ouldn't your business run much more smoothly if your acquirer didn't care about risk? Wouldn't customer satisfaction be a million times better if funds were never held?

We understand, but the problem is, your acquirer underwrites every single one of your applications. And that means it's on the hook for every single one of your merchants' sales, every day, for six months. Acquirers need to protect themselves, so they hire risk managers-like me.

Of course, you understand, right?

The thing is, we're not in this business to hold money, frustrate your merchant or lose a deal. We are truly in the business of getting your merchants approved and processing profitably. We are on the same page.

So, here's what you need to know to get your deals done and your merchants processing smoothly, without any intervention from risk management.

Be Honest and Clear with Applications

In the typical scenario, you're out pounding the pavement trying to sign up merchants, and merchants want to get the best rate for the least investment of time and energy. So what happens? You whip out applications, ask a few questions, and pencil in the answers. The information is hard to read, so it gets entered and filed incorrectly.

The merchants weren't paying attention, so their businesses are not fully and accurately represented. As a result, a traditional brick and mortar retail store, for instance, fails to mention that it also processes mail order transactions.

This may seem like a minor problem, but it is far from it. If the application isn't clear or accurate, our systems will flag internal risk parameters, and we will place funds on hold. Risk managers will have to explain to your merchant why funds are being held and what needs to be done in order to get funds released and prevent the situation from recurring.

In fact, some 70% of the funds we put on hold are put there because business is being conducted outside the parameters set forth in the application. Not fraud, not chargebacks, not deliberate misrepresentation, but simply an application filled out too quickly by a sales rep anxious to close a deal.

Separate the Wheat from the Chaff

We're all better off if fraudulent businesses are identified before they have a chance to do damage. So, whenever feasible, do what you can to make sure the information you are taking down on the merchant application is legitimate.

Visit the brick and mortar location. Does it exist? Is the neighborhood viable for business growth? Eyeball inventory. Will it support the volume of sales your merchant claims to produce? For instance, if merchants are selling electronics, and they actually own their inventory, then there should be a warehouse stocked full of products to fulfill the demand.

On the other hand, if a retail clothing store wants to process $20k but only has one rack of clothing hanging in the corner of the store on wheels... watch out. If you are at all uncertain of the validity of any merchant's claim, check it out. Because at some point, risk management will.

Make Sure Your Merchants Understand Their Own Risk

Talking about chargebacks in the middle of a sale is probably not a great deal closer, but forewarned is forearmed. Merchants who truly understand the ramifications of accepting credit card transactions are far better equipped to handle problems if they do occur and far less likely to "shoot the messenger."

It's amazing how many hours we spend talking to merchants who don't even understand the concept of a chargeback, never mind the details. But the bottom line is quite clear: Customers have the power to deny the validity of a sale, and the burden of proof falls on the shoulders of the merchant.

Ask Intelligent Questions, and Note the Exceptions to the Rule

Our job in risk management is to protect the processor. Sudden changes to the norm flag our system. They warn us that something is not what it should be-that the predictable has become unpredictable. It gets our attention, and if we are unsure, we will hold funds until the situation straightens out.

This is where a careful and attentive sales rep can stop trouble before it begins. Some businesses, such as garden centers or snowplows, are seasonal. For merchants like these, sudden jumps or dips in processing volume is not a warning of something gone amiss; it is the norm. But you need to tell us this.

Act as Though You Were Taking 100% of the Liability

If your goals are to provide good customer service and prevent problems before they occur, then many risk problems can be averted. Understand the warning signs of fraud. Be suspicious of credits without offsetting debits, swiped charges taking place outside of normal business hours, or a lot of unusually small transactions.

Understand that exceptions to the norm will send up a red flag. Take care to represent your merchants accurately and adequately on all applications. And understand that risk management is on your side and for your benefit. Many instances of fraud (though, admittedly, not all) can be detected, and many inadvertent mishaps can be avoided. Risk management departments aren't going to go away, but if you understand where we're coming from, you'll find that risk managers are actually a rather warm and fuzzy group of people.

Kimberly Marvin is Risk Manager for Cynergy Data, a merchant acquirer that provides a wide array of electronic payment processing services while continually striving to develop new solutions that meet the needs of its agents and merchants. In addition to offering credit, debit, EBT and gift card processing, along with check conversion and guarantee programs, the company offers its ISOs the ability to borrow money against its residuals, to have Web sites designed and developed, to provide merchants with free terminals and to benefit from state-of-the-art marketing, technology and business support.

Founded in 1995 by Marcelo Paladini and John Martillo, Cynergy Data strives to be a new kind of acquirer with a unique mission: to constantly explore, understand and develop the products that ISOs and merchants need to be successful and to back it up with honest, reliable, supportive service. For more information on Cynergy Data e-mail Nancy Drexler, Marketing Director at nancyd@cynergydata.com.