Precious Metals Merchant Accounts
Voted the #1 High Risk Merchant Account Provider for two year’s running, Soar Payments is focused on providing simple and affordable precious metals merchant accounts for the gold coins, gold, silver and other precious metal vendor industry.
Precious metals merchants, which includes retail, eCommerce and mobile sales precious metal sellers and buyers, are typically considered mid-risk or high risk merchants by credit card processors. This is due in large part to the large transaction sizes and the potential for fraud by both seller and purchaser (e.g. selling or a customer wrongly claiming that the gold coin was fraudulent) that are inherent to precious metals businesses.
Soar Payments offers high risk merchant accounts for precious metals businesses at affordable prices, with integrated terminals (credit card machines) for retail businesses, and payment gateways for eCommerce or phone sales businesses.
Table of Contents
A Note From Our CEO
Adam Carlson Soar Payments, CEO
It’s a great time to be in the precious metals industry.
With the U.S. economy in full recovery, and consumers looking to diversify their wealth holdings, the demand for gold, other precious metals and investable jewels, is expected to see steady increases over the next decade.
Certainly there are still challenges to building and running a precious metals business, particularly when it comes to accepting credit card payments. Things like:
- Getting approved for a merchant account
- Making sure you’re approved for large tickets
- Minimizing chargebacks and fraud
The good news is, these problems are all solve-able. It took us about 10 hours of research, but we’ve put together this “precious metals credit card processing cheat sheet” for jewelers and other entrepreneurs in the precious metals, gold, gold coins, silver, and collectible jewelry industries to help you navigate these pitfalls.
It’s our sincere hope that you find this article useful (because we’ve put a lot of work into it)… and if you need help with merchant services for your precious metals company, we’d love to help you with that, too.
P.S. If you own a precious metals business, and want affordable and reliable credit card processing we can help you (in fact, precious metals is one of our specialty industries). Click here to apply online.
Getting a Merchant Account
How do I get an precious metals merchant account?
Obtaining a merchant account for selling precious metals is relatively straightforward, assuming you’re applying with a high risk merchant services provider. Precious metals vendors, as an industry, are considered high risk by credit card processors due to the large transaction sizes, the potential of accusations of fraud or fraudulent materials, due to the nature of the product, and a historically higher than average chargeback ratio. Consequently, neither low risk credit card processors like your local bank, nor large payment aggregators like PayPal or Square can or will provide credit card processing to precious metals businesses. Therefore, a precious metals business needs to seek out and apply with a high risk merchant account provider.If you’re ready, you can apply with us.
What’s the Difference Between a High Risk and Low Risk Merchant Account?
From both the business and the customer’s perspective, not much. With both types of accounts, the customer pays with their credit or debit card, the credit card processor processes the payment, and minus the transaction charges, the money gets deposited into the business’ bank account. The primary differences, are on the application, underwriting and risk side for the credit card processor.
To start, most low risk credit card processors simply cannot accept payments from precious metals businesses because their bank sponsorship rules don’t allow it. Another major difference, is that for low risk merchant accounts, there is very little front end underwriting done on the business. By contrast, when applying for a high risk merchant account, the credit card processor typically conducts a more extensive review of the business. And once approved, the credit card processor’s risk department typically maintains a more active and ongoing role in monitoring the precious metals business. For that extra oversight and involvement, the high risk credit card processor typically charges a slightly higher fee than a low risk provider. From the perspective of the customer and the day to day experience of the business, however, the experience is basically identical between low and high risk merchant accounts.
So how do I find a high risk precious metals merchant account provider?
One easy answer is to search online for a high risk merchant services provider that accepts precious metals businesses. Once you’ve compiled a few different providers, you can apply online, and after receiving a quote, you can select a provider.
Does Soar Payments offer precious metals merchant accounts for retail, MoTo, or eCommerce businesses?
Yes. Soar Payments offers precious metals merchant accounts for a wide range of businesses in this industry that accept retail, mail (e.g. via catalog orders), phone, and / or eCommerce credit card payments.
To get an account, simply apply online. Your application will be reviewed, and, if pre-qualified, you’ll be provided a full contract with pricing and terms for review. Once you’ve signed the application, your application will be submitted to the credit card processor’s underwriting team. Once approved, you’ll be provided with whatever hardware, payment gateway, or other setup you require, and you’re ready to accept credit and debit cards.
How do I get a high ticket approval?
A precious metals business typically needs to accept high tickets. A high ticket, simply means that you will likely sell products that total in the high hundreds if not thousands of dollars with some regularity. A typical high risk merchant account (and even most low risk merchant accounts) will have a cap on the amount you can accept from a single customer, and if that cap is exceeded the transaction will simply decline. Thus, to ensure that your precious metals business can function properly, it’s important to inform your high risk merchant services provider at the time of application that you will sell products with a high average transaction size (called your “high ticket”) and that you will need approval for tickets at that range. If your high risk merchant services provider accepts precious metals businesses regularly, they’ll likely know this without needing to be told. But just to be safe, check the application for the amount listed as “high ticket” against your business’ needs, to ensure you can accept customer’s payments for all of your product packages.
