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.
