How to get approved for a Diet and Supplement Merchant Account
High risk nutraceuticals merchants can attest to the difficulties involved in obtaining payment processing accounts when dealing in vitamins, supplements, diet, and weight loss products. The industry has a bad reputation for conducting business dishonestly and those who don’t follow the rules are making a bad name for the entire industry.
The supplement business is commonly criticized for its practices and the FTC has been known for laying charges against nutraceuticals businesses more than once. Charges have been doled out for a variety of reasons, including making false claims about the efficacy of weight loss, anti-aging or muscle building products, improperly labeling products, making unsubstantiated health claims, or fraudulently using celebrity endorsements or other false testimonials to help sell more products.
In addition to false advertising, it’s not uncommon to see vitamin and supplement merchants advertising free trials of their product, which are typically followed by monthly membership subscriptions. In many cases, customers are faced with early cancellation fees when they choose not to continue their membership or may find that they’re required to jump through hoops in order to cancel prior to their free trial expiring. This often leads to customers requesting a reversal on the charges and leads to expensive chargebacks for merchants, banks, and payment processors.
Tactics like these are one of the primary reasons that high risk nutraceutical merchants have difficulties in obtaining processing accounts. Additionally, the Food and Drug Administration doesn’t provide regulations for high risk nutraceuticals, which means that vitamins, supplements, diet, and weight loss products aren’t tested for efficacy or label accuracy. Unfortunately for the honest retailers of these products, the scams and tactics used by many merchants in the industry have resulted in a widespread increase in processing fees and account terminations. This leaves many high risk nutraceuticals merchants wondering if they’ll ever be able to obtain a processing account. The good news is that yes, even diet and supplement merchants are able to obtain a high risk account and by following the advice below, there’s a much higher chance of approval.
Disclose Your Policies
It’s important to provide your customers with full disclosure when it comes to your billing practices and policies. Using subscription billing can be risky and often results in excessive chargebacks, so it’s important to provide customers with a simple cancellation method and to clearly outline the terms and conditions at the time of sign up by making sure they’re clearly displayed at the point of purchase as well as in receipts and confirmation emails.