Do you currently have an approved merchant account and looking to sell new products or services in your retail store or on your website? This post is intended to outline the rules imposed by your processor with regard to changing the products or services your business sells.
When your business originally applied for your merchant account you were required to give a description of the products and services you intended to sell. This product and service description was used by your processor to determine the SIC code for your business. The SIC code associated with your business determines the risk category used to underwrite and approve the account.
It is important to understand that the risk associated to the products and services you sell is significant to the processor that approved the account as they are ultimately responsible for any chargeback liability. Certain products represent less charge back risk, examples include; shipping, restaurants, screen printing, office supplies etc. Other products represent higher risks for chargebacks, examples include; electronics, travel, pharmaceuticals, auctions etc. It comes down to the fact that some products have a higher level of fraud associated to them as thieves attempt to acquire them.
In conclusion if you are looking to change or add new products and services to your business you will need to determine if the new offering resides in the same SIC code classification for the account that you were originally approved for. If they do you can usually sell and accept payment with your current account. If the new or changed products and services are outside of the SIC classification of your current account you will need to apply for a new account. If you are unsure, it is advisable to contact your processor. There can be serious consequences if you violate your merchant services agreement by selling unapproved products.