California Bill AB1500 is up for a Vote – Electronic Cigarettes Online Sales

May 22, 2014

California Bill AB1500, which deals with adding fees to e-cig purchases online, is up for a vote. This bill could have hazardous effects on those in the e-cig business, especially if you do not have an e-cig merchant account or a merchant account processor who is familiar with the terms of the bill, as it is likely to pass. This bill, and the hidden terms in it, can heavily damage the online e-cig industry.

This bill, which was once passed through the state house but then failed in the state senate, targets e-cig merchants through tricky taxation. It is tricky because they label it as a service, but it is indeed a tax. The new fee would be $5-$6 per order to authorize an “Adult Signature” for delivery. The adult would have to be over the age of 21, and would perhaps have to take the day off work to get their package. The e-cig and e-cig merchant account providers, such as eMerchantBroker, do not have any issue with the age verification at the time of order for those over the age of 18. The vast majority of purchasers online are of legal age, and this should not affect business. The bill states that “Vapor consumers over 18 years of age (but under 21) will be unable to receive their products. These adult smokers need options more than any other group – this is the age span where a lifelong addiction habit is cemented into their lives”. The state does not offer up an alternative for this age category, as it is still legal for those between 18 and 21 to purchase tobacco cigarettes. The fact that they are trying to limit the availability of e-cigs to this age group is horrendous, as e-cigs seem to have less effect on the body. As horrendous as this is, the extra charge for an adult to sign for the product is a way for the state of California to impose a tax on customers who want to purchase a legal product.

This bill is likely to pass, but it will no doubt have lasting effects on the online e-cig industry. Merchants need to make sure that they are up to date on all new legislation. This can be hard if you do not have a merchant account processor. While it can seem impossible to find a merchant account processor who accepts e-cig merchants, there are a few who do. eMerchantBroker, for instance, is on top of their game and is in tune with all new reports and legislation regarding the e-cig industry. Their fees are also very reasonable.

If you are not sure how this new law will impact you and your e-cig business, feel free to contact us today!

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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