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Furniture and Home Furnishing Businesses
The furniture and home furnishing industry has undergone a transformation in recent years, with technology and consumer preferences driving much of the change. One of the most significant shifts has been the rise of online marketplaces. Major platforms such as Amazon, Wayfair, and Etsy have become dominant forces, reshaping how consumers browse and purchase everything from luxury sectional sofas to handmade artisan décor. These platforms offer convenience and a wide range of choices, making it easier than ever for people to find exactly what they need for their homes without leaving the comfort of their couch.
While brick-and-mortar stores remain crucial, particularly for consumers who want to experience the feel and quality of furniture in person, online sales now play an increasingly significant role in the industry. The global furniture market is expected to reach over $500 billion by 2025, with a growing portion of that driven by eCommerce. This growth is fueled by consumer demand for more affordable, customizable, and sustainable home furnishings. Verticals within the industry range from large-scale furniture manufacturers to small independent designers, home décor brands, lighting suppliers, and even companies offering smart home furnishing solutions.
Despite the opportunities, this growth brings challenges, particularly around payment processing. Furniture and home furnishing businesses must navigate an array of complex requirements and risks that come with accepting payments online and in-store.
What is a Furniture and Home Furnishing Merchant Account?
A merchant account for a furniture and home furnishing business is a type of business bank account that allows companies to accept electronic payments, specifically credit card payments, from their customers. On the surface, this may seem like a standard merchant account—similar to what a coffee shop or clothing store might use—but there are key distinctions. Furniture and home furnishing businesses, whether they operate primarily online, in-store, or both, deal with different transaction types and higher average purchase values. These factors make them stand out in the payment processing world.
One of the most significant differences is the high-ticket size of the average transaction in the furniture industry. Unlike lower-value purchases, furniture sales often involve large sums of money, sometimes running into the thousands of dollars for a single transaction. Additionally, many furniture items are custom-made or involve long lead times for delivery, adding complexity to the payment process. For example, a customer might order a custom-built sofa, but it could take 8-12 weeks to manufacture and deliver. During that waiting period, there is an increased risk that the customer might dispute the charge, either because of delays, dissatisfaction, or simply a change of heart.
These extended delivery times and high average ticket sizes introduce unique risks that standard merchant accounts are not always equipped to handle. As a result, many furniture and home furnishing businesses require high-risk merchant accounts, which are tailored to industries that have elevated levels of risk for chargebacks, fraud, and transaction disputes.
Why are Furniture and Home Furnishing Businesses Considered High-Risk?
When a bank or payment processor classifies a business as “high-risk,” it’s not a reflection on the business’s quality or reputation. Instead, it’s a label used to describe the increased risk of financial loss that the payment processor takes on when handling the business’s transactions. For furniture and home furnishing businesses, several factors contribute to this high-risk classification:
High Average Transaction Size: As mentioned earlier, furniture sales typically involve larger sums of money compared to other industries. The higher the transaction amount, the greater the potential for chargebacks and fraud. A $3,000 furniture order presents a more significant financial risk than a $30 t-shirt purchase.
Extended Delivery Times: Furniture items often have longer delivery windows due to factors such as custom orders, shipping logistics, or backorders. These long wait times can frustrate customers and lead to chargebacks or disputes if a customer feels they aren’t receiving their goods promptly.
Chargeback Risk: A chargeback occurs when a customer disputes a charge and requests their credit card provider to reverse the transaction. Because furniture purchases are often high-value and can involve months of waiting, customers may be more likely to file chargebacks if they feel dissatisfied with the product or the delivery process. Too many chargebacks can cause problems for any business, but they are particularly problematic for high-risk industries.
Industry Fraud Risk: Furniture and home furnishings are valuable, making them a target for fraudulent activity. Online fraud, in particular, is a growing concern for furniture retailers, with cybercriminals exploiting vulnerabilities in online payment systems to make unauthorized purchases. For payment processors, the risk of fraud further complicates the approval process for merchant accounts in this sector.
These factors combined mean that banks and payment processors approach furniture and home furnishing businesses with caution. Many traditional payment providers may hesitate to work with high-risk industries or may charge higher fees to offset the perceived risk.
