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Cigar and Tobacco Merchant Account
General
If your business sells cigar and tobacco products, you may have found it difficult to open and maintain a tobacco merchant account. Many traditional payment processors and acquiring banks have restricted the boarding of tobacco merchant accounts, mainly due to its high-risk classification. Fortunately, HRMPay has the solutions for securing a merchant account for your cigar and tobacco business. A tobacco merchant account enables retailers to receive payments made with credit and debit cards for their products, and we have the payment solutions to board your cigar and tobacco account. Simply fill out our quick form and a member of our Team will reach out to you to complete your application.
Why Are Cigar and Tobacco Businesses Considered High-Risk?
The cigar and tobacco industry are considered a high-risk industry for four main reasons.
• Government Regulation
• Online Tobacco Sales
• Health Concerns
• Risk of Chargebacks
Government Regulation
Tobacco retailers must comply with various federal and state regulations on the sale, distribution, and marketing of cigar and tobacco products. Generally speaking, the following rules apply to all cigarettes, smokeless tobacco, cigarette tobacco, roll-your-own tobacco, and "covered tobacco products":
• Check photo ID of everyone under age 27 who attempts to purchase any tobacco product. Only sell tobacco products to customers 21 or older.
• Do NOT sell tobacco products in a vending machine unless in an adult-only facility.
• Do NOT give away free samples of tobacco products to consumers, including any of their components and parts.
Even with the myriad of regulations, the US tobacco industry remains one of the most lucrative businesses in the world for those who can navigate the industries regulations.
Due to the unpredictability of regulations and compliance placed on tobacco, payment processors classify the industry as high-risk.
Online Tobacco Sales
Operating an online tobacco business can be difficult due to the merchant’s responsibility to verify many aspects on an online transaction. Given the high probability of transaction fraud for online stores, the requirement to verify the customers age, the responsibility of proper disclosure, and general security issues of online transactions, eCommerce tobacco merchants are subject to higher credit card processing fees from card brands and payment processors. It is important to work with a high-risk processor that offers exceptional payment gateway options and a plan for redundancy.
Creating a secure internet account is imperative for an online cigar and tobacco merchant. Customers expect their online transactions and data to be secure, utilizing the latest software technology to make your website safe from hackers and criminals. HRMPay has the solutions to provide your business with a secure cigar and tobacco merchant account!
Health Concerns
During the past forty years, health professionals and government organizations have waged a war on the tobacco industry. It is completely legal to sell cigar and other tobacco products online, however, both regulation and pressure from the health care community have made selling tobacco more difficult than other products. There’s been work over the last few decades on behalf of health professionals and governing administrations that are bolstering efforts to prevent the use of tobacco products. All of these factors make cigar and tobacco merchants a reputational risk for payment processors. Fortunately, HRMPay is a leader in connecting businesses with high-risk merchant accounts. We are committed to offering your cigar and tobacco business premier credit card processing solutions.
Risk of Chargebacks
Acquiring banks and payment processors underwrite merchant accounts based on risk. The unpredictable nature of cigar and tobacco products and cigar and tobacco legislation result in banks viewing your business as high-risk.
Operating in the eCommerce space, in general, means that you run the risk of chargebacks. eCommerce is already considered high-risk because customers can easily dispute transactions with their issuing bank when unhappy with a purchase or forgot that they made an online purchase. This, added with the misconceptions surrounding cigar and tobacco products, means that your business is considered high-risk for banks. HRMPay, however, has solutions for you to obtain a cigar and tobacco merchant account.
Chargeback Protection
Our multi-bank processing capabilities help high-risk merchants prevent high chargeback ratios, but we also work hard to help our cigar and tobacco merchants protect their bottom line by preventing unnecessary chargebacks. HRMPay provides merchants with technology designed to identify vulnerabilities within their system to limit instances of unjustified chargebacks.
Some of the ways cigar and tobacco merchants can prevent fraudulent chargebacks on their own include:
• For brick-and-mortar retail locations, train employees to ask for photo identification with all credit card transactions and have them double check that the name is the same on both cards.
• For brick-and-mortar retail locations, utilize time-stamped video surveillance for the cash register area. Be sure that the video captures the customers’ faces. This can be used to cross-reference with the time stamp on the credit card transaction and provided as additional evidence in disputing chargebacks
• Retain all credit and debit card receipts. File them with care and keep them easily accessible in case a chargeback is initiated, and proof of the transaction is required.
• Never process any transaction that is suspected of being fraudulent without confirming the information with both the customer and card-issuer.
Keeping Cigar and Tobacco Merchant Accounts in Good Standing
As a new industry, it is important that cigar and tobacco merchants maintain their accounts with banks and credit card processors. Building good histories will increase the likelihood that banks eventually see cigar and tobacco products merchants as a legitimate and viable business that they are willing to work with. Some things merchants can do to keep their accounts in good standing include:
• Maintain a good history with credit card processors
• Consistently perform a high sales volume
• Keep a high balance in business accounts
• Dispute chargebacks whenever possible and back up disputes with strong evidence
• Remain transparent in all communications with your banks and payment processor
Adhering to these standards is something any business should strive for, however, for a high-risk industry, it is more important than ever. In addition to creating a better name for the industry, merchants who keep their accounts in good standing increase the chances of raising their sales potential and processing limits.
