Four Things You Need To Know About Selling Spirits Online

Mar 18, 2015

Selling alcohol, liquor, and spirits online is the latest iteration of an aged industry. But, the retail sale of alcohol in the United States is a highly regulated and watched over practice. The Alcohol and Tobacco Tax and Trade Bureau (TTB) under the US Department of Treasury is responsible for the oversight of any merchant selling spirits, online or offline. It’s through their rules, regulations, and requirements that a merchant will need to weave their way if they want to open an online shop. Here are four must-know facts about opening a spirits store online.

1. You will still need to be licensed and registered with the TTB

In some industries, online retailers can be a bit of a grey area between state and federal rules and regulations. But, for spirits and alcohol, it is still mandatory that you register with the TTB. To begin sales of alcohol a merchant must complete the TTB F 5630.5d form to receive authorization. Strict records are also required to be maintained regarding the sales of alcoholic products.

2. You must contact state government agencies

In addition to registering with the TTB, to sell alcohol and spirits online you must contact your state’s government agencies to check regarding any special licenses or permits. There also may be additional taxes for your state for the online sales of alcohol. Sometimes referred to as ‘direct shipping,’ each state may have its own special rules and regulations for the sale of alcohol online.

3. If your alcoholic products are destroyed during shipping, you may be able to have your tax money refunded

In the case of your products being destroyed in transit, it is possible to have your tax payments refunded by the government. This is a major concern for online retailers as the shipping process isn’t the classical over the counter approach. In the case of your property’s destruction, you may file a claim form with the TTB. The form is the TTB F 5620.8 form and can be found on their official website.

4. You can find a specialized merchant account for processing credit and debit card payments

An alcohol sales merchant account can easily be set up online and away from the traditional banks and financial institutions that reject high risk merchants. Due to the risks of product damage and the complications of registering with the TTB, becoming licensed with the state, and the overall risks associated with online businesses, payment processing can be tricky. But, at companies like ours, it can be easy and painless to set up such a merchant account for all of your merchant services.

Opening an online outlet for your liquor store, or if you want to ship directly and skip the middleman, is not a complicated process as long as you follow the guidelines set up by the TTB. Careful coordination with federal and state agencies will ensure your business is legal and eliminate a major amount of risk for your enterprise. Then, all that is needed is a specialized merchant account and you can begin your alcohol sales online with ease.

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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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