Point of Sale (POS) Systems for Retail Furniture Stores
For furniture retailers operating physical stores, having an efficient and reliable Point of Sale (POS) system is essential. A modern POS system not only processes payments but also integrates inventory management, customer relationship tools, and sales reporting, all of which are crucial for the smooth operation of a retail furniture business.
Furniture businesses often deal with complex transactions, such as large orders, customizations, and split payments. A high-quality POS system should handle these challenges while also providing flexibility for different payment types, including credit cards, debit cards, and mobile wallets. Additionally, POS systems can support various financing options, which are often critical for large-ticket furniture purchases.
At Durango Merchant Services, we help furniture retailers implement POS systems that are optimized for their unique needs. Our payment processing solutions integrate seamlessly with industry-leading POS systems, ensuring smooth and efficient operations for in-store transactions.
Virtual Terminals for Online Sales
For furniture businesses that operate online or offer phone and mail orders, virtual terminals are an essential tool. A virtual terminal allows businesses to process credit card payments without needing a physical card present. This is particularly useful for custom orders, large-ticket items, or when taking payments over the phone.
Virtual terminals provide a secure way to handle online sales and remote transactions. They are web-based, so you can access them from any computer or device, making them a flexible option for businesses that need to process payments outside of traditional in-store setups.
Virtual terminals are particularly valuable for high-ticket transactions common in the furniture industry. They allow for manual entry of customer payment information and can integrate with online payment gateways to create a smooth transaction experience. With a reliable virtual terminal in place, businesses can process payments efficiently while reducing the risk of fraud and chargebacks.
Can Furniture and Home Furnishing Companies Use Stripe, PayPal, and Square?
Yes, furniture and home furnishing companies can technically use aggregate services like Stripe, PayPal, and Square for payment processing. These platforms are designed for ease of use and are popular among small businesses and startups due to their quick setup and low entry barriers. However, there are some important limitations to consider.
Aggregate services function by pooling multiple businesses under a single merchant account, meaning individual businesses don’t have their own dedicated merchant accounts. While this can be convenient for smaller transactions, it becomes problematic for businesses like furniture companies that process large transactions or have extended delivery times.
Transaction Limits: Aggregate platforms may impose limits on transaction sizes or monthly processing volumes. For a furniture business, this could restrict operations or trigger flags if the business exceeds these limits frequently.
Chargeback Sensitivity: Platforms like PayPal and Stripe are particularly sensitive to chargebacks. If a furniture company experiences a high rate of chargebacks (which is common in this industry), the platform might freeze their funds or even terminate the account entirely.
Account Holds and Freezes: Because furniture purchases involve larger sums and potential delays in delivery, aggregate platforms may place holds on funds to mitigate their risk. This can cause cash flow problems for businesses relying on prompt access to payment proceeds.
For these reasons, many furniture and home furnishing companies opt for dedicated merchant accounts that offer more flexibility and are better equipped to handle the unique challenges of the industry.
How to Get a Merchant Account for Your Furniture and Home Furnishing Business
Securing a merchant account tailored to the needs of a furniture business is critical for processing payments reliably and efficiently. At Durango Merchant Services, we specialize in helping high-risk businesses, including those in the furniture and home furnishing industry, secure merchant accounts that accommodate larger transaction sizes, chargeback risks, and delivery timelines.
The process generally involves:
Application Submission: Businesses submit an application with information about their sales volume, average ticket size, and business model.
Underwriting Review: Payment processors evaluate the potential risk involved in working with the business, including factors like transaction history and chargeback rates.
Approval and Setup: Once approved, Durango Merchant Services works with businesses to set up their payment gateway, POS system, or virtual terminal, ensuring that they can start accepting payments quickly and securely.
What do I Need to Apply for a Streaming Service Merchant Account
1. Prepare Your Business Information
To streamline the application process, have the following information ready:
- Business Name and Legal Entity: Include your business name, DBA (Doing Business As) if applicable, and business structure (LLC, Corporation, Sole Proprietorship, etc.).
- EIN/Tax ID Number: Provide your Employer Identification Number or Tax ID for your business.
- Business Address and Contact Information: Include the physical or mailing address of your business as well as contact numbers and email.
