Merchant Accounts for Seasonal Businesses

Choosing a Seasonal Merchant Account Provider

For seasonal businesses, transparency is key. You’ll need a processor that isn’t skittish about big seasonal swings in transaction volume and you’ll need to be open with them about the seasonal nature of your business. Additionally, finding a processor that has no or low monthly minimums for your off-months will be critical. Here are some important factors to consider:

Contract or Month-to-Month?

While it can seem like a no-brainer to choose an option with no long-term contract, some small business owners prefer the peace of mind from not having to “re-start” payment processing each season. Some processors offer contracts with a “seasonal shutdown” option, allowing you to keep your merchant account active but “dormant” in your off months. That means no or low costs to you when you’re not open for business.

Neither option is better or worse as long as you’re not locked in by cancellation fees. If you prefer to have the stability of a consistent processor and are okay with a contract, that’s fine. If your business is new and you’re uncertain about the future, a month-to-month option might be a better fit. In either case, be sure to avoid cancellation fees whenever possible.

Multi-Location Considerations

Are you running several seasonal shops at the same time? If so, you’ll need to ensure that your payment processor sets you up for a multi-location merchant account. That enables you to take payments across the various sites while still consolidating your financials and reporting. That’s key for seamless end-of-season bookkeeping.

Equipment

If you’re selling in person, you’ll need to think about how you’ll physically take credit and debit cards. Do you have a temporary storefront as a popup shop or seasonal business with a physical presence, like an ice cream shop? Or are you on the go, like a food truck or vendor at summer festivals?

If you have a regular location, you may want the convenience and features of a countertop credit card machine or lightweight POS system. If you’re on the go, a smartphone or tablet card reader is likely a better fit. Businesses that take payments in many different locations find that portability is key – even small countertop machines can be too much of a hassle to bring on the road or to a tradeshow. Solutions explicitly designed for mobile card acceptance can help.

Fortunately, most processors offer a variety of options for accepting cards as well as newer payment methods like Apple Pay and digital wallets. When considering a processor, be sure to ask about supported brands and modes to help you decide on the right machine for your needs.

Multi-Channel Sales

If your seasonal business operates online and in-person you’ll need to ensure that your merchant account is set up to handle both routes. Look for a payment processor that supports both in-person and online sales with a consolidated reporting system. This can help you track inventory across both the physical and digital sales in addition to providing a fuller financial picture.

Reporting

Do you need advanced reporting capabilities or is basic transaction data enough? If you like to dig into sales trends from previous seasons to help guide inventory decisions or forecast future sales, it’s a good idea to look for processors and machines with advanced reporting capabilities. Those tools can show you best-selling items, highlight busiest times of day, and provide other key data that can help you make smarter decisions in the limited seasonal sales window. You can also use this information to create targeted marketing promotions and highlight your products on social media.

Challenges for Seasonal Businesses

Seasonal businesses often have big swings in sales volume. Peak shopping periods such as summer or the holiday season will see big increases in sales, which drop sharply (even to nothing!) in the off-season. While these spikes are great for your bottom line, they can make processors nervous if they aren’t expecting it. In the processing world, big swings in volume can signal potential fraud. From your processor’s perspective, it’s difficult to tell if a big swing is a seasonal swing or a possible problem.

Here’s how to alleviate any issues:

Communicate with your processor.

If you expect an increase in sales, contact your processor in advance to let them know. In most cases, your processor has a “profile” of your processing volume, which can include processing limits. If your processor is aware of an increase in sales, they can work with you to increase the limit and ensure smooth processing. You don’t want to risk having payment problems during your busiest times. The easiest way to avoid that is communicating in advance. \

Keep chargebacks low.

Seasonal businesses are just as vulnerable to chargebacks as other businesses. Make sure you have fraud prevention measures in place, such as using machines with the latest encryption technology and maintaining PCI compliance. Have clear return policies and, whenever possible, work with customers to find an agreeable solution so they don’t turn to chargebacks.

Have a backup plan.

Hopefully you won’t need it, but it doesn’t hurt to have a backup plan in case you have an issue accepting cards. Consider accepting payments through QR code, such as approved Venmo for Business options, or offering a cash discount to customers that skip the credit card.

Monitor your account in the off-season

Even if you have a “seasonal shutdown” in place, it’s a good idea to continue to keep tabs on your merchant account. Make sure you’re not incurring unexpected fees that would otherwise go unnoticed. If anything looks off, be sure to contact your processor. Some processors do have monthly minimum fees, so you may have charges even if you’re not using your account. Before signing up, be sure you understand any monthly minimums as well as policies for seasonal shutdown. Confirm if monthly minimums apply during seasonal shutdowns, and get everything in writing.

Credit Card Processing Costs for Seasonal Businesses

As with everything in credit card processing, your specific costs will vary. The actual rates depend on your industry, transaction size, monthly volume, how you accept cards, and more. But seasonal businesses can still get competitive credit card processing rates, and these days there are more choices than ever.

Roughly speaking, if your business is just starting out, processes under $5,000/month in cards or has low average transaction sizes ($10-$15 per sale) a flat rate credit card processor will likely be your best bet. Popular flat rate companies include Square and PayPal. If you have larger transactions and more volume, it’s worth shopping around to see what you’re able to get for rates from traditional interchange plus credit card processors.

CardFellow.com offers a convenient credit card processing marketplace for comparing pricing from multiple processors in one location. It’s free, private, and no obligation.

Running a seasonal business is both exciting and stressful. But choosing a good merchant account that meets your needs doesn’t have to be. By researching the right processor and communicating about volume spikes, you can ensure a smooth experience all season.

Need help finding a processor? Sign up at CardFellow.com today!