The vape industry refers to the production and sale of electronic cigarettes and related products, such as e-liquids and vape pens. Vape products are considered high-risk by merchant services providers because they are a relatively new and unregulated industry, and there is a risk of chargebacks and fraud associated with online sales. Additionally, many banks and financial institutions are hesitant to work with companies in the vape industry because of concerns about the health risks associated with vaping. There is a lot of chargebacks in the vape industry, and it is considered high-risk by merchant services providers.
It is possible to get a vape merchant account for a face-to-face retail business, as the risk of chargebacks and fraud is generally lower for brick-and-mortar stores than for online businesses. However, it is important to note that many banks and financial institutions may still be hesitant to work with companies in the vape industry due to concerns about the health risks associated with vaping, and may still consider such accounts as high-risk. It is advisable to shop around and compare different merchant services providers to find one that is willing to work with your business.
It can be challenging to get vape payment processing for an online e-commerce business, as many banks and merchant services providers may consider the industry to be high-risk due to concerns about the health risks associated with vaping, and the risk of chargebacks and fraud associated with online sales. However, it is not impossible to get a vape merchant account for an online e-commerce business, some merchant services providers and payment processors specialized on high-risk industries have a more flexible approach, they may offer vape payment processing, but they will likely charge higher fees and have stricter underwriting criteria.
Chargebacks are often high in the vape industry for a few reasons:
- Product disputes: Vape products are consumable items and can be easily damaged or defective. Customers may initiate chargebacks if they receive damaged or expired products.
- Age verification: The sale of vape products is restricted to certain age groups, some merchants may not have proper age verification systems in place and this may cause chargebacks.
- Shipping issues: Vape products are considered hazardous materials, therefore, shipping may have some restrictions, if a customer didn’t receive their order or it was delayed they may initiate a chargeback.
- Health concerns: Vaping has been the center of many debates and controversies. Some customers may initiate chargebacks if they feel misled or if they had health concerns after using the product.
- High return rate: Vape products are consumable goods, and customers can return them easily. High return rate may lead to chargebacks.
It’s important to note that chargebacks can be costly and damaging to a business, and it’s best to have proper systems in place to prevent them, such as clear return policies and age verification process.
The legality of selling vapes online:
The legality of selling vapes online and in retail varies by country and region. In the United States, the sale of electronic cigarettes and related products is regulated by the Food and Drug Administration (FDA). As of August 8, 2016, the FDA has extended its regulatory authority to e-cigarettes and other tobacco products, including vape pens, e-liquids, and similar products.
In the United States, it is illegal to sell vaping products to anyone under the age of 21, and retailers are required to verify the age of customers purchasing vaping products. Retailers are also required to register with the FDA and submit product listings, and manufacturers of vaping products are required to report ingredients and harmful or potentially harmful substances in their products.
In the European Union, the sale of e-cigarettes and related products is regulated by the European Union Tobacco Products Directive (TPD). The TPD regulates the maximum volume of e-liquid that can be sold in a refill container, the nicotine strength of e-liquids, and the size and emission limits of e-cigarettes. Retailers and manufacturers are also required to register their products with the European Union and provide detailed information about the ingredients and emissions of their products.
It’s important to note that regulations and laws may change over time, and it’s the seller’s responsibility to stay informed and comply with the local laws.
What is the PMTA in regards to vapes and electronic cigarettes?
The PMTA, or Premarket Tobacco Product Application, is a process established by the Food and Drug Administration (FDA) in the United States, that requires manufacturers of electronic cigarettes, e-liquids, and other related products, to submit detailed information about the health, safety, and emissions of their products. This process is used by the FDA to evaluate the risks and benefits of these products, and to determine whether they should be authorized for sale in the United States.
The PMTA process includes submitting extensive scientific data, including data on the ingredients, emissions, and potential health effects of the product, as well as information on the manufacturing process and quality control measures. The FDA also requires manufacturers to submit information about the marketing and promotion of the product, as well as any other information that may be relevant to the evaluation of the product.
The PMTA process is intended to provide the FDA with the information it needs to make informed decisions about the safety and public health of electronic cigarettes and related products. The deadline for submitting PMTA applications was set on May 12, 2020, however, the FDA delayed the deadline till September 9, 2021. Manufacturers that did not submit an application by the deadline are no longer allowed to sell their products in the United States.
It’s important to note that, if the FDA concludes that the benefits of a product outweigh the risks, the product will be authorized for sale and will be able to continue to be sold in the United States.
Shipping Electronic Cigarettes
Shipping electronic cigarettes and vape products can be complex and subject to regulations that vary by country and carrier. In general, electronic cigarettes and vape products are considered hazardous materials and may be subject to different shipping regulations than other consumer goods.
In the United States, electronic cigarettes and vape products are considered to be “consumer commodities” by the US Department of Transportation (DOT) and can be shipped by ground and air transportation. However, they are subject to specific packaging and labeling requirements, such as using a strong, durable and leak-proof packaging, including proper labeling and documentation.
In the European Union, the regulations for shipping electronic cigarettes and vape products are set by the European Union’s Dangerous Goods Regulation (ADR) and the IATA Dangerous Goods Regulations (DGR). The regulations include packaging, labeling and documentation requirements. Electronic cigarettes and vape products must be shipped as “UN 3481 – Lithium ion batteries contained in equipment” or “UN 3480 – Lithium ion batteries packed with equipment”, depending on whether the battery is built-in or removable.
It’s important to check with the carrier and the local regulations for shipping electronic cigarettes and vape products before shipping them. Carriers may have different policies and some may not ship these products at all. Additionally, some countries may have restrictions or bans on the import of electronic cigarettes and vape products, so it’s important to check the regulations of the destination country before shipping.