Knives & high-risk payment gateways: an industry spotlight
Why are knives considered high-risk?
At first, it might seem a bit “over-protective” to put knives in a high-risk category when it comes to payment gateways. Though many knives are designed as, and all can be used as, a weapon, knives serve a purpose in most peoples daily lives for non-combat reasons. Eating, cooking, yard work, crafting, and opening plastic containers are all common uses for knives. Add to that – ceremonial or decorative knives and swords, athletic competition pieces for fencing, and survival and tactical gear and you can clearly see how diverse the online knife business is.
The reason knives are categorized as “high-risk” is not only due to their status as potential weapons; it’s because of their inherent risk for chargebacks, especially the “friendly fraud” variety.
Friendly fraud and online knife sales
Chargebacks are what the financial industry calls forced returning of funds for various reasons. “Friendly Fraud” is a chargeback knowingly and falsely initiated by a customer. Due to the sneaky nature of this crime, the customer always calls the bank directly for a refund instead of asking the site owner. The bank then returns the money to the customer, sometimes without even reaching out to the website owner promptly for possible explanation or confirmation of activity. This is termed “friendly” because the thief is disguised as a customer!
Sometimes there are innocent intentions and mistakes made on behalf of the buyers. Sometimes it’s not so innocent, but due to the increased activity of these “friendly fraud” incidents, many products have been placed in the “high-risk” category. You can find more information about friendly fraud at the chargebacks911 website.
Don’t fear the high-risk payment gateway label
While the term “high-risk” might seem intimidating, don’t let is scare you away from what are often very profitable markets. In the simplest terms, it only means you need a properly set up payment gateway and merchant account. Most “low-risk” merchants can get these easily with services like Shopify Payments, Stripe, or Paypal, but those services are not designed for high-risk merchants, and if a merchant sells high-risk products on them they are most likely going to have their account frozen or closed once discovered.
Instead of trying to recover from a dead stop in business high-risk merchants should reach out to us first and find a high-risk payment gateway and merchant account that suits what they are selling. We can help you solve both issues by connecting you to one of our preferred merchant account providers, and then helping you select and set up the right payment gateway depending on your preference and business.
We have three preferred payment gateways we often help people with, Authorize.Net, NMI, and ePN. Each high-risk solution has its advantages. Once we figure out which suits you best, we can get you up and running quickly and also help you understand how it all works.
We can do this at no cost to you because we receive an incentive from the service providers we connect you to. We can often help you find lower deals than you would find on your own. Also, if you keep good records and can keep your chargebacks low, after a short time, you can negotiate better deals for future services.
Once you’re in, diversify
Once you have experience in one high-risk market, you see how easy it could be to get involved in some of the other products under the high-risk label. NMI, one of our preferred payment gateways, makes it incredibly easy to manage multiple stores financial backend from one payment gateway interface. Giving you more analytical power and easier access to your accounts.
Additionally, we can point you to several software platforms that allow you to manage multiple stores at once, meaning you don’t have to pigeonhole yourself into one product market. With the right knowledge, you’ll see it’s often very beneficial to have several various profit channels to source your revenue. Even just inside the knife industry, you have several categories, some mentioned above, like kitchen/cooking & eating, décor and collectibles, outdoor gear like machetes, and tactical and self-defense gear. While one might decide to have one big “knife shop,” another merchant might want to categorize those shops more specifically; selling kitchen knives on a kitchen appliance and utensil website for chefs, tactical knives on a tactical gear site with firearms and self-defense gear; Ceremonial and decorative swords on a vintage accessories shop; the list goes on.
We can help you set up the web-store you want with a platform you enjoy working on with a high-risk merchant account recommendation and high-risk payment gateway that works for you.