As a business grows and changes their product and service offerings also evolve, and business owners need to make appropriate updates, so their merchant accounts stay in good standing. In addition, when inventory changes, so do the risks associated with the merchant accounts, and that is something a service provider will want to know before any significant changes are incorporated.

When is it Time to Notify a Service Provider?

When your merchant account was originally approved it was approved based on the products or services you were selling at that time. As long as you’re adding inventory that falls under the same SIC code (type of business) and range of prices, I wouldn’t be too concerned about updating the processor. If the new product or service has a much higher price than your current offerings, it would be a good idea to call your processor.

On the other hand, if you were originally approved to sell baby clothes online and you’re decided to sell auto parts too you definitely need to call your processor before running any auto part related credit card transactions through your current account. There is a good chance you would need to set up a 2nd account when product line changes that dramatically or you set up multiple websites.

Notify a Provider Sooner, Rather than Later

Whenever there are major changes with inventory or service, and the acquiring bank (the bank that processes your transactions) for the merchant account will need to review this information in regard to the terms when the account was established. Making product or service changes can also increase the potential number of chargebacks, and in turn ups the financial liability of the bank.

In this case, notify your merchant before making any big changes in the type of inventory or adding inventory with a drastically different per unit cost. New merchant accounts will need to be opened to sell these products.

However, if the new inventory is similar in nature and cost and no significant changes in risk are expected, then there is no need to contact the merchant provider as they are in line with the original agreement.