Double Glazing Merchant Accounts: The Ultimate Guide

07 October 2024

Written by Libby James

Libby James is co-founder, director and an expert in all things merchant services. Libby is the go-to specialist for business with more complex requirements or businesses that are struggling to find a provider that will accept them. Libby is regularly cited in trade, national and international media.

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Double Glazing and Card Payments: what you need to know.

If you’re a double glazing business owner, you might already be aware that obtaining a merchant account isn’t always straightforward. Many providers categorise the industry as “high risk,” making it challenging to secure reliable payment solutions. But don’t worry—this guide is here to clarify everything you need to know about merchant accounts for double glazing businesses, why your industry is deemed high-risk, and what you can do to set up and maintain your account.

Why Are Double Glazing Businesses Considered High Risk?

In the world of merchant accounts, some industries are considered higher risk due to the nature of their transactions. Double glazing businesses, alongside other home improvement sectors, fall into this category for a few reasons:

Delayed Fulfilment: There’s often a significant period between when a customer places an order and when the installation is completed. This timeframe can range from 2 to 16 weeks, depending on the complexity of the job and the company’s schedule. During this period, customers have paid for a service they haven’t yet received, and this introduces a period of vulnerability for the acquiring bank.
Risk of Non-Delivery: If a company faces financial difficulties and ceases trading before completing an order, the acquiring bank could find itself liable for reimbursing customers. This scenario, although rare, has made the sector more prone to declined or terminated merchant accounts.
Chargebacks: Due to the high-ticket nature of double glazing transactions, chargebacks can be more impactful than in other industries. A single dispute over a large amount could significantly affect your cash flow and business stability.

Declined or Terminated Merchant Accounts

Perhaps you’ve had a merchant account for years, only to find it unexpectedly terminated by your acquirer. It’s a frustrating but not uncommon scenario in high-risk sectors like double glazing. Whether your account has been declined initially or terminated after some time, it’s essential to know that alternative providers are available.

While it may take a little more effort to find a suitable provider, the good news is that you have options, and we’re here to help you navigate the process.

What to Expect When Applying for a New Account

Applying for a new merchant account, especially in a high-risk sector, requires preparation. Knowing what to expect and having all the necessary documentation ready can smooth the process. Here’s a checklist of what you’ll need:

Proof of ID for all directors or shareholders owning more than 25% of the business.
Proof of Business Bank Account.
Proof of Directors’ Addresses.
Proof of Business Address.
Six Months of Processing History (if applicable).
Terms and Conditions of your business.
Refund and Cancellation Policy.

Having these documents readily available can expedite the application process and help demonstrate your company’s legitimacy and stability to potential acquirers.

Pricing for Double Glazing Merchants

As a high-risk merchant, your pricing structure may differ from standard low-risk businesses. Here’s what you can expect:

Slightly Higher Rates: Due to the perceived risk, you might be subject to slightly higher transaction fees.
Rolling Reserves: Some acquirers may hold back a percentage of your transactions for a short period to protect against potential chargebacks or financial instability. This is known as a rolling reserve.
Delayed Settlement Times: It’s not unusual for high-risk merchants to experience delayed settlements, meaning there could be a longer period before funds are deposited into your account.
IC++ Pricing: Double glazing companies are usually placed under what is called an IC++ pricing structure. This means your acquirer retains a margin on top of the interchange and scheme fees set by Visa and Mastercard. Make sure you fully understand what this means for your business’s cash flow. If you need help, we can explain the details to you.

Card Payment Methods for Window Companies

To accommodate your customers’ preferences, it’s important to offer multiple card payment options. Consider the following methods:

Portable Terminals: Ideal for taking payments on-site, especially during installations or consultations.
Virtual Terminals: Useful for accepting card payments over the phone.
Telephone Payments: Allows your team to process payments remotely, giving you flexibility in handling transactions.

How to Reduce Chargebacks

One of the key challenges for double glazing merchants is managing and reducing chargebacks. Here are some tips to help minimise disputes and maintain a good relationship with your acquirer:

Clear Communication: Ensure your customers are fully informed about the timeline, installation process, and any potential delays. Setting realistic expectations can prevent misunderstandings that lead to chargebacks.
Detailed Documentation: Keep records of all agreements, terms and conditions, and any changes to the order. This will be invaluable if a chargeback is raised.
Refund and Cancellation Policy: Make your policies transparent and easily accessible. This will help customers understand their rights and reduce the likelihood of disputes.

Wrapping It Up

While double glazing businesses may face more challenges when it comes to securing a merchant account, finding a suitable provider is not impossible. By understanding the industry’s unique risks and preparing all necessary documentation, you can position your business as a reliable partner for acquirers.

If you’re struggling to find a provider or have recently had your account terminated, The Payments Directory® can be an excellent resource for finding acquirers that specialise in high-risk sectors. Remember, the Merchant Category Code (MCC) for home supply warehouse stores is 5200, which can help narrow your search.

With the right support and preparation, you can find a merchant account solution that works for your double glazing business and helps you provide the best service to your customers.

FAQs

Why is it difficult for window companies to get a merchant account?

Window companies are often classified as “high risk” by payment providers due to the delay between payment and product delivery. This timeframe, which can range from weeks to months, creates a period where the customer has paid for a product or service that hasn’t yet been delivered, increasing the risk for the acquiring bank.

What are the common reasons for having a merchant account application declined or terminated?

Merchant account applications can be declined or terminated due to perceived high chargeback risks, poor credit history, or inconsistencies in the business’s financial documentation. In the window and home improvement industry, changes in business performance or negative customer reviews can also trigger termination by some acquirers.

What documents do I need to apply for a new merchant account?

To apply for a new merchant account, you will typically need the following documents: • Proof of ID for directors or shareholders owning more than 25% • Proof of business bank account • Proof of directors’ addresses • Proof of business address • Six months of previous acquiring statements (if available) • Terms and conditions • Refund and cancellation policy

What fees should I expect as a window company when setting up a merchant account?

Window companies often face slightly higher fees due to their high-risk classification. You may encounter a rolling reserve (where a percentage of your funds is held temporarily), delayed settlement times, and an IC++ pricing structure that includes interchange fees, card scheme fees, and a margin for the acquirer. It’s essential to understand these costs before signing up.

What payment methods are best for my window company?

Depending on your business model, a combination of portable terminals, virtual terminals, and telephone payment options might work best. Portable terminals are ideal for on-site payments during installation, while virtual terminals and telephone payments are useful for deposits and remote transactions.

How can I reduce the risk of chargebacks for my business?

To reduce chargebacks, ensure clear communication with customers about delivery times, and always provide written confirmations of the terms and conditions. Have a robust refund and cancellation policy in place and ensure it’s easily accessible. Keeping thorough records and promptly addressing customer complaints can also help mitigate disputes.

Can I still get a merchant account if I’ve been previously declined?

Yes, being declined by one provider doesn’t mean you can’t get a merchant account elsewhere. There are specialised high-risk merchant account providers that work specifically with businesses in sectors like double glazing and home improvements. It’s worth exploring options through industry directories or consulting with experts who can connect you to suitable providers.

What is IC++ pricing, and how does it affect my window company?

IC++ pricing is a transparent pricing model where you pay interchange fees set by the card schemes (Visa, Mastercard), a card scheme fee, and a small margin to the acquirer. For high-risk sectors like double glazing, this structure ensures that the provider’s risk is covered. While this pricing model can sometimes be more expensive, it offers transparency and control over your payment costs.