Why Kratom Merchant Accounts Get Shut Down (And How to Reduce Risk)
Key Takeaways
- • Most your account shutdowns are preventable with proper compliance
- • Excessive chargebacks are the #1 cause of account termination
- • Website compliance violations trigger many unexpected shutdowns
- • Having backup processing relationships is essential business continuity
Losing your kratom merchant account can devastate your business. Understanding shutdown triggers and implementing prevention strategies protects your processing capabilities.
Common Shutdown Triggers
1. Excessive Chargebacks
The most common reason for your account termination:
- ⚠ Warning zone: 0.75-1% chargeback ratio triggers monitoring
- ✕ Danger zone: Above 1% leads to increased reserves and restrictions
- ✕ Termination zone: Above 2% typically results in immediate closure
2. Website Compliance Violations
Processors regularly audit merchant websites. Violations include:
- ✕ Medical or therapeutic claims ("treats pain," "cures anxiety")
- ✕ Comparison to controlled substances
- ✕ Missing required disclaimers and warnings
- ✕ Customer testimonials with health claims
- ✕ Images suggesting consumption methods
3. Prohibited Sales
- ✕ Shipping to banned states (AL, AR, IN, RI, VT, WI)
- ✕ Selling to customers under 18/21
- ✕ Processing for undisclosed product types
4. Descriptor/Website Mismatch
Your billing descriptor must match your website/business name. Mismatches suggest you're trying to hide your business type, triggering immediate review or termination.
5. Fulfillment Problems
- ✕ Chronic shipping delays
- ✕ High "item not received" dispute rates
- ✕ Poor customer service response times
Prevention Strategies
Compliance Maintenance
- ✓ Monthly website compliance audits
- ✓ Remove all health/medical claims
- ✓ Maintain clear disclaimers
- ✓ Review customer testimonials
- ✓ Update policies regularly
Chargeback Prevention
- ✓ Clear billing descriptors
- ✓ Easy refund process
- ✓ Chargeback alert services
- ✓ Customer service excellence
- ✓ Shipping confirmation/tracking
Building Redundancy
Smart kratom businesses maintain multiple processing relationships:
- ✓ Primary processor: Main processing relationship (70-80% of volume)
- ✓ Secondary processor: Backup with active transactions (20-30% of volume)
- ✓ Emergency backup: Pre-approved account ready to activate
What to Do If Terminated
- Understand the reason: Request written explanation of termination cause
- Activate backup: Switch to secondary processor immediately
- Fix the issue: Address the compliance or chargeback problem
- Apply for new processing: With issue resolved, seek new relationships
- Consider specialized brokers: High-risk specialists can place difficult accounts
Frequently Asked Questions
What is the MATCH list and why does it matter?
MATCH (Member Alert to Control High-Risk Merchants) is a card brand database of terminated merchants. Being listed makes future processing extremely difficult for 5 years.
Can I appeal a termination decision?
Sometimes. If you can demonstrate the issue was corrected and provide a remediation plan, some processors will reconsider. Success rate is low but worth attempting.
How quickly can I get new processing after termination?
With a backup relationship, instantly. Without one, expect 2-4 weeks minimum for new approval, longer if MATCH listed.
Will my reserve be returned after termination?
Eventually. Processors typically hold reserves 180-270 days post-termination to cover potential chargebacks, then release remaining funds.
How often should I audit my website for compliance?
At minimum quarterly. Monthly is better. After any content updates, immediately review for compliance issues.
Can I open a new account under a different business name?
This is risky. Processors share principal information. If discovered, you'll face immediate termination and potential fraud accusations.
Ready to Get Started?
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