A smoke shop is highly lucrative in today’s market, but it is also highly regulated. You will need to set up a system that allows you to accept debit and credit card transactions. However, whether you sell cigars, vapes, CBD, or even glass, the most essential thing needed to expand your operation is obtaining a merchant account. For smoke shop owners, however, obtaining a merchant account approval can be challenging. Smoke shops are typically classified as high-risk merchants, which makes banks and traditional processors hesitant to work with them. But there is a hope: getting approved if you know the preparation. This easy-to-follow guide will take you through everything you need to know to get approved for a smoke shop merchant account confidently.
Step 1: Know Why Smoke Shops Are High-Risk
It would be helpful to know what makes an application for a smoke shop merchant account approval high-risk before applying. Smoke shops also:
- Regulatory limitations: Items like tobacco, vapes, and CBD fall under federal, state, and local regulations.
- Chargebacks: Smoke shops tend to work with more cases of returns or disputes.
- Industry perception: Banks tend to steer clear of reputational or legally questionable businesses.
This will help you prepare the paperwork and expect what kinds of questions underwriters will pose.
Step 2: Choose a High-Risk Merchant Services Provider
Not every merchant account provider is able to cater to high-risk businesses. In fact, most of the traditional banks simply deny the application.
Look for those who accept merchant accounts for high-risk or smoke shops. They usually have the following offerings:
- Payment gateways for online and brick-and-mortar stores
- Chargeback prevention tools
- Clear fee structures
- Experience in smoke, vape, CBD, or hemp products
Beware of generic payment processors – they may close your account at some point unexpectedly.
Step 3: Prepare Your Documentation
Document preparation is one of the most critical elements of the entire process. Underwriters would like to know that your business is compliant, legitimate, and financially responsible.
Here’s a brief rundown of what you would generally be asked for:
- Valid government-issued ID (passport or driver’s license)
- Business license or proof of registration.
- EIN (Employer Identification Number) from the IRS.
- Voided business bank check or bank letter for deposits.
- 3-6 months of business bank statements.
- 3-6 months of processing statements (when available).
- Website and product list (for online stores).
Ensure that all documents show the same name, address, and bank details.
Step : Set Up a Compliant Website (For Online Stores)
If you plan to accept online payments, your website must meet specific requirements. These include things like:
- SSL certificate (secure browsing).
- Clear refund and privacy policies.
- Terms & Conditions.
- Contact details (phone number, email address, and postal address).
- Age verification system (if selling vapes or tobacco).
Accurate descriptions are essential; specifically, this refers to not making any medical or illegal claims when selling CBD on your website.
Step 5: Be Honest About What You Sell
There are a few quick ways to get denied, or worse, have your account shut down soon after opening, such as trying to “hide” certain products or mislabeling them on the application.
List your inventory and clear out your application. Rolling papers, grinders, or Delta-8 THC-here’s a way to show the provider you’re a responsible business owner, not trying to cut corners.
Step 6: Submit Your Application and Communicate Promptly
Once everything is in order, you can apply for the merchant services provided by the selected institution. The assessment of applications typically takes 24-72 hours, with an average turnaround time based on the thoroughness of your documents. When the underwriter has any follow-up questions or requires additional documentation, make a point of addressing them promptly. Otherwise, waiting around or not doing it could set back or even abort the approval.
Step 7: Get Your Payment Gateway or Terminal Installed
After being approved, you will be given a terminal, either for a physical retail store or a payment gateway in the case of e-commerce. Many also allow integration with big platforms such as Shopify, WooCommerce, or BigCommerce.
Final Thoughts
Acquiring a gun merchant account or a smoke shop is possible, but it requires good preparation, honesty, and finding just the right vendor. Secure a high-risk merchant account provider, have the necessary documentation ready, and maintain compliance to get your shop up and running for seamless payment processing and long-term profitability. Need help choosing the best provider for you? Contact Green Financial Service; we have been in touch with hundreds of smoke shop owners and can help find the ideal match.