What are Document Preparation Businesses?
Have you ever needed to find a student loan, but are overwhelmed by the options? Not to mention, the lengthy process it takes to see if you qualify in the first place. Or, you’re ready to start a new business, and need to have documents such as articles of incorporation ready to go.
Document preparation businesses aid customers in filling out applications, checking for eligibility, proofreading, and more. Some preparation companies specialize in a few areas, such as law, while others cover a whole range of services.
Document Preparation Businesses are High Risk
Financial institutions measure business’s risk level when providing merchant services. This protects banks and payment processors from businesses with a high level of chargebacks. However, many businesses and industries are high risk by nature. Document preparation businesses fall into this high risk category.
Multiple factors play into document preparation business’s risk level. The chance of fraud and chargebacks become likely for document preparation merchants, whether they work alone or have employees
Why are Document Preparation Businesses High Risk?
Chargebacks occur when customers file a dispute against a company. Businesses with a high chargeback rate may be prevented from owning merchant accounts and even from operating. Document preparation merchants are more likely to incur chargebacks than in other industries. Therefore, it is considered to be a high risk industry.
Not a Common Service
Certain life circumstances and events prompt people towards using document preparation services. These can be legal matters, such as divorce or creating wills. Other reasons may include applying for loans or starting a business.
It’s not everyday that people are in need of document services. The industry is not like the technology or clothing industry where there is a frequent flow of business.
Financial institutions consider the likeliness of success when evaluating merchants. A document preparation business may have an uneven flow of business month-to-month.
Card-Not-Present Transactions
Large Ticket Services
Large ticket averages refer to the average price of a service or product. Document preparation businesses charge amounts higher than a common business.
Chargebacks have an expensive effect on the merchant and processor in large ticket disputes.
Service-Based Business
Service-based businesses are high risk by default. They sell at high average prices and are more likely to face customer dissatisfaction.
Document preparation services work with individual cases which may not result in what the client was aiming for. An example would be a client using a document preparation business to have a better chance of qualifying for a loan. The client may not end up getting the loan, even if the business did their best at completing the paperwork. Disgruntled clients may file disputes claiming that they haven’t received the quality of service they expected.
Personal Data
Filling out documents for loans, mortgages, wills, and business matters involve personal information. This sensitive content is passed through the internet or the phone, which then becomes susceptible to hacking.
Stolen information becomes the liability of document preparation services. This contributes to a reputation that using these services is risky.
How to Reduce Chargebacks in your Document Preparation Business
Chargeback Monitoring
The biggest reason why chargebacks occur is that merchants are unaware of incoming disputes. Keeping track of disputes is a tedious process that many don’t have the time for.
Tools like chargeback alerts let businesses know when a customer has filed a dispute. This then gives merchants time to resolve the issue with the customer and their bank so that a chargeback does not occur.
Customer Service
Document preparation services require diligent communication with clients. Customer service is a large proponent to achieving client satisfaction. It also gives customers the confidence that they can come to the business in the case of an issue.
Many times, customers will go to banks with a problem they have with a merchant before talking to the business themselves. The response is usually a dispute. It’s in a document preparation business’s best interest to do what they can to have customers come to them with complaints before going to the bank.
High Risk Merchant Services
High risk businesses need merchant services that can handle complications with the right tools and knowledge. Payment processors and other services can reduce chargebacks and stabilize your business finances as they are willing to take the risk.
Revitpay is a high risk merchant services provider equipped to help document preparation businesses succeed. Contact us today to learn more about how we can aid you in serving your customers.