5713 Floor covering stores

Introduction

• What it is: This MCC covers businesses specializing in the retail sale of floor coverings.
• Risk level: Medium — Moderate risk due to potential for product returns and installation issues.
• Acceptance difficulty: Medium — Payment processors may require additional documentation.
• Typical business models: carpet retailers; tile shops; hardwood flooring stores; laminate flooring suppliers.
• For merchants: Expect moderate MDR rates; possible reserves based on sales volume; clear return policies may be required.
• What PSPs expect: Proof of business registration; a detailed inventory list; installation service information if applicable.

Payment Insights & Benchmarks

Merchants in the Floor Covering Stores MCC should anticipate specific challenges related to payment processing, particularly in terms of customer purchase behavior and payment acceptance. Understanding these factors is crucial to effectively managing transaction costs and maintaining cash flow.

Payment methods

Cards: widely accepted, but often subject to higher transaction fees and potential declines based on ticket size.

• E-wallets: gaining traction for convenience, although adoption may vary by demographic and location.
• Financing options: increasingly popular, especially for larger purchases, but may involve additional fees.
• Buy Now, Pay Later (BNPL): appealing for consumers, potentially increasing ticket sizes but with specific processor arrangements.

Authentication & security

Strong Customer Authentication (SCA) is commonly needed, particularly for high-value transactions.

• Implementing 3D Secure (3DS) can aid in reducing fraud but might impact the checkout experience if not managed properly.
• Monitoring customer behaviors, such as return patterns and payment disputes, can safeguard against fraud attempts.

Benchmarks (indicative, not guaranteed)

MDR: typically higher than standard e-commerce, reflecting the average ticket size.

• Rolling reserves: potential for moderate reserves to manage chargebacks and refunds.
• Settlement cycles: often longer (5-10 days) due to higher average transaction values.
• Chargeback ratios: can be elevated due to the nature of high-involvement purchases.
• Card approval rates: generally lower than average; alternative methods may see better acceptance.

Key metrics to monitor

Sales trends by payment method, especially during peak seasons.

• Decline rates and reasons, focusing on high-value transactions.
• Chargebacks analyzed by reason type to identify patterns and sources of disputes.
• Average order value to assess customer purchasing behavior and optimize payments.

Risk & Compliance

Merchants under the MCC 5713, which encompasses floor covering stores, face specific risks linked to chargebacks, fraud, and compliance with AML/KYC regulations. Payment Service Providers (PSPs) and acquirers often implement rigorous monitoring to ensure that merchants mitigate the potential for financial loss and maintain compliance.

Chargebacks & fraud

Common types of fraud include friendly fraud (customers denying they made the purchase) and the use of stolen payment methods.

• Dispute trends might involve customers claiming items were not as described or that they didn't receive their orders.
• Effective mitigation tools include transaction monitoring systems, chargeback alerts, and robust customer service records.

AML/KYC expectations

Merchants are expected to conduct thorough identity verification checks on high-value transactions.

• Sanctions checks must be performed to ensure customers are not on any restricted lists.
• Manual review triggers can include large-quantity purchases, irregular shipping addresses, or first-time buyers with high average cart values.

Operational red flags

Lack of transparency regarding ownership of the business or unclear supply chain practices can raise red flags.

• Merchants should avoid major discrepancies between advertised products and the actual inventory.
• Problems with customer service accessibility may indicate insufficient operational frameworks.
• Issues with returns or refunds not clearly communicated can result in customer disputes and dissatisfaction.

Onboarding Checklist

Merchants operating under the Floor Covering Stores MCC should ensure they compile a thorough onboarding package prior to engaging with PSPs or acquirers. An organized and complete submission significantly enhances the likelihood of approval and accelerates the review process.

Legal & corporate documents

company registration and incorporation documents

• disclosure of beneficial owners (UBO) and corporate structure
• valid licenses for retail sales of floor coverings
• policies: Terms of Service, Privacy, AML/KYC, Refund Policy

Financials & risk management

recent financial statements and cashflow forecasts

• liquidity or reserve model for transactions
• description of antifraud measures and monitoring systems

Product & marketing

demo access or images of the in-store or online shopping platform

• overview of marketing strategies and traffic sources
• geographic targeting information for service areas
• details on customer identification processes (KYC)

Technical integration & security

payment architecture overview, including accepted payment methods

• information on security measures like encryption and tokenization
• PCI DSS compliance status and data storage policies

Operations

customer support structure (operational hours, languages spoken)

• SLA for handling customer inquiries and complaints
• return and refund policy details; limit on transaction sizes
• internal procedures for resolving disputes and chargebacks

Regulation & Licensing

Licensing and certification are important for merchants in the floor covering stores MCC, as they ensure compliance with regional regulations and standards. Recognition of these licenses often varies based on the merchant’s jurisdiction and the specific markets they serve.

