Jet Card Programs: Why Processors Hold Prepaid Flight Hours

On this page 7 sections

1. Jet Card Program Payment Processing: How Sales Look to Underwriters
2. Unflown Prepaid Flight Hours and Exposure: The Math Underwriters Run
3. Card vs. Wire for Jet Card Deposits: Pros and Cons
4. Program Terms That Reduce Your Jet Card Reserve Requirement
5. Your Jet Card Refund Policy: Expirations and Unused Balances
6. Disclosing Jet Card Volume Before It Triggers a Review
7. Next Steps for Jet Card Operators

Key takeaways

• Processors treat prepaid jet cards as future-delivery sales, so unflown hours count as exposure until they are flown.
• The longer a card stays open, the larger the unflown balance and the reserve an underwriter is likely to want.
• Shorter terms, charging closer to flight dates and clear written refund policies can reduce held funds.
• Disclose jet card volume and launches up front, and never split or reroute transactions to get around limits.

Jet card program payment processing gets more scrutiny than almost any other sale a charter business makes, because a client pays today for hours they may fly over the next year or two. This guide covers how underwriters view prepaid flight hours and why that exposure leads to reserves and held funds. It also shows how to structure funding, program terms and refund policies so your processor is less likely to freeze the cash you need to run flights.

If you sell ad hoc charter only, much of this will not apply. Once you sell block hours, deposit accounts or fixed-rate cards, it will.

Jet Card Program Payment Processing: How Sales Look to Underwriters

On an ad hoc charter, the payment and the flight happen close together. The client pays, the aircraft flies and the processor's exposure shrinks within days.

A jet card sale looks different from the processor's side:

• A very large single ticket, often far above your typical trip.
• Card-not-present entry, either online or keyed by your sales desk from a phone call or email.
• Delivery spread over months, sometimes with peak-day restrictions, blackout dates and call-out windows that affect when the client can actually fly.
• A concentrated customer base, where a handful of cardholders can account for a large share of your volume.

Underwriters group this with other "future delivery" businesses, such as event promoters and travel sellers. The concern is simple. If an operator or broker stops flying before clients use their hours, those clients can dispute the charges as services not provided. If the merchant cannot cover those chargebacks, the acquiring bank and processor absorb the loss. A reserve is how they protect against that outcome.

Not every program carries the same exposure. Structure matters:

For more on what underwriters ask for in this vertical, see our guide to private jet charter merchant accounts and how to get approved.

Unflown Prepaid Flight Hours and Exposure: The Math Underwriters Run

Underwriters care less about what you sold last month than about how much unflown value is outstanding at any given time. That balance grows faster than many operators expect.

Here is an illustrative example. These are not real figures from any operator. Assume a business sells $800,000 in jet cards by card every month. Clients fly their hours evenly over the life of the card, and nobody requests a refund. Once sales have been steady for a full card cycle, the outstanding unflown balance settles at roughly monthly sales multiplied by (months of card life + 1) ÷ 2:

The same monthly sales produce very different risk depending on how long cards stay open. That is why two operators with identical volume can get very different reserve terms.

Dispute timing makes the exposure last even longer. For prepaid services, card network rules generally allow dispute windows to be measured from when the service was expected, not when the card was charged. A client who bought hours many months ago may still be able to dispute unflown hours. Exact timeframes vary by network and dispute type, so confirm current rules with your processor.

Factors That Move the Number

• How quickly clients actually fly their hours, based on your history.
• Card validity term and any extension policy.
• Whether unused balances are refundable.
• Whether you operate the aircraft or broker flights on third-party operators.
• Your financial strength and how you handle client funds before they are earned.
• Customer concentration and the share of international cardholders.

Common Ways Processors Protect Themselves

• Rolling reserve: a percentage of each deposit is held for a set period, then released on a rolling basis.
• Up-front or capped reserve: a fixed amount is held, sometimes built up gradually from settlements.
• Delayed or delivery-based funding: funds are released closer to the flight date.
• Volume and ticket caps: limits on monthly volume or single transaction size.

Terms vary by processor and are set during underwriting, so confirm what applies to your account.

Card vs. Wire for Jet Card Deposits: Pros and Cons

Many jet card clients prefer to pay by card for convenience or rewards. Large blocks are often funded by wire. Each method has trade-offs:

A common approach is a hybrid: fund the main block by wire, and use cards for smaller top-ups, per-trip charges or incidentals such as catering and ground transportation. This is a legitimate funding choice, not a way around underwriting. Your processor should know your expected card-versus-wire mix. Large card payments also run into issuer limits, which we cover in card limits, declines and holds on large charter payments.

