Sunday, May 18, 2014
High-risk merchant accounts are an unfortunate exigency for many online businesses. Having a merchant services account is required to utilize any modern payment processing service, but this can get complicated depending on what you're selling. E-commerce can be a particularly sticky challenge to overcome in this regard, as online purchases are almost always higher-risk than in-person purchases with signatures. Disputed purchases are far more common, as are applications of stolen identities, as are unbidden charge backs, all posing a much greater risk to the processor and vendor. The following are three things that require appropriate care and will usually demand a high-risk merchant account to sell.
E-cigs are at the top of the list. Finding an electronic cigarette merchant account provider can be a grand challenge. E-cigs are considered to be of questionable legality by some, and their regulation is in question as well. Things have been changing with e-cigarettes since they started being sold, and they aren't about to stop soon. This makes them high-risk products. They have also had a history of chargebacks above and beyond the usual, in no small part because of people discovering that they aren't fond of some of the flavors they have found. Until the market stabilizes, they will remain high risk.
Adult products of all kinds are other high-risk items. Because of their sometimes-embarrassing nature, many people will try to claim they didn't order them if they are discovered by individuals they don't want knowing about them. This frequently leads to a chargeback to try to deny it more thoroughly and get their money back, even if discrete shipping is available. This is coupled with, again, some potential issues with shipping in some states. All in all, adult materials are among the highest-risk products simply because so many people take issue with them.
Finally, any kind of alcohol comes with similar issues, especially when sold online. The questionable nature of alcohol being purchased online coupled with the issues associated with identification lead to higher incidences of lost products, refunds, chargebacks and so on, making them a very volatile product to sell from a financial perspective. This can require a high-risk merchant account to sell at all.
These are just three products that tend to come with higher risk. There are many others, and different circumstances related to how a business is set up can contribute further to the risk. Finding a high-risk merchant account that suits your needs may be a necessity.