Keep out of trouble: 3 tips for new high-risk websites

E-commerce has become the predominant way to shop for many consumer products and retail goods. For many website owners, high-risk e-commerce is a vast, and often lucrative, industry to be in, but it’s not without its hurdles.

Cigar sites and FFL dealers looking to accept credit cards online, in particular, have to go through a lot of red tape to make sure they have covered their liabilities.

Many high-risk websites are also limited as it relates to potential advertising channels. And, of course, finding a payment gateway and merchant account recommendation requires a lot more due diligence for say, a pipe and glassware site, than it would a “low-risk” business.

Although e-commerce isn’t going to change anytime soon, certain practices and standards we take advantage of may be in line for some changes shortly. We want to share some of the developments we have our eyes on.

High-risk e-commerce and transparency

One of the best ways to stay “on top” of the high-risk e-commerce industry is to remain fully transparent. Don’t hide anything, fudge any numbers or claims and keep good track of what data you’re allowed to collect on your customers – so you can present that information clearly if you need it in the future.

Should regulators or credit card processors ever have questions, you will want proof of your business tactics and historical transactions.

It’s not all for protection; there are benefits to running a tight ship. As you are in business for a more extended period, you might find you want to renegotiate your merchant account transaction rates or some other fees or financial services. Having an awareness of your low number of charge-backs and returns can be instrumental in making this happen.

If you don’t know, charge-backs and returns are one of the biggest reasons a product market is placed in the “high-risk” category. Banks don’t like the risk associated with website owners having to give a lot of money back to customers, and frankly, neither do merchants.

Certain markets lend themselves more vulnerable to charge-backs and returns, such as homeopathic products, and exotic e-juices. Having your records on hand to show bankers your business has minimal charge-backs can help you secure a better rate than someone who doesn’t know.

Clear and concise communications

Selling online? You should have an attorney review your site, offers, and products. One issue we see more frequently as e-commerce matures is an increase in lawsuits and legal cases involving unclear or lazy writing in merchant terms and conditions – or privacy policies. If you have not written your terms and conditions correctly, it could cause you enormous complications years down the road.

With how seemingly convoluted government and legal proceedings can be, you should protect yourself against potential liabilities before they can present themselves. You must also worry about poor understanding and misinterpretation from folks that don’t often deal with technology or marketing.

We found a great article from the E-commerce Times that details some of the legal issues happening today in the e-commerce community. It’s a good idea to get a full legal consultation on your terms and conditions. Period.

EU Copyright law and your e-commerce business

We all remember last year when the EU ruled in favor of protecting web-surfers via the GDPR and sent waves through the Internet and forced every European website (and every site that wanted to maintain easy access for its European users, regardless of their location) to update and change their terms and conditions and user agreements and data collection policies. We wrote about it at the time.

Well the EU is taking it a step further, by stepping up to protect creative copyrights and making it more difficult to share content that includes copyrighted material.

While this might, at first, sound like a great victory for artists and not something that will affect high-risk merchants much, think again. For those of you who rely on user-created content to help boost your marketing efforts, life just got a lot more complicated when dealing with EU based customers.

You can easily find user-generated reviews and content, and you might notice a lot of it has some music or art or something that the user included to make their video more appealing and watchable. You may now be much more limited in your ability to share that content in EU based markets.

Additionally, because of the benefits of standardization in programs and coding, this change is likely to affect more than just the EU. This issue is a more significant concern for news organizations and content creators than e-commerce marketers but it does have significant implications on how you create marketable content to help sell your products.

While copyright issues have always been present in the digital community, this new law could be the beginning of a wave of responsibility when sharing copyrighted content. Another reason to be sure your branding is original. Read more about this issue in this E-commerce Times article.

If you have any questions on this article or need help with a high-risk payment gateway or merchant account recommendation, please contact us anytime.