Selling online brings its own set of challenges, and some industries face challenges all their own. High-risk merchants sell certain types of products that payment processors are reluctant to deal with due to a variety of reasons. However, Shift4Shop's built-in payment processor is ready to do business with high-risk merchants.
A high-risk merchant is one who sells a type of product associated with either strong regulations or a higher-than-usual possibility for fraudulent purchases and chargebacks. Products that require age checks or have different legal status across state lines are often considered high-risk. Governmental regulations on some industries also lead to a high-risk designation, because of the frequency of eCommerce merchants (and the products themselves) that don't meet the required regulations. Since sellers of these types of products are more likely to encounter legal problems, payment processors often avoid working with merchants in high-risk industries in order to protect themselves from additional liability.
Merchants selling products in the industries below are designated as high-risk and will need a payment provider that accepts restricted products.
Tobacco has long been regulated by the federal government, and while vaping is relatively new and regulations are still changing, its relationship with tobacco products is well-established. Tobacco and vape vendors are required to use age verification whether online or in brick-and-mortar stores. Tax laws for these products can also vary significantly across state lines. Vape merchants need to be aware of the developing regulations that could change the way they do business. If you're planning to open an online vape store, make sure you're up to speed on current laws first.
Adult novelties and sex toy merchants also require age checks. The nature of the adult toy business means customers want a high level of privacy and this sometimes crosses over into fraudulent behavior. Some customers will go as far as to instigate fraudulent chargebacks or even use stolen credit cards in an effort to protect themselves from embarrassment, such as the name of an adult toy website appearing on their credit card statement. Between the age verification requirements and the higher risk of fraud, adult novelty stores are considered high-risk, so be prepared if you open an online adult toy shop.
Firearms are subject to regulation that varies significantly in different states and laws covering ammunition and gun accessories (scopes, rifle stocks and chassis, replacement barrels, modification kits, etc.) are also highly varied. Online sellers dealing in these products need age verification and also restricted shipping that excludes certain states. Differing laws can also mean increased liability for sellers, which carries over as increased liability for payment processors. It's still possible to run a successful online ammunition and gun accessory store if applicable laws are carefully followed.
Nutraceuticals include nutritional supplements, alternative remedies, vitamins, workout and energy supplements, and other similar products. Regulation in this industry is spotty — many products go to market without FDA approval — and it has a reputation of making unfounded health claims, so payment processors hesitate to get involved. Of course, there are many flourishing online nutraceutical vendors who sell high-quality products without issues, so you can definitely sell nutritional supplements successfully online.
People take cannabidiol (CBD) products to treat a number of health issues. However, the compound is infamous for being found in all types of cannabis. Even though the compound contains no THC and FDA-approved CBD products can be legally sold, companies and suppliers have still gotten into legal trouble in the past. As with other cannabis product sales, as well as e-cigarettes (mentioned above), vendors need to be aware of different laws that apply in different areas and any future changes to these laws when starting a CBD online business.
Other high-risk industries include:
With Shift4Shop, there's no need to search for a high-risk payment processor. Whether you sell vapes, supplements, or anything in between, Shift4 is the perfect payment solution for businesses in high-risk industries. Shift4 is already integrated into Shift4Shop, so you can get up and running right away. Your customers can rest assured that their payments are secured with Shift4's advanced tokenization, PCI compliance, fraud detection, and more.
With eCommerce becoming a multibillion-dollar industry, there's no shortage of shopping cart software these days — but Shift4Shop stands out from the competition. Shift4Shop has been developed with over 20 years of experience and industry knowledge that has successfully identified and included all the most-needed features of a powerful website shopping cart. Today, Shift4Shop is the most feature-rich, scalable, and overall most powerful eCommerce solution for any size business.