Create Your High-Risk Furniture Merchant Account
Like other industries, furniture businesses have embraced the world of ecommerce. And it’s paying off. Online household furniture sales reached $55.65 billion in 2021. With COVID trends like online shopping and remote work here to stay, online furniture sales will only continue to grow. E-retail sales of furniture and homeware are expected to increase to $61.2 billion in 2025.
Although the ecommerce furniture market has plenty of potential, financial institutions don’t want to work with them. Banks consider online furniture businesses to be riskier than retail ones, and therefore, refuse to provide them a merchant account. Without a merchant account, you can’t process credit card payments which can severely restrict your online sales.
Why are Online Furniture Businesses Considered High-Risk?
Despite the convenience and popularity of buying furniture online, banks are more hesitant to work with ecommerce furniture merchants compared to traditional retail businesses. Selling furniture online is riskier than selling in-store, making ecommerce furniture merchant accounts high-risk to banks. A few reasons why banks avoid online furniture businesses include:
A corner couch can cost $1,000 and an office desk may set people back $5,000. These high-value sales are more prone to buyer’s remorse. It’s common for people to get a sticker shock when they see their credit card statements and have the transaction reversed.
From fulfillment issues to damaged goods during long-distance shipping, or unhappy customers, many things can go wrong when selling furniture online. When shoppers don’t receive their goods on time or receive damaged furniture, they’ll file chargebacks to get their money back.
Card-Not-Present (CNP) Transactions
Another reason why banks perceive online furniture merchant accounts as high-risk is the way payments are processed in the industry. Ecommerce furniture merchants process CNP transactions to make a sale. These transactions are more vulnerable to fraud than in-person payments.