Tobacco Merchant Account

Complete Merchant Services for Online and Brick-and-Mortar Companies

Performance Card Service (PCS) has more than 20 years of experience providing tobacco credit card processing solutions to businesses in this high risk, highly regulated industry. Whether you are looking for a more cost-effective online tobacco merchant account or a more sophisticated and secure tobacco payment gateway, PCS has the industry knowledge and relationships with financial institutions to improve your processing capabilities and keep your business moving forward.

The Problems of Tobacco Merchant Processing

Just as smoke always rises to the top, the sales of tobacco and cigars continue to climb each year. Aided by the perpetual growth of online sales, tobacco continues to triumph as a profitable billion-dollar industry. Due to the increase in Internet transactions, many states now have specific laws and regulations for sales of online tobacco and cigars, in addition to existing federal laws.

One of the main reasons the state laws have been put in place is to assist with state tax collection on Internet sales. The state laws also help with the prevention of sales to minors. With all of the regulations and laws enforced on this legal product, most banks and processors deem the tobacco industry high risk.

Besides the numerous and strict state and federal laws, sales of online tobacco and cigars are notorious for excessive chargebacks, which is another factor that causes the industry to be viewed as high risk. Multiple chargebacks can be devasting for a business and can cause a merchant’s account to be closed and/or have the account placed on the TMF/MATCH list.

Chargebacks occur for multiple reasons. For example, customers may not recognize the company name on their credit card statements and contact their banks to dispute the charge as fraudulent. Also, if the customer is unhappy with the product or it is not received in a timely manner, the customer may once again dispute the charge instead of requesting a refund from the merchant.

These situations can usually be easily prevented. If merchants post clear and easy-to-use refund polices, detailed billing descriptions and shipping information on their websites multiple times, many customers will reach out to the merchant instead of issuing a chargeback.

In other instances, a minor may purchase tobacco illegally by using false information and/or an adult’s credit card without the adult’s knowledge or consent. This situation most often results in a fraudulent chargeback against the merchant’s account. However, it can cause even greater issues for the merchant. In extreme situations, legal action may be taken against the merchant.

To help prevent minors from illegally purchasing tobacco online, we highly recommend all tobacco and cigar merchants use an age verification tool that confirms the customer is of legal age to purchase the product. These systems greatly reduce the chances of fraudulent purchases by minors.

Contact Us Today!

With all of the obstacles involved in running a successful online tobacco business, PCS understands that obtaining tobacco merchant services should not be among them. We have been experts in the high risk merchant account industry for over 20 years and have relationships with numerous processors and banks that support the tobacco industry. Since we do not work with just one processor, we may be able to extend several offers for payment processing.

Contact us today so one of our experienced staff members can begin discussing all of the available payment processing solutions for your business.

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