Charging your own card?

I debated with myself before writing this blog: is it really necessary? Is there anyone out there that doesn’t already know this information?

Unfortunately we and our colleagues in the payment processing industry deal with this all the time. My staff, who unfortunately has to clean up these messes, insist that many of the abusers are truly innocent. They simply don’t know that what they are doing is wrong.

What I am referring to is the practice of charging or swiping ones own credit card to their own business – as a quick way to get funds into their bank account. (i.e. a business owner is short $20,000 for payroll, so he swipes his own credit card for $20,000 and has the funds in his account the next day! Sometimes there may even be legitimate reasons for doing so such as when someone owns multiple businesses and he is using his card from business A to pay business B.)

I’m not here to discuss whether or not this is a financially good idea in terms of the % rate… (It’s not!)

The credit card processors strictly prohibit such transactions and will terminate any account that processes such a transaction. They’re pretty good about catching them too. Sometimes the processor will place the merchant on a blacklist that is shared with all US processors ensuring that this business will never get approved for a merchant account anywhere.

In short: never charge your own (or your family or business partners) credit card to your own merchant account.

Happy Tuesday & Happy Selling!
Kevin