Running a head shop, both in the brick and mortar sense and online, can be a lucrative form of business. There’s always a relatively high level of demand for products like tobacco, pipes, and bongs, and head shops can build up loyal followings of customers over time. Online, you can set up your own head shop website to sell products to even more customers from far and wide.
However, setting up and running a head shop isn’t always easy. There’s a lot of red tape to negotiate in terms of licenses and legality for buying and selling certain products in certain locations, and the rules and laws regarding head shops are always subject to sudden changes. You also have to make sure you get a head shop merchant account, which can be challenging too. Here’s all you need to know on the subject.
Head shops and smoke shops have been popular for a long time, but in recent years, they’ve started to see a real surge in popularity. This is because smoke and vape culture has evolved a lot in recent times, and many laws have been relaxed and eased in regard to buying and selling smoke/vape products like hookahs, bongs, e-cigs, and vape mods.
Many head shops have also expanded into other products, such as medical marijuana, CBD oils, hemp products, kratom, kava, and so on, broadening their appeal even further and giving them an even larger potential audience. So, nowadays, smoke shops can have lots of different customers from all walks of life.
However, there are still challenges associated with running a head shop, and one of the biggest difficulties you can face is getting your head shop merchant account. Smoke shop merchant accounts are vital for selling your products online and processing digital payments safely and securely. And without a head shop merchant account, you can struggle to do any business at all.
Before we take a closer look at the risks and problems associated with head shop merchant accounts, let’s first look at a merchant account definition to see what these accounts are and why they matter so much. In simple terms, a merchant account is a type of business account that is designed to allow merchants to receive digital payments safely and securely from their customers.
When a customer visits your head shop online store or makes a digital payment with their credit or debit card for your goods or services, the money doesn’t go right into your account. It has to go into a merchant account first of all. This is a key step of the process, facilitating high risk credit card processing. Then, after a short while, the money will be processed through to your main account.
A head shop merchant account or smoke shop merchant account is just a type of merchant account aimed at head shops. If you want to run a head shop and take payments online, rather than doing everything physically at a brick and mortar store, you’ll need a head shop merchant account. However, due to the high risk nature of the head shop business, these accounts are not readily available.
It’s clear to see that you need to have a head shop merchant account if you want to run a successful smoke shop in today’s world. However, if you simply head to your usual bank and apply for a smoke shop merchant account, you may be turned down. This is because head shops are seen as a high risk industry, with too many risks for most banks to want to work with them.
Payment processors, too, can be turned off by the possibility of working with head shops. In some cases, payment processors can freeze accounts or hold payments of head shop owners, causing a lot of distress and chaos for the businesses and people involved. But why is it so hard to get a head shop merchant account in the first place?
Well, it’s all down to risk. Banks assess different businesses and industries and class certain ones as “high risk”. Head shops are seen as risky for several reasons. Firstly, there’s an age restriction on the products they sell, like vape devices, bongs, hookahs, and tobacco. This can cause problems. In addition, there are rules and restrictions around the sale of these kinds of products in different locations.
All of this means that head shops doing business online can have a higher than average rate of chargebacks and high risk credit card processing issues. All of this causes problems for banks and payment processors, so they prefer to simply not associate themselves with head shops in the first place. Some even refuse to work with head shops due to the controversial nature of some of the products they sell, like CBD oil, tobacco, cigars, or THC.
If banks and payment processors won’t help you get a head shop merchant account, what can you do if you want to run an online smoke shop business and provide products to your customers who want to pay digitally? Well, there are other options out there, and it is still possible to get your own head shop merchant account with the help of Shark Processing.
Shark Processing is a leading name in the high risk payment processing industry. We work with high risk businesses like smoke and head shops to help them get merchant accounts and carry out business online. We do this through the advantages of our expert, experienced team, as well as our extensive network of partner banks and payment providers around the globe.
With our help, you can get a head shop merchant account more easily than you might have ever imagined. We can also provide competitive rates, speedy approval times, and quality customer support for all account holders, so you won’t be left in the dark. Contact Shark Processing today to find out more about our head shop merchant accounts.