At On The Mark Productions, we are often approached by companies looking to maximize their earning potential by producing and running their own infomercial and short form DRTV campaigns. They are excited to try DRTV, but are often unsure of the risks.  They don’t know where to start or how to avoid making the mistakes that can derail a DRTV campaign.

Oftentimes, a company creates a great infomercial, but neglects the other equally important aspects of the campaign.  These can  include media placement, product manufacturing and fulfillment, duplication, payment processing and telemarketing. Every facet is important and just one weak link could jeopardize an otherwise solid campaign.   A great product with a good infomercial can be very lucrative, however it is important to be prepared.  Do the necessary research and make sure your product meets the criteria of DRTV.

Many of the initial questions companies ask are straightforward, and most of the answers can be found on our FAQ pages.   However, some questions are more complex and require an in-depth discussion with someone who specializes in a specific field of DRTV.  At On The Mark Productions we have a tremendous circle of trusted DR vendors, and have decided to put these questions to them to give you a leg up on your DRTV research.  Over the next few weeks we will post our experts thoughts and comments on some of those questions.  For our first installment we will explore setting up a merchant account for an infomercial or DRTV spot.

“How do we get paid and why shouldn’t we just run the CC charges through our local bank, I mean they can set up with a merchant account right?” 

Well the answer is not quite that simple. The other day, while having coffee with Mick Rispolli from APG, I asked about the potential benefits of setting up a DRTV Merchant account versus using your local bank.  Mick offered the following advice:

Why shouldn’t I just use my local banks merchant account? 

• The merchant account from your local bank will usually have a smaller cap on the amount of monies offered. A specialized DRTV CNP account will usually have a higher processing limit. The higher limit is attributed to the underwriters in the industry being familiar with start-ups having weak or no financials and the partners being used in the industry. (Call centers, fulfillment centers, media agencies) Years of sharing clients together and knowing each other’s functionalities brings confidence and trust, knowing all the PCI guidelines are being followed. Raising the limits in the DRTV industry usually involves submitting new financials and media buy projections along with reviewing the current processing history, returns and charge-backs.
•  Local banks don’t understand the spikes in DRTV transaction volume. Spikes will raise red flags about the account and sometimes freeze the account or funds. Spikes and lows are caused by good media buys or times while waiting for product to be manufactured or shipped to the US.
• A DRTV merchant account will have a charge-back monitoring department that specializes in fighting charge-backs, and will assist you in lowering your charge-backs to stay within the card association guidelines.
• Most local banks don’t have an internal gateway and will need a third party gateway to pass the transaction.
• Using a third party gateway will add extra transaction and monthly fees
• Using a third party gateway such as Auth. Net will add another layer of process for your transactions to be passed through, opening the door for potential failure or problems.
• A local bank won’t have a seamless connection to the call center or fulfillment house. A seamless connection is important while passing consumer information, especially with the new PCIDSS requirements.
• Utilizing a merchant provider whose account executives have close ties with your call center and fulfillment house can overcome an opportunity for failure quickly and efficiently to minimize the potential for a catastrophe.
• A DRTV merchant account has specific reporting for card not present transactions, also allowing the ability to customize reports for specific needs.
• The local bank will receive the funds in 24-72 hours and will still have the money for their float.