Request an online demo
Get a personalized online demo of Kount's trust and safety technology at a time and date of your choosing.
Average Monthly Sales Volume
A merchant’s average monthly sales volume is calculated as the total value of sales processed in a year divided by 12 months. If a merchant is launching a new business and doesn’t have any processing history, the merchant may be asked to provide an estimate.
Average monthly sales volume is a metric that processors usually consider when evaluating merchant risk. As a result, it can be a determining factor for merchant account approval or denial.
High sales volume is considered to be a risk because every dollar processed is a dollar of potential chargeback liability for the processor. In order to keep risk in check, some merchant accounts will have a limit set for maximum monthly sales volume.
If a processor sets a monthly sales maximum, the merchant is expected to stay below the limit. Meeting the monthly threshold might be considered risky behavior — especially in the first few months of processing. If a merchant regularly meets the volume maximum, the processor may conduct a risk review. If the review reveals potential liabilities, the merchant account may be closed.
As a precaution, merchants may want to establish and abide by their own sales thresholds that are well below the official limits set by the processor.
It’s also important to note that processors may require a merchant account reserve to offset any potential liability.