Which merchants are categorized as alert merchants?

Merchants categorized as alert merchants are specifically identified due to exhibiting a high percentage of fraudulent transactions. If a merchant exceeds 8% of fraudulent transactions over a period of two months, it raises a significant concern for payment processors and financial institutions. This elevated level of fraud activity alerts these entities to increased risk, prompting heightened scrutiny and possibly the implementation of additional fraud prevention measures. Monitoring transactions for fraudulent activity is essential to protect both the merchant and the consumers, ensuring a secure transaction environment.

The other options do not relate to the specific criteria defining alert merchants in the context of fraud detection and risk management. For instance, a low volume of sales does not inherently signify a risk of fraud, nor does the lack of electronic payment methods or participation in promotional events indicate fraudulent activity. Thus, the defining characteristic of exceeding the 8% threshold for fraudulent transactions accurately identifies alert merchants and is why this answer is appropriate.