Things to Know About Nutraceutical Payment Processing

April 13, 2021

Few sectors have such a strong influence on the population of the United States as the nutraceutical industry. However, retailer accounts for accepting credit cards are also a concern for nutraceutical companies.

Even though over 75% of adult Americans take a dietary supplement, this is the case. According to forecasts, the health and wellbeing supplement market will continue to expand at a steady rate.

So, why are nutraceutical companies labeled as high-risk merchant services customers?

Why is the Nutraceutical industry seen as a high risk for merchant accounts that accept credit cards?

Payment processors often view the nutraceutical industry as high risk for several reasons. Many of the challenges facing the nutraceutical industry have a shared thread.

Both of them result in chargebacks and brand loss. There are many reasons why nutraceutical merchant accounts are high risk, ranging from a lack of oversight to brand loss and liability.

Nutraceutical Categories

• Supplements for the diet
• Supplements for energy
• Medications based on botanical ingredients
• Vitamins and minerals
• Detoxification services
• Supplements made from herbs
• Cognitive enhancers, for example, are nootropics
• Supplements for weight loss
• Supplements for exercise and athletic results

Nutraceutical Ingredients and Products Can Be Classified as High Risk

Illegal, adulterated, or mislabeled additives are another consideration that can lead to high chargeback rates, brand loss, or liability to the payment processor or bank.

Supplements are sometimes discovered to have less of a promised product than marketed. When customers do not see a profit, they often chargeback their purchase instead of calling the business.

Illegal additives are often a source of contention in the industry. Some foods are legal in one country but not in another. Many nutraceutical firms are shocked to hear that their ingredients are illegal or theoretically illegal in the United States. 

Merchants must demonstrate that they recognize and adhere to the countries’ rules market to which they intend to ship. When they lack this information, shipments are often intercepted or returned, resulting in chargebacks.

Nutraceutical merchants also unknowingly have illicit drugs. Alzheimer’s therapies, Covid-19 test kits, and unapproved treatments, anabolic steroids, and so on are but a few instances.

This may arise because their dealers or sales agents misrepresent the goods to the merchant as authentic. As a result, the websites of nutraceutical and supplement merchants must be constantly monitored.  

This aids in ensuring that their product offerings adhere to the standards. Banks that fund nutraceutical merchant accounts that market illicit ingredients or goods can be found responsible once more. Most credit card processors are unable to commit staff to continuous platform surveillance.

Liability Resulting from Fraudulent Nutraceutical Representations

Any merchant is in the business of selling their goods or services. Giving statements on what a supplement can do, regardless of personal values, is unconstitutional.

That is unless it is well-documented and government-approved. The FDA is in charge of keeping an eye on businesses that make deceptive or misleading statements. On the other hand, banks or payment providers can be left responsible for the merchant’s support.

As a result, the risk department shall closely examine nutraceutical merchant accounts for exaggerated or false statements. Once again, many credit card processors lack the requisite experience to evaluate this risk better.

How to Apply for a High-Risk Nutraceutical Merchant Account?

For your business plan, we will give you the best nutraceutical merchant account. Just contact us to get started, and we will help you find the perfect solution for your business.

We will give you the required application after reviewing your website, product, and business model. You will be supported by one of our kind advisors in operation.

Following the checklists is one of the most important tasks you will do when putting together your application kit. Ensure that the paperwork is correctly filled out, that all indicated spots are signed, and that all submitted documentation is returned in a single envelope.

This will assist in the simple acceptance of a nutraceutical merchant account. Of course, the large team will be there to assist you in completing the kit before sending it to the bank.

Underwriting Nutraceutical Merchant Accounts

Underwriters analyze the application file to calculate the probability of handling payments for nutraceutical merchants. The more detail you can have to show your business in the best way possible, the better.

You will be allocated a dedicated Nutraceutical merchant account expert to help you with the application process. The target is for you to get approved quickly and at the lowest possible cost.

The goods being sold are the first thing the underwriting committee looks at. Ingredients are tested to ensure that they are all legal to sell in the countries where they are offered. Certain ingredients may be available in some countries but not in others.

After the product ingredients have been approved, websites and marketing documents are scrutinized to ensure no unproven statements regarding the market.

This is important after several nutraceutical firms were forced to shutter after federal officials found fraudulent and deceptive product ads. As a contingency, underwriters regularly certify that nutraceutical merchants follow all laws and regulations and practice lawfully.

As part of the underwriting process, the processing history is checked. It’s perfect if chargebacks are tiny. When they are higher, explain why and what steps are being taken to get them under control.

Naturally, ensure that you have sufficient working resources in your bank account to support the processing volumes demanded. This ensures the underwriting committee that you have sufficient funds to manage the company to offset any chargeback costs associated with your nutraceutical merchant account.