Which of the following describes 'Bust-Out Merchants'?

Bust-out merchants are those that engage in a specific type of fraudulent activity, namely bust-out card fraud. This typically involves merchants that initially appear to operate legitimately but eventually exploit their payment processing capabilities to commit fraud. In a bust-out scheme, a merchant may set up a business and build a reputation by engaging in small, legitimate sales before making a sudden large transaction with stolen or fabricated credit card information. Once they complete these transactions, the merchant essentially 'busts out' by disappearing with the funds, leaving the financial institutions and credit card issuers to deal with the aftermath of fraudulent charges.

The other options do not accurately define bust-out merchants; legitimate merchants conduct valid transactions, retailers offering discounts do not imply fraudulent behavior, and B2B sales focus on business transactions rather than fraudulent schemes. Therefore, the correct description encompasses the fraudulent aspect of their activities.