Operator licenses

Business licenses — generally required at local or state levels to legally operate a retail store.

• Sales tax permits — necessary for collecting sales tax in compliance with local tax authorities.
• Occupational licenses — may be required in certain areas depending on local regulations governing retail operations.
• Environmental permits — relevant for stores that sell flooring materials that may emit VOCs (volatile organic compounds).
• Some jurisdictions may require additional certifications specific to the types of flooring materials sold, such as fire safety or sustainability certifications.

Geo-restrictions

Retail laws may significantly differ from one state or region to another, affecting how products can be marketed and sold.

• Some areas have strict regulations regarding the sale of specific types of flooring (e.g., certain wood species may be restricted).
• Local zoning laws can impact where flooring stores can operate, restricting them from certain residential areas.

Certifications & audits

Industry certifications (e.g., FloorScore, GREENGUARD) to ensure products meet indoor air quality standards.

• Supplier audits may be required to verify the manufacturing process meets compliance with safety and quality standards.
• Compliance with local health and safety regulations involving occupational health standards and employee safety measures.
• Periodic business audits may be needed to ensure adherence to local business regulations and consumer protection laws.

Official Definitions & Network Comparisons

This section shows how major card networks define this MCC and highlights practical differences that affect merchant onboarding.

Explanation:

While all networks focus on establishments selling floor coverings, the terminology and requirements can differ slightly. Some networks may require additional product documentation or inspections, while others place a greater emphasis on compliance with local regulations. Common issues for merchant acceptance include inadequate documentation and failure to meet specific network guidelines for product offerings.

Alternative MCC Codes

Merchants often confuse this MCC with other categories. The table below shows which codes are related, why they are confused, and what risks misclassification brings.

Rule of thumb for merchants:

If your primary business revolves around floor coverings, ensure you use MCC 5713. Blending your operations with other unrelated product sales can lead to compliance issues and misclassification, which may result in transaction declines and merchant account problems.

Best Practices for Merchants

Merchants operating under MCC 5713, which relates to floor covering stores, must be diligent in managing their payment processes and operational activities to mitigate risk and enhance acceptance rates. The following best practices are essential for maintaining compliance and fostering healthy relationships with payment service providers.

Classification & transparency

always use the correct MCC; improper classification can lead to penalties and account closures

• clearly display relevant business information, such as product types and services offered, on your website
• maintain transparency with customers through clear policies on returns, exchanges, and warranties

Fraud & chargeback reduction

implement 3DS or step-up authentication for transactions with high-value orders or unfamiliar customer behaviors

• use clear billing descriptors that match customer expectations to minimize chargeback scenarios
• log all transaction and customer service events to support any disputes with verifiable evidence

Payment acceptance optimization

facilitate multiple payment methods (credit cards, debit cards, digital wallets) to cater to a broader customer base

• optimize routing strategies by geography to enhance approval rates and decrease declines
• perform A/B testing on different payment service providers to identify the most effective for your customer demographic

Operational discipline

establish KPIs related to transaction approval rates, chargeback ratios, and customer retention metrics

• conduct regular compliance audits to assess the consistency of your operations with internal and industry standards
• designate an internal team or individual to handle dispute resolution, ensuring timely and documented responses

Payouts & liquidity

create financial buffers to accommodate rolling reserves or delayed payouts from payment processors

• integrate automated AML checks for higher-value withdrawals to prevent fraudulent activities
• regularly monitor cash flow and withdrawal patterns to identify and address any irregularities promptly

Business Scope & Examples

This MCC covers businesses that primarily sell floor covering products and related materials. Merchants classified under this category usually provide services or products related to the installation and supply of various types of flooring, including carpets, hardwood, tiles, and other coverings. This sector is focused on both retail and wholesale activities associated with flooring materials.

Models

retail floor covering stores (selling carpet, vinyl, hardwood, tiles)

• wholesale distributors of flooring products
• flooring installation services (including subcontracted installation)
• specialty stores for eco-friendly flooring solutions
• online retailers offering a range of flooring options

Borderline cases

Home improvement stores — while they may sell flooring, they typically also provide a wide range of home improvement products, making them more ambiguous.

• Furniture stores — some might carry rugs or flooring but are primarily focused on furniture; they often do not fit strictly under flooring specialists.

Signals for correct classification

the primary revenue source is directly from selling floor covering products

• products offered include a variety of flooring types (e.g., carpet, tile, laminate)
• the business provides installation services as a core offering