Credit card processor not allowing e-cigs

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HarmonyPB

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Wow! That's insane! What is authorize.net used for exactly? Does that just mean that ecig companies will not be able to use it to process credit cards? Does that affect us or them in a large way? Sorry, I don't know much about these things. Any info is appreciated.

Sent from my phone using Swype...nuff said
 
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Dj Xy

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All merchants, e-cig and otherwise, use a secondary company to process credit cards.
Authorize.net is one such company which until recently was used by several venders, with them banning use for ecig sales, the vender has no way to accept credit cards, and we have no way to pay for orders, so it affects both merchants, and customers.
Paypal did this years ago, and now it seems credit card processors are starting to follow suit, why I don't know, seems to me it would cut into their profits.
 
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Bill Godshall

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If Paypal or Authorize.net don't know the products are e-cigarettes, how can they refuse to process the credit card payment?

My point is that by simply telling Paypal or Authorize.net that the products are "vaporizers", "smokefree alternatives" or something else, it is unlikely they'll figure out the products are e-cigarettes (but I'm no expert on credit cards or other electronic financial transactions).

Even if many/most credit card processors won't allow e-cigarette sales, there are very likely other competitors willing to do so.
 

nebulas

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This is very bad news.
crying-and-sniffling.gif
 

QuickSwitch

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Well there goes my plans.....and I just registered a domain name for my online store I was hoping I would open......:(
Don't be discouraged, it's terrible that this is so often the case with trying to get a merchant account to sell vaping products, but there are companies out there. Given, I don't have much experience with this myself, but I have heard a success story or two from several vendors in both the case of getting a merchant account to begin with and further getting a merchant account that doesn't charge an absurd percentage because they can. I'll have to do some digging...

If you already had something setup with Authorize.net, doing what Bill suggested above may very well be a viable option, but I would certainly look over the TOS regarding any penalties beforehand.
 

Vocalek

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Now wait just a cotton-pickin' minute. Section 2.xiii does read

is associated with electronic cigarettes (i.e., "e-cigarettes") or any similar product; or

But what is the justification? Some other processors refuse to process the sales of any and all tobacco products, and I was wondering whether this was a case of mistaken identify (i.e., they believe e-cigarettes are a tobacco product.) For the record, e-cigarettes contain no tobacco, and currently are NOT regulated under the Tobacco Act. If the FDA issues a deeming regulation, and that regulation goes into effect, then they might have an excuse to lump e-cigs in with tobacco products.

So I went looking for "tobacco products" in their list of prohibited products, and found this:

2.i is unlawful or violates any applicable local, state, federal, national or international law, statute, ordinance, or regulation including, without limitation, Credit Card Association rules, consumer protection law, Internet tobacco sales, unfair competition, antidiscrimination or false advertising;

Now I happen to know it isn't totally illegal to sell tobacco products over the internet, so I looked up the laws and found that the only Federal law that applies to (some) tobacco products is the PACT act. Even that doesn't prohibit sales. It prohibits them from being delivered via the US Postal Service (which is a questionable provision, since the US Postal Service is not truly a government agency... so Uncle Sam is discriminating against USPS in favor of other carriers.) It also requires age verification. But the most important provision is that it requires each vendor to collect the applicable state tobacco taxes and pay them to the state where the products are delivered. HOWEVER, Cigarettes, roll-your-own tobacco, and smokeless tobacco are covered. Cigars are excluded.

So E-cigarettes are NOT included in the PACT act and will not be automatically included even if the FDA issues a deeming regulation.

This means that Authorize.net does not prohibit sales of tobacco products--it merely demands that all laws governing such sales are obeyed.

I suspect that someone has been feeding Authorize.net a line of bull-scat.

Recall that there was an attorney whose name I refuse to type in here because the man is a freaking publicity hog, who notified Pay Pal that e-cigarettes are an illegal product that the FDA was going to ban as an unapproved drug-drug delivery device. This took place before the court case was decided that ordered the FDA to stop confiscating incoming shipments, told them they could not regulate the products as drugs and suggested that if they wish to regulate them, they should do so under the Tobacco Act.

As mentioned above, e-cigarettes were not one of the tobacco products specified in the Family Smoking Prevention and Tobacco Control Act, but the Act does permit the Secretary (of Health and Human Services) to issue a deeming regulation to include other products to be regulated under the Act.

Bottom line: Authorize.net probably does not realize that they are being USED to prevent people from using an effective method to stop smoking. Authorize.net is being duped into preventing the lives of smokers from being saved.
 
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Berylanna

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Happened to my favorite vendor : ( If they can't find a new cc processor then they've told me they will likely go out of business. They have customers all over the country.
I didn't join Dwolla until I ran into the second e-cig vendor that uses them. Then I joined. It is free. BUT you have to either keep money in your Dwolla account or else read more of their instructions, because by default you can't pay if your account doesn't have enough in it to cover the purchase.

And it takes 2-3 days to get the money into your account once you ask for it.

I hope there's a faster way to use Dwolla when I'm in a hurry, but I think it could not hurt for a lot of us to start using it sometimes at least as a reward for not discriminating, AND they don't charge the vendors a fee, which means some vendors give a discount for using Dwolla instead of credit cards.
 

sailorman

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I didn't join Dwolla until I ran into the second e-cig vendor that uses them. Then I joined. It is free. BUT you have to either keep money in your Dwolla account or else read more of their instructions, because by default you can't pay if your account doesn't have enough in it to cover the purchase.

And it takes 2-3 days to get the money into your account once you ask for it.

I hope there's a faster way to use Dwolla when I'm in a hurry, but I think it could not hurt for a lot of us to start using it sometimes at least as a reward for not discriminating, AND they don't charge the vendors a fee, which means some vendors give a discount for using Dwolla instead of credit cards.

If you look into Dwolla a little more, you'll see that they have Dwolla "Instant". If you don't have any money in your account, they'll front you up to $500 for 30 days with no interest. It's added to your account immediately. If you don't pay in 30 days, they'll assess you a $5 fee for every month you haven't paid it off.
You're right that they don't charge a fee to vendors. Well, actually, they charge like a nickel or a quarter or some insignificant amount, regardless of the transaction size.

I'm in the process of starting a site and intend to use Dwolla as a checkout method. I believe I can offer about 5% as a discount if you pay via Dwolla.

Dwolla has also begun coordinating with certain banks for automatic debits. It's not very widespread because it's a small network and it's up to each individual bank as to whether they want to participate. They're working on it though and I'd love to see the day when they give Preypal a run for the money.
 

McDougal

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Apparently a widely used credit card processor, Authorize.net, has added e-cigs to there list of banned products.
http://www.authorize.net/company/use.php see section 2.xiii in there TOS

It's possible that they included e-cigs because of illegality in some jurisdictions. Even though reputable vendors already abide by import/export laws, they may be avoiding it altogether for this reason. Being that the e-cig industry doesn't even approach the size Amazon, etc, the risk could outweigh potential profits.

But that's just my guess, for what it's worth.
 
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