The sale of pure CBD oil has skyrocketed in recent years. While the legal battle continues over the recreational and medical legalization of cannabis, CBD oil has stolen the spotlight.
It’s medical applications including preventing and stopping seizures, treating anxiety, and reducing chronic inflammation. Businesses that provide pure CBD oil products are growing as laws surrounding the sale, use and regulation of cannabis continue to change.
More and more consumers are seeking out pure CBD oil online as its medical use increases across the globe and as people look for alternative treatment methods for a long list of health issues.
While business is booming, merchants need to take care in selling pure CBD oil online. The nature of the product makes it a “high risk” proposition for acquiring banks and other business financial institutions. We’ve outlined some tips to help you set your pure CBD oil business up to succeed.
Tip #1: Secure Historical Business Information
When applying for a merchant account, banks and other financial institutions will ask to see historical records for your business. This may include sales volume, chargeback ratio, refund history, complaints against your business, credit history, and other critical information. The longer you have been in business and the cleaner your record, the better your chances of securing a merchant account and remaining in good standing with banks. Be sure you have an existing business account set up and in good standing.
Tip #2: Check Your Volume
In addition to the high risk nature of pure CBD oil, high volume businesses also pose a risk to banks. Look at your monthly volume and see if you may be considered high risk in this area, too. Businesses with high volume often have to pay higher fees for accounts, if they are even able to find a willing bank. On the other side of the coin, not doing enough business could also be harmful to your case. Do your research and see where you stand in terms of sales volume and explore specialized high risk options if you need to.
Tip #3: Minimize Chargeback Risk
Chargebacks are a thorn in the side of merchants and banks alike. They negatively impact the entire payments ecosystem, so pure CBD oil merchants should ensure they have proper tools in place to mitigate this risk. Both true and friendly fraud feed chargebacks, so merchants should be sure they have fraud tools in place and follow customer service best practices to reduce chargeback fraud. Be sure your chargeback ratio does not exceed three percent and if it does, have a strategy documented for getting back on track.
Tip #4: Focus on Presentation
Presenting your business as a legitimate one can go a long way. Be sure your website is updated, has a clear privacy policy and refund/return policy, and that your “About Us” section is updated. Companies that look well-established are more likely to be seen in that light by banks (and consumers). Make sure your website advertises clear contact information, including a contact phone number, email address, and business address. Also make sure that the products listed on your website include relevant details, photos, and prices. If you enable users to submit reviews, those should be on your website as well. Not only does social proof boost your credibility, but it boosts your findability with search engines.
Tip #5: Work With a Specialized Pure CBD Oil Merchant Account Provider
Choosing the right payment processor can make or break a business. Chances are more likely than not that you will be labeled a high risk merchant, so choose a specialized high risk payment processor off the bat to save time and money. When looking, consider how competitive a processor’s rates are, what merchant support is like, and how transparent the processor is. Those selling pure CBD oil online need to be sure the processor they choose offers multi-currency and alternative payment options as well as excellent chargeback management support.
MerchACT Can Help Pure CBD Oil Merchants
MerchACT understands the pure CBD oil industry and can evaluate your situation and determine the best course of action for your specific payment functionality. We take the time to understand your business model so that we can effectively provide you with a merchant payment solution that is scalable for long-term growth. Furthermore, we offer ongoing support and industry knowledge that will enable your business to easily accept echecks, credit cards and alternative payments with no volume caps or surprises. Reach out today to get your online CBD business set up for success.