Credit Card Processing Tips for Jewelry Merchants

Jul 23, 2020

The jewelry and watch market is expected to grow to a $408 billion industry by the end of 2019. This outgrowth has been stimulated by the growing prevalence of online stores. It is estimated that online sales for the global jewelry industry will comprise 25% of total retail sales by 2020. With this growing trend, it is no wonder that retailers will be rushing in to take advantage of this popular sector that is e-Commerce. What they may not know is that by jumping on the e-Commerce bandwagon, they are opening themselves up for an increased risk for fraud. 

Since jewelry merchants are in the business of selling luxury items like jewelry, they have acquired a reputation for excessive chargebacks. As a result, banks and other traditional payment processors are less likely to grant jewelry merchants with a merchant account. 

Why Are Jewelry Merchants Considered High Risk?

Consumers are finding themselves with more discretionary income so that they can splurge on luxury items such as jewelry. Their high price tag and value make them an immediate target for fraudsters. Other reasons that make jewelry a prime target for fraud include:

  • Demand for luxury as well as name-brand merchandise is high.
  • It is easy for fraudsters to resell these high-ticket items to shoppers looking for a good deal.
  • The mere fact that jewelry is compact also facilitates its shipment, as it would be less expensive. 

Jewelers also face specific challenges such as card-not-present fraud. For example, during major holidays such as Christmas, Valentine’s Day, and Mother’s Day, jewelers have to be extra vigilant as fraud attempts tend to spike during these major holidays. 

Another incidence they need to look out for is when a first time customer requests a large order of very expensive merchandise. This can also be flagged as fraud.

Finally, when it comes to telephone transactions, customers placing orders over the phone with in-store clerks presents a considerable screening challenge. Without “traditional online ordering data points”, other screening methodologies should be in place. 

What Can Jewelers Do To Minimize Risk For Fraud?

Running your jewelry business should not be a daunting endeavor. Although card-not-present fraud is growing in prevalence, you don’t need to simply accept this fact and hope for the best. There are some courses of action you can take today to shield yourself from potential fraudsters ready to steal your merchandise. Take a look at these tips below.

  • Monitor your order customer patterns: Take time to analyze customer purchasing behavior to spot any unusual patterns. For example, are you finding the same customer is ordering numerous quantities of the same high-ticket merchandise? This should not be ignored.
  • Investigate all orders with expedited shipping: It is quite common for fraudsters to pay extra for expedited shipping in order to decrease the paper trail and turn around stolen merchandise quickly.
  • Validate order information: Always look at the billing and shipping address on any orders that appear suspicious to verify that they are legitimate. Although this could potentially create resistance from good customers, it may foster good, trustworthy relationships. 
  • Check IP addresses: Retailers should verify that the IP address on the order is from the same country as the one listed on the shipping or billing information.

The Takeaway

It is clear that the online jewelry business is a growing and profitable sector to be in. It is also true that it is a prime target for fraudsters for the aforementioned reasons. That is why it is crucial that a screening system is in place to catch every fraudulent transaction. Not doing so will only bring disastrous repercussions for the merchant. Be prepared and implement all the necessary protocols to protect your customers and your business.

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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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