What may large dollar credits indicate about a merchant’s financial practices?

Large dollar credits within a merchant's financial practices can often indicate a strategy of layering money among accounts. This practice may involve transferring funds between various accounts for reasons such as asset protection, liquidity management, or to present a more favorable balance to financial institutions.

When merchants engage in layering, they can create an appearance of healthy financial activity by moving money strategically, which might attract investors or manage creditor perceptions. This practice is often scrutinized during audits and could raise red flags if it is not accompanied by clear and legitimate business activities.

In contrast, customer loyalty, investment in growth, and increased sales revenue typically manifest through visible business outcomes such as repeat business, capital expenditures, or higher sales figures. While these elements might also affect the overall financial health of a merchant, large dollar credits specifically point more toward the maneuvering of funds rather than direct business growth or customer activity.