What should be investigated if a merchant’s average ticket is significantly higher than what was shown on the application?

When a merchant's average ticket is significantly higher than what was indicated on their application, the primary concern is often the potential for fraudulent transactions. A significant discrepancy can indicate that the merchant may be engaged in practices that are not consistent with their initial representations, potentially leading to fraudulent activities such as over-reporting sales during the application process to secure a lower processing rate or attempting to evade detection of illegal transactions.

Investigating potential fraudulent transactions is crucial because it helps protect both the payment processor and consumers. Fraudulent activities can lead to chargebacks and increased risk, which can ultimately jeopardize the merchant account and the integrity of the payment system.

While other factors such as improper processing of sales, increased business volume, or customer dissatisfaction might also warrant investigation in different contexts, they do not directly indicate an immediate risk of fraud in the same way that an unusually high average ticket does. It is essential, therefore, to prioritize an investigation into potential fraudulent activities when faced with such a red flag.