For keyed sales taken by phone, use a virtual terminal with address and security code checks, plus a signed card authorization form. For online jet card checkout, 3-D Secure authentication can help with fraud-related disputes. It does not protect you against service disputes such as unflown hours or aircraft substitutions.

If card fees on large blocks are a concern, a surcharging program where permitted may help offset costs. Card brand rules and state laws apply to surcharging and how it must be disclosed, so confirm what is allowed for your business.

Program Terms That Reduce Your Jet Card Reserve Requirement

You cannot negotiate away risk that exists, but you can design a program that carries less of it. These steps lower the exposure underwriters see:

1. Shorten card life or offer smaller blocks. A smaller block flown within months creates far less outstanding exposure than a large block with a long expiration (see the table above).
2. Charge closer to delivery. Consider per-flight card charges against a wire-funded deposit, or tiered top-ups instead of one large up-front card charge.
3. Put every term in a signed agreement. Cover hourly rates by aircraft category, peak days, daily minimums, repositioning, fuel adjustments, cancellation windows, substitution rules and expiration. Capture e-signatures and keep timestamps.
4. Keep fulfillment records. Trip confirmations, passenger manifests, flight logs and post-flight statements prove delivery and support you in disputes.
5. Show financial strength. Provide business financials, bank statements and an explanation of how client funds are handled before they are earned. Depending on how your operation is structured, aviation rules may also govern how you hold client funds. Confirm with aviation counsel.
6. Document operator relationships if you broker. Underwriters worry about supplier failure. Operator agreements and backup sourcing plans help.
7. Ask for a scheduled reserve review. After several months of clean processing, request that your reserve terms be reviewed. A review is not a guaranteed release, but it creates a clear checkpoint.

Your Jet Card Refund Policy: Expirations and Unused Balances

Most jet card disputes start with a mismatch between what the client expected and what the terms said. A clear jet card refund policy, delivered before payment, prevents many of them.

Decide and Publish These Terms

• Whether unused balances are refundable, and any fee for doing so.
• The expiration date and any extension or rollover option.
• Whether hours can be transferred to another person or company.
• How refunds are issued. Card network rules generally require refunds of card purchases to go back to the original card, not by check or wire. Confirm the current rules with your processor.

Some state consumer protection or unclaimed property laws may apply to unused prepaid balances. This is general information, not legal advice, so confirm with a qualified attorney before you set expiration or forfeiture terms.

Dispute Triggers Specific to Jet Cards

• Aircraft substitution, especially a downgrade in category.
• Surprise charges for peak days, repositioning or daily minimums.
• Fuel surcharge adjustments the client did not expect.
• Cancellation penalties inside the call-out window.
• Forfeited hours at expiration that the client says they were never warned about.

How to Prevent Them

• Send monthly statements showing hours flown, charges and remaining balance.
• Send expiration reminders well before hours lapse.
• List aircraft category and all charges on each trip confirmation.
• Respond to billing questions quickly, and issue refunds when they are clearly owed rather than fighting a dispute you will likely lose.

Disclosing Jet Card Volume Before It Triggers a Review

Surprises cause holds more often than risk does. A large card sale that does not match your application can lead to frozen funds while the processor investigates.

At application, describe:

• Each program type you sell and typical ticket ranges.
• How much of your volume is prepaid versus per-trip.
• How long clients typically take to fly down their hours.
• Your refund and expiration policy.
• Your expected card-versus-wire mix and any international clients. International cards may require international payment processing support.

After approval, tell your processor before you launch a new card tier, run a promotion or expect a large single transaction. Ask in advance for limit increases on ticket size and monthly volume.

Common review triggers include sudden volume spikes, single tickets far above your stated average, rising refunds or disputes, and processing that does not match what you disclosed.

Never split one jet card sale into multiple charges to stay under a limit, run sales under a different business or merchant category, or process through another merchant's account. These practices violate card network rules and can lead to account termination and placement on the MATCH list.

Next Steps for Jet Card Operators

Prepaid flight hours are a legitimate product, but they carry exposure that processors will manage one way or another. The more you shorten card life, charge closer to the flight, document delivery and disclose volume up front, the less likely you are to face surprise holds.

MannyPay provides high-risk merchant accounts and payment solutions for jet and charter businesses, including online and keyed acceptance. Approval and reserve terms depend on underwriting. To discuss your program, request a free quote, and a MannyPay specialist will respond within one business day.

ME

About the author

MannyPay Editorial Team

Beyond the Swipe's editorial desk researches the publication's guides and news and cites its sources in every article. Articles reviewed by a named MannyPay editor carry that editor's byline.

This article is for general educational purposes and is not legal, tax or financial advice. Card network rules and state laws change; confirm current requirements for your business.