Cigar and Tobacco Products HRMPay Supports
HRMPay supports businesses selling cigar and tobacco products and operating in locations where cigar and tobacco products are legal. Supported products include:
• Cigars
• Loose Leaf Tobacco
• Cigarettes
• Pipe Tobacco
• Chewing Tobacco
• All Nicotine Products
• Tobacco Accessories (Lighters, Humidors, Pipes, Cutters, Ashtrays, etc.)
• Cigarette Tubes
• Hookahs
Cigar and Tobacco Credit Card Processing Rates & Fees
Choose a cigar and tobacco merchant processor who understands your business needs, industry-specific aspects, and budget. As a high-risk merchant, you’ll likely be faced with higher fees than low-risk merchants. While fees shouldn’t be the only reason you decide to work with a merchant services provider, they should be considered since it will determine how much money your business pays to process credit cards. The rate will be determined once your merchant account is approved.
The exact credit card processing rate you can expect for your cigar and tobacco business depends on several factors, including your business’s level of risk and whether you sell your products online or in person. HRMPay will review your application and assess these factors. Rates for cigar and tobacco payment processing typically range from 2.85% to 5.5%. There could be other credit card processing fees like monthly fees, interchange fees, and related merchant account fees. That said, we offer competitive rates and transparent pricing with no hidden fees or long-term contracts.
What Documentation Is Required to Obtain a Cigar and Tobacco Merchant Account?
1. Color Copy of Driver’s License or Government Issued Photo ID2. Document showing Proof of Company Registration (Sole Proprietorship, LLC, ETC)3. Voided Check/Bank Letter4. 3 Months Bank Statements 5. 3 Months Processing Statements (if available)6. EIN Letter7. Articles of Incorporation8. Tobacco License 9. Fulfillment Agreement (if applicable)10. List of suppliers for cigar and tobacco products11. Website 1. URL/Website must have Age Verification and FDA warnings2. Website must have legal company name and address listed on footer of landing page; terms & conditions page; privacy page; refund/return policy; shipping policy; contact page with customer service number and card brand logos on the checkout page
Cigar and Tobacco Merchant Account Types that HRMPay Supports.
HRMPay offers the following solutions for cigar and tobacco merchant accounts:
• Cigar and Tobacco Retail: Solutions that are best suited for traditional brick and mortar retail settings with reliable internet. A retail cigar and tobacco merchant account allows you to accept credit/debit transactions in-person or card-present.
• Cigar and Tobacco eCommerce: Solutions for cigar and tobacco products and accessories. For eCommerce cigar and tobacco merchants, our state-of-the-art payment gateways provide you with everything you need to accept online payments securely.
• Cigar and Tobacco Payment Gateways: HRMPay offers a multitude of gateway options for our merchants. Whether you are a high-volume eCommerce merchant or a newer merchant, we have the best solutions for those merchants who make most sales via eCommerce.
• Cigar and Tobacco MOTO (Mail Order/Telephone): With a virtual terminal, you can accept payment details from your customers via phone and email. Our virtual terminals’ have an easy-to-use interface which makes it easier than ever to accept card-not-present payments.
• Cigar and Tobacco Mobile: Mobile cigar and tobacco merchant accounts allow businesses to accept in-person payments via your cellphone. These solutions are perfect for selling at special events/conventions. Cigar and Tobacco mobile merchant accounts are typically priced similarly to retail accounts as the chargebacks/fraud are usually relatively low.
Why Open a Cigar and Tobacco Merchant Account with HRMPay?
1. To Accept Credit Cards: If you operate either in a brick-and-mortar retail location or an online website, you’ll need to be able to accept major credit cards to maintain a successful business. 2. Payment Gateway and Platform Integration: Our payment gateway integration into many of the popular website platforms, including Shopify, WooCommerce, Magento, and WordPress. This means that you won’t have to switch your platforms after spending long hours and tons of money developing the perfect website. 3. Customer Service: Our Customer Service Team understands the cigar and tobacco industry and how to keep you processing efficiently and effectively. HRMPay provides you with the option to accept credit card payments for your cigar and tobacco business either in your retail location or on your website, giving you the best opportunity for success. When you partner with HRMPay, you also partner with a large network of payment solutions providers. We offer outstanding fraud and chargeback protection, as well as exceptional customer support. We have strong relationships with many of the largest acquiring banks who work with high-risk merchants both in the United States and offshore.We utilize a variety of processing techniques to ensure that cigar and tobacco merchant processing is a smooth and simple process for our high-risk accounts. Some of the features of your cigar and tobacco merchant account include:• Multiple payment processing relationships to assure placement of your merchant account• 24–48-hour settlement to merchants• Secure payment gateways• Chargeback alerts• Chargeback disputes• Fraud prevention and protection tools• Competitive processing rates • Quick approval of your merchant accountIn addition to providing outstanding customer service, HRMPay supports integrations directly into the software, systems, and tools you already utilize within your operations. We maintain a variety of partnerships with industry-leading payment gateways and payment platforms to include:• Authorize.net• NMI• USAePay • WooCommerce• Magento• WordPress• Shopify• BigCommerceWe can integrate with the most popular platforms to help you successfully sell your cigar and tobacco products.Once HRMPay has your merchant account boarded, you will be ready to transact your cigar and tobacco transactions promptly, effortlessly, and conveniently!Sign up today! quick form