- Website Information: If you have a website, make sure it’s fully operational and includes clear return policies, shipping terms, and customer service contact information.
- Bank Account Information: Have your business bank account details ready for linking to the merchant account.
- Projected Sales Volume: Estimate your monthly sales volume, the average size of your transactions, and the percentage of sales that are likely to come from online, in-store, or both.
- Chargeback History: If applicable, be prepared to discuss your chargeback ratio and any steps you’ve taken to manage or reduce it.
2. Submit the Merchant Account Application
Once you’ve selected a payment processor like Durango Merchant Services, you’ll need to submit your merchant account application. This will involve:
- Completing the online application form with your business information.
- Providing supporting documents such as your business license, financial statements, and potentially identification documents for the business owner(s).
- Providing information on the types of products or services you sell, pricing structures, and return policies.
3. Underwriting Process
After submitting your application, the payment processor’s underwriting team will review your business for risk factors. They will evaluate:
- Transaction Size and Frequency: Larger transactions and a higher frequency of orders can affect risk levels.
- Business Model: The processor will assess whether your sales model (online, in-store, custom orders, etc.) aligns with their risk criteria.
- Chargeback History: The underwriting team will analyze any history of chargebacks and the policies you have in place to prevent future issues.
This process may take anywhere from a few days to a week, depending on the complexity of your application and the processor’s risk assessment procedures.
4. Receive Approval
If your business meets the processor’s criteria, you’ll be approved for a furniture and home furnishing merchant account. Once approved, the payment processor will help you set up:
- Payment Gateway: If you sell online, this allows you to accept credit card payments securely on your website.
- Point of Sale (POS) System: For brick-and-mortar stores, a POS system enables you to accept credit card payments in person.
- Fraud Prevention Tools: Many processors offer fraud protection features to help mitigate the risk of fraudulent transactions.
- Chargeback Management Solutions: Implement solutions to help manage and reduce chargebacks, including dispute resolution tools and proactive customer communication strategies.
How Does Durango Help with Credit Card Processing for Furniture and Home Furnishing Companies?
Durango Merchant Services plays a crucial role in helping furniture and home furnishing companies navigate the challenges of credit card processing. These businesses often face difficulties due to the high transaction values, long delivery windows, and elevated risk of chargebacks, which can make traditional payment processors hesitant to work with them. Durango specializes in providing high-risk merchant accounts tailored to the furniture industry, ensuring that companies can process large transactions securely and efficiently. By working with a network of banks experienced in high-risk industries, Durango offers competitive rates and reliable solutions designed to accommodate the unique needs of furniture retailers and eCommerce platforms alike.
In addition to setting up merchant accounts, Durango provides comprehensive tools for chargeback management and fraud prevention. Furniture businesses frequently deal with long lead times between purchase and delivery, increasing the potential for disputes and chargebacks. Durango’s fraud detection systems, early warning alerts for chargebacks, and customer communication strategies help minimize these risks. Whether it’s a large in-store purchase processed through a point of sale (POS) system or an online order handled through a virtual terminal, Durango ensures that every transaction is handled securely and smoothly.
Furniture and home furnishing companies also benefit from Durango’s support for eCommerce payment gateways and virtual terminals, which allow businesses to process transactions from anywhere, whether online or over the phone. These solutions provide flexibility for businesses with both physical and online sales channels. Durango’s payment processing systems integrate seamlessly with existing POS systems, allowing businesses to streamline their operations and focus on growth while minimizing payment-related risks. From fraud prevention to reliable payment processing, Durango offers everything a furniture business needs to thrive in today’s competitive market.
Credit Card Processing for Furniture and Home Furnishing Stores
Reliable and secure credit card processing for furniture and home furnishing companies is essential for running a successful business in today’s competitive marketplace. Durango Merchant Services provides solutions tailored specifically to this industry, helping businesses manage high-value transactions, prevent chargebacks, and ensure seamless integration between in-store POS systems and online virtual terminals.
Our solutions are designed to reduce the risk of fraud, streamline the checkout process, and provide businesses with the tools they need to thrive—whether they’re operating online, in-store, or a combination of both.
