While most businesses strive to sell high-ticket merchandise, there can be downsides to bigger transactions. This is especially true if you’re in a high-risk industry or processing transactions via overseas companies on behalf of international clients.
Not surprisingly, certain business owners are forced to consider alternative payment processing options, which often charge higher fees and can be fast to place freezes on company accounts. To help you navigate these considerations, this article will take a closer look at high-ticket merchandise and why payment processors (and many banks) consider it to be high risk.
Feel free to use the table of contents to jump ahead to any sections that are immediately relevant to your search.
Table of Contents
High-Ticket Merchandise 101
As mentioned, when it comes to selling high-ticket merchandise, business owners may face challenges finding payment processors that are willing to serve them. This is especially true when receiving funds from international clients like those in China, India, or parts of the Middle East.
One of the main reasons for this is that the negative impact of a chargeback on a single order can be considerably higher. So payment processors prefer to avoid these types of merchants, especially when jurisdictions with higher chargeback rates are involved.
For reference, a chargeback refers to a disputed charge or fraud claim by a credit card provider. The normal chargeback rate is approximately 0.5%. With this standard rate in mind, a retailer with low-priced merchandise would have a reasonably low value of chargebacks.
For example, a retailer with $10 products at 0.5% will not represent a significant value to the business, payment processor, or credit card company. This reduces the overall risk of chargebacks for all parties involved.
However, with high-ticket merchandise, even a single chargeback can represent a significant amount of money for all parties involved in the transaction, which raises the risks.
In certain instances, businesses dealing with higher-risk transaction activities and less favorable jurisdictions may benefit from considering alternative payment methods, including basic options like checks and transfers.
As a result, many mainstream payment processors prefer to avoid high-ticket merchandisers altogether. Instead, they opt to serve businesses selling lower-value products where chargebacks will not have an outsized negative impact on the business.
Do You Want Our Free Non-Resident Banking Guide?
Sign up here to receive our Free Non-Resident Banking Starter Guide and weekly updates on the best account opening options available:
Frequently Asked Questions
Below are two of the most common questions that we receive from people looking to understand their payment processing options for high-ticket items. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
What Are Considered High-Ticket Items?
High-ticket items cover a wide range of industries and product categories, from luxury items like jewelry and watches to large items like cars and boats.
Of course, high-ticket items also include online purchases, memberships, and other forms of product fulfillment.
In general, most payment processors consider anything over $1,000 to be a high-ticket item. However, most payment processors will have their own policies surrounding specific thresholds.
What Is High-Ticket E-commerce?
High-ticket e-commerce products cover a wide range, typically consisting of products over USD $1,000. That said, every payment processor will have its own thresholds in terms of what they consider high tickets for e-commerce businesses.
Ready to Explore Your Options?
If so, you can access GlobalBanks Insider and start the process of applying for an offshore account in a few clicks.
GlobalBanks Insider is a dedicated account opening solution that involves direct support from our team and direct introductions to the banks of your choosing. It gives you instant access to the…
+ Direct support from a team of banking experts
+ Direct introductions to your desired banks
+ Answers to your most pressing questions and challenges
+ Expert insights on which banks to choose & why
+ Plus, FULL access to our entire suite of account opening tools and intelligence!
And “yes!” GlobalBanks Insider is designed to help foreign and non-resident individuals and companies open bank accounts.
You can learn more on the Products page on our website.