Return to Table of Contents
Point of Sale, Shopping Cart and CRM Integrations
Many precious metals vendors have a specific type of CRM, online shopping cart, or point of sale system that they’d like to use in their business. To ensure that’s possible, you’ll want to make sure that the system you want to use is integratabtle with the credit card processor that you’re applying with.
Most competent merchant service provider’s sales teams will be able to quickly tell you over the phone whether the system, software or hardware you want to use can be integrated. And while, for example, Soar Payments, through its numerous partnerships offers one of the most comprehensive selections of CRMs, shopping carts, and point of sales compatibility for jewelry merchant accounts. Contact our sales team to discuss your company’s specific needs.
Return to Table of Contents
Question? Fire Away. We’re Ready to Help.
If you’ve got a question about a payment gateway, credit card terminal, chargeback management tool, or anything else related to precious metals credit card processing and want some advice, email me your question directly: AdamCarlson@soarpay.com.
Ready to Get Started?
Ready to start accepting payments at your precious metals company, Apply Now.
Everything a Precious Metals Business Needs to Know About Chargebacks
Regardless of whether you sell gold coins, gold bullion, platinum, silver, collectible jewels, or other precious metals, your business needs to understand chargebacks. That’s because precious metals businesses in particular are the target of a great deal of ‘friendly fraud’ chargebacks, and excessive or improperly managed chargebacks are not only a significant financial drain on a precious metals business, but are also the primary reason precious metals sales companies have their merchant accounts terminated.
What is a Chargeback?
A chargeback is when a customer calls their credit card issuer (the phone number on the back of their credit card) to dispute a credit card charge from your business. The customer can dispute the charge for any of dozens of reasons (e.g. the gold coin was not as advertised, the product was never delivered or delayed, the customer was billed more than they’d agreed, they don’t recognize the charge, etc.) Regardless of why the charge was disputed, once disputed the credit card chargeback process has begun. At this point, the money the customer previously paid you is then immediately pulled by the credit card processor from your company’s bank account and held in escrow. The precious metals company then has to affirmatively prove that the charge was legitimate, or else the funds are returned to the customer.
The chargeback process seems fair, why do I need to worry about it?
Unfortunately, a shocking number of precious metals customers use the chargeback process for illegitimate if not fraudulent purposes. And if unchecked, fraudulent chargebacks can destroy a precious metals company. The most common type of illegitimate chargeback is called, “friendly fraud”. This is the term for when a precious metals customer starts a chargeback either in the hopes of getting the item for free (by getting a refund from their credit card company and keeping the merchandise), or by circumventing the business’ stated refund policy by resorting to chargebacks.
No matter the exact form it takes, ‘friendly fraud’ is incredibly expensive for a precious metals business to deal with, and is surprisingly common because most customers don’t even realize that by initiating a fraudulent chargeback they are effectively stealing from the business. The reason these chargebacks are so expensive for a business, is because the chargeback dispute resolution process places a heavy burden on the business. If there is any doubt as to whether the customer’s claim has merit, the customer will win the dispute. And as a result, a precious metals business must provide very technical and tedious responses to the credit card processor’s questions in a very short amount of time. Because of these technical requirements, which most small and mid-sized businesses are ill equipped to respond to, most precious metals businesses either end up losing chargeback disputes in which they were actually defrauded, or giving up entirely and simply not fighting chargebacks. Unfortunately, this leads to a high number of precious metals business’ having their merchant accounts terminated by their credit card processor, when many of the disputes were illegitimate.
Note: As a consequence of its complexity, Soar Payments builds into their payment gateway as a default service, a chargeback management service which dramatically reduces the burden on precious metals businesses to effectively avoid, respond to, and win chargeback disputes.
Why do precious metals companies get lots of chargebacks?
Precious metals businesses get more than the average business in terms of the quantity and size of chargebacks. The reasons include:
- Precious metals purchases are typically high dollar items. Customers considering initiating a chargeback, regardless of whether their dispute is legitimate or illegitimate, rarely bother to initiate chargebacks for small charges. By contrast, they are far more likely to initiate a chargeback, again for both legitimate and illegitimate reasons, for high dollar purchases.
- Precious metals purchasers occasionally regret their purchase. Unfortunately, due to the volatile nature of precious metals, most precious metals vendors have limited refund policies. Consequently, customers who want a refund, but can’t obtain it through the legitimate refund policy, will often seek to use the chargeback process as a workaround to obtain a refund.
- Precious metals, particularly coins and jewels are often subjectively valued. Thus, invariably, some customers will believe they have been overcharged for a product or item, and therefore feel justified in initiating a chargeback. In addition, in some cases, the customer does actually have a legitimate claim of counterfeit, substandard, or fraudulent goods being sold.
- Most precious metals businesses are small businesses. Consequently, they do not have the name recognition that a larger business has, which can lead to a higher than expected number of clients not recognizing the charge. Moreover, small businesses often do not have chargeback prevention measures build into their point of sale or eCommerce platform, thus incur a larger number. And finally, small businesses are often targeted by fraudsters who know that while a large company is almost certainly prepared to fight a chargeback, many small businesses either do not fight, or don’t fight well.
Return to Table of Contents
Need Precious Metals Merchant Services?
We’ve Got You Covered.
Soar Payments provides ACH, debit and credit card merchant services to retail, catalogue, MoTo and eCommerce precious metals business. So when you’re ready, we’re ready.