Can't use credit cards to buy loose tobacco online?
- Thread starter karlj
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Good Afternoon - I am Jessica, one of the owners of Just For Him. I am happy to answer any questions and can always also be reached by phone at 417-886-8380 or email at jessica@justforhim.com
I'm going to hit as much as I can - If I miss a question, please call me on it. It was an oversight, not deliberate.
Yes, but... This is a policy that is apparently very new. We were not aware of it until they called and they told us that we were found by a "secret shopper." If I was a store that had not been "caught" yet, I would continue business as usual.
We were notified the day before the email we sent went out. We have always been a fairly transparent company. We spent the first day talking to the credit card companies, our bank, our processor and our lawyer as well as contacting other online vendors and the IPCPR. I do not have an implementation date from the credit card company. I do know of at least one site that was contacted before us and one after us. Neither is releasing their name, so I can't give you more than the knowledge that we are not the only ones that have seen or will see changes.
As far as legislation goes, we tend to be in the loop. This policy did catch us unaware. It does apply across the board. I suspect the biggest place they will enforce right now is on new applications. That is a guess, not insider info.
Based on what we were told, this is for pipe tobacco specifically. The reasoning is that many places sell those bags of tobacco that are called pipe tobacco, taxed as pipe tobacco and are not used for anything but rolling. It is not legal to ship rolling tobacco, but it is legal to ship this form of pipe tobacco as a retailer. Apparently, because this form of tobacco appeals to underage smokers, it is more prone to chargebacks. This puts us in a high risk category with special rules. Some of these rules trickle in to us as we keep contact with the credit card company and while Mastercard told us that this was all credit cards, they are most definately the strong arm in this based on our experience.
--more to come--
I'm going to hit as much as I can - If I miss a question, please call me on it. It was an oversight, not deliberate.
Yes, but... This is a policy that is apparently very new. We were not aware of it until they called and they told us that we were found by a "secret shopper." If I was a store that had not been "caught" yet, I would continue business as usual.
We were notified the day before the email we sent went out. We have always been a fairly transparent company. We spent the first day talking to the credit card companies, our bank, our processor and our lawyer as well as contacting other online vendors and the IPCPR. I do not have an implementation date from the credit card company. I do know of at least one site that was contacted before us and one after us. Neither is releasing their name, so I can't give you more than the knowledge that we are not the only ones that have seen or will see changes.
As far as legislation goes, we tend to be in the loop. This policy did catch us unaware. It does apply across the board. I suspect the biggest place they will enforce right now is on new applications. That is a guess, not insider info.
Based on what we were told, this is for pipe tobacco specifically. The reasoning is that many places sell those bags of tobacco that are called pipe tobacco, taxed as pipe tobacco and are not used for anything but rolling. It is not legal to ship rolling tobacco, but it is legal to ship this form of pipe tobacco as a retailer. Apparently, because this form of tobacco appeals to underage smokers, it is more prone to chargebacks. This puts us in a high risk category with special rules. Some of these rules trickle in to us as we keep contact with the credit card company and while Mastercard told us that this was all credit cards, they are most definately the strong arm in this based on our experience.
--more to come--
Thank you so much Jessica... are you still taking orders via phone with a credit card? I need to place an order 
This is very true. Our online business is a decent chunk of what we sell and we have always played by any rules we are aware of. For example, there are states we do not ship to as evidenced above. There are also states that require us to turn in a list of our customers in their state so that they can "follow up" on local taxes. We have a lawyer look through each of those requests and help us determine which we can send a polite "no" to and which we are better off denying customers online sales. It sucks, but we choose not to either hand over customer records or ignore these. We also won't mark tobacco as a gift.
Yes, we were told that we would not be able to use Mastercard in our store front or online at all if we did not follow these new no online pipe tobacco rules.
I can assure you that this came directly from Mastercard.
We did not lose Paypal. We have a current account, but their standard account is not approved for tobacco purchases. We were not aware until following up with the company that was contacted before us that PayPal has instituted a work around since the last time we spoke with them about their policies (feel free to wander through their site, you will see they do not allow tobacco with their public account)
We are working with PayPal to set up what they consider a high risk account that will allow tobacco purchases. There are additional charges and paperwork. I do not know the mechanics of how they are able to accept or what their deals are. I do know that other processing companies are not workable and that we were also turned down by authorize.net for ACH or echeck services for any tobacco sales.
Once we are set up, we will most likely drop Mastercard. Not only did they lead this charge, but they are also requiring a 500 dollar yearly payment for our storefront now and a legal opinion that we are not breaking any rules. In order to use Paypal services, Mastercard also requires and additional 2,000 on top of the otehr charges yearly.
We were using the same gateway online that we use in our store. Our store front sales are still fine. This was not an issue with our processor or an issue with our business practices outside of selling pipe tobacco. There obviously will be a rate raise when we move forward, but there was not a more expensive option given to us that we denied or any other scenario discussed. I may not be happy about paying more, but I would not mislead our customers or publically name someone else when the fault was my own choice.
I will not speak on behalf of any other company. In general, some are already on PayPals high risk system. Some simply have not been noticed yet. I just received the official paperwork from Mastercard and it appears that the date of implementation was August 1. I have not verified this. I can't make you believe anything. All I can do is sign my name and tell you that this is my experience. We paid our bills and chose to go public when an issue arose.
My husband Christian and I own the store. We have kept our employees up to date on the situation. I have answered many questions myself including most of the emails that have come in. I believe the person on this thread spoke with Amanda who is our newest employee, but is aware of the situation and what we are doing.
Ironically, it appears that most of the questions ad discomfort here has occurred because we are being upfront and honest. I know that if we had heard about this when the first company was contacted, we would have already taken precautionary measures behind the scenes and been ready to switch our payment structure as needed. My hope is that other companies won't have the downtime we are because they will be aware of the issue and potential ways to work with the system.
This is not because of the cigarette laws, this is because we will not send Iowa a list of our online customers from their state. If they stop this request, I would love to ship to you! There is always the possibility that a requirement has been dropped and we are not aware. As much as we try to stay on top of things, each state and country seems to change their laws and requirements pretty quickly and we do everything we can to keep up.
I debated answering some of these because I don't want to get into a "he said, she said"
I cannot speak to what anyone else is doing or who has been contacted. I don't know or won't share how anyone else has chosen to handle this. I can share our experience. We choose to share because we have chosen to be in the middle of many fights recently - whether tax related, smoking ban related, or now this. This is our method of handling issues - we shine a light on them and speak out.
I neglect to see our shutting down our credit card system creates any gain for us.
To add to earlier clarification. Mastercard is behind the push - at least as it pertains to us. Putting this information out to our customers was my call (and Christian's). Either of us would be happy to discuss any concerns at any time. 417-886-8380
I hope that by putting this out and contacting the other companies that may be affected in the future we can help make sure the sky doesn't fall.
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