Pet Products

Why Pet Products businesses are considered High-Risk?

Nature of the Industry

  • Pet owners are passionate and may dispute charges or request refunds
  • Pets have specific dietary needs, increasing the likelihood of returns or exchanges


Fraudulent Activity

  • Fraudsters use stolen credit card information to purchase expensive pet products
  • This can result in chargebacks and financial losses for merchants


Payment Processor and Financial Institution Caution

  • Higher processing fees and stricter underwriting requirements may be required
  • Limitations on the types of products that can be sold may be imposed

Seasonal Fluctuations

  • The pet product industry is subject to seasonal fluctuations, with spikes in sales during the holidays and other special occasions
  • This can increase the potential for chargebacks, as some customers may dispute charges if products do not arrive in time for a special event


Regulatory Compliance

  • Pet products are subject to regulatory compliance, including guidelines from organizations such as the FDA and USDA
  • Noncompliance can result in fines, legal action, and reputational damage, which can make payment processors and financial institutions hesitant to work with pet product merchants.

Mitigation measures for Pet Products merchants to reduce risks when selling online

Implement fraud prevention measures: Pet product merchants should use fraud detection tools, such as AVS and CVV verification, to ensure that orders are legitimate. They can also use fraud management systems that can automatically flag suspicious transactions and help prevent chargebacks.

  • Maintain clear refund and return policies: Merchants should clearly outline their refund and return policies on their website, including information on how to initiate a return or refund, and the timeline for processing. This can help reduce the potential for disputes and chargebacks.

  • Use a reputable payment processor: Pet product merchants should work with a payment processor that specializes in high-risk industries and has experience working with pet product merchants. These processors typically have systems in place to help mitigate risk and can offer services such as chargeback management and fraud prevention.

  • Monitor inventory levels: To avoid selling out of popular products, merchants should regularly monitor inventory levels and adjust their stock accordingly. This can help prevent customers from becoming frustrated and initiating chargebacks due to delayed shipments or backorders.

  • Stay up-to-date with regulatory compliance: Pet product merchants should stay informed about regulatory compliance requirements, such as those from the FDA and USDA, and ensure that their products meet all necessary standards. This can help reduce the potential for fines, legal action, and reputational damage.

Being a high-risk merchant vs. a regular merchant

  • Higher payment processing fees
  • Lengthier application process
  • Higher chargeback fees
  • Cash reserve requirments:
    • Capped reserve
    • Rolling reserve
    • Upfrom reserve
  • Volume caps
  • Additional technical requirements
  • Being on the TMF / MATCH list


Check out our knowledge hub to learn more about what processing fees, application process, chargebacks and cash reserve requirements or TMF / MATCH list mean. 

Other risk factors?

There may be other risk factors as to why you as a Pet Products merchant are classified as a high-risk merchant, such as:
  • Accepting subscription-style payments

  • Being on the Member Alert to Control High-Risk Merchants, or MATCH list — a list managed by Mastercard that monitors merchant behavior, like chargeback history

  • High average transaction sizes

  • High sales volumes

  • Highly regulated industries

  • International sales

  • Large number of card-not-present transactions

  • Little to no business experience

  • Long fulfillment time frames

  • New or poor credit scores

  • Past fraud or illegal activity

As high-risk Pet Products merchant how to find a payment provider?

It takes effort for businesses to secure a payment processing partner when they are considered high-risk but it is definetly possible to find the right payment solution if you focus on:

  • Maintaining healthy cash levels. Most processors would like to see a healthy cash level in your business bank account. 
  • Try to reduce chargebacks. There could be a number of factors behind the soaring number of chargebacks in your business. Whatever the reasons may be, you can always analyze them and try to reduce your chargebacks.
  • Be transparent. Disclose all materials and relevant information during the application process. Payment processors may ask you for very detailed information about your business and finances. Be open, honest, and transparent.
  • Keep your documents ready. This could mean having six months of bank statements and a few years of tax returns. That said, each processor has its own set of requirements so make sure to check them.
  • Follow the guidelines of your payment processor. When you apply for a high-risk payment solution, besides your business needs, the risk the payment solutions provider takes also matters. So, be flexible and see if there are things you can do to reduce your risk by discussing with them and following their recommendations.

Our Platform will find the right payment solution for your business

Our biggest differentiator? 

We provide payment solutions for merchants with a 90% Succes Rate by Algoritmic matching and pre-KYC onboarding in each industry and region globally.