Tobacco Credit Card Processing

Published On: March 12th, 2021

When you own a business that sells tobacco products, it can feel like the system is stacked against you. Of course, you can’t really sell tobacco products such as cigarettes online, as there is no way to properly verify the person who is buying them, is of age. That’s why most merchants will not be able to get a payment processor that offers them card processing services for this specific kind of purchase. That’s why you need to have a tobacco payment processing service that can handle the types of purchases that your business considers to be bread and butter. The three things to consider are, the advantage of having a tobacco credit card processor, how it works, and how to approach a card processing provider.

The advantages

For all your smoke shop payment processing needs, a credit card processor for tobacco is the only way you can make your business work. Without it, you cannot become an eCommerce giant or hope to sell as nearly as you need to in order to meet your margins.

Having a specialized merchant will give you the ability to make your business smoother and operate just like any other normal enterprise. 

The benefits include.

  • Fast, easier and hassle-free payments for your online eCommerce store.
  • Faster payments for your in-store customers too.
  • Your sales will increase 
  • You can take on customers that may want to buy in bulk
  • You can protect your business from fraud and allow for more monitoring 
  • A full report of the sales will also be at your disposal.

If you were using a normal merchant’s account, you would be limited to the number of tobacco sales you can process. However, with a tobacco credit card processing service, you can take on any number of sales you would like. If this is not available, most merchants will allow a considerably higher volume limit than most other types of providers. Merchant accounts will allow more funding to be released from your own business account, so you can purchase more stock. Not to mention, tobacco credit card processing services will make any settlements needed, such as refunds, to be done quicker. 

Perhaps the biggest advantage is, your ecommerce website flourishes. Payment gateways are vital to online business and with a great processor you are able to take orders no matter who they are from and the gateway will be fully compliant with specific tobacco laws. 

How it works

Enterprises received their credit card payment terminals by their payment processor. The processor allows for the payment to go ahead, meaning it will behave like the gateway between you, your bank and the customer’s bank. The processor will also allow larger and larger online baskets to become available for transactions as the compliance laws will be met and thus, the bank is able to legally confirm the purchase. 

You can also swipe the card, which allows the merchant to take any transactions from the customer’s cards. The bank of the customer will also determine where the sale is, what it’s for and authorize it. 

The bank will also be able to provide you with fraud checks, so you don’t lose out on valuable product and stock. The bank can also recognize the cards and thus, know that special attention may need to be paid to the history of said transactions, as more valuable products and possibly, legally obscure products are being sold. You get great scrutiny right off the bat, which protects you as the business owner. 

The bank can also issue refunds quicker, using specially curated systems that sift out certain types of products. As you may know, alcohol and tobacco products are of a different sort, and thus, they require more attentive responses, legally speaking.

Approaching a processor

When you are trying to approach a smoke shop payment processing service, you need to keep a few things in mind. 

  • Firstly, you need to be aware of the rules and regulations of your industry. 
  • Can you prove you know all the rules? They may ask for a certification.
  • Some laws may change and they want to know if you are able to adapt and comply with them, so they don’t have to chase you.
  • Merchants will also want you to be completely transparent, so always update them on any new products you are selling and potentially, any sketchy gray area that you are exploring, like hemp, CBD, vaping, etc.
  • You should also provide a risk analysis report of your company to the processor. This will allow them to see if you have distanced yourself from any kind of credit risks that could potentially drown your business.
  • Make sure you are not trying to garner their services while you have debts. They won’t want to do business with a company that doesn’t have a positive credit history and thus, eliminating any loose ends in this regard will help.

So what kinds of products can you sell?

Well, for the most part there is no limit to the kinds of products you may offer customers, as long as they are certified. 

However, we also recommend that you ask the processor if they have any objections. Sometimes you will find that new products that may have had a negative test result in a study, may be tricky. For example, vaping. Some vape oils have led to health concerns and customers vomiting because they were found to be unsafe. A processor might want to pull those products from your line or not process them. This can be tricky, but that is why you need to keep a firm relationship with the processor and be a responsible merchant. The usual products that are known such as cigarettes, cigars, loose tobacco, vape kits, smoking pipes, etc, are all going to be standard. But double-check of any of the latest products that have only been legalized in the past 5 years or so.

If you would like to know more about tobacco credit card payment processors that provide an excellent service to merchants of this type of business, get in touch with us today. We’d be happy to answer any of your questions.