can accommodate such a change.

If the change is not in the products but in the volume of business – you must keep an eye on the month-to-date sales and average daily sales. If you anticipate a spurt in sales, inform the merchant service provider well two weeks in advance so that they have ample time to consider your request for an increase in limit.

The best thing to do would be to ensure that your merchant service provider works closely with processing partners to give you the best programs. Their customer service experts and customer relations managers must monitor accounts on a daily basis to make sure that you and their other clients are happy with the services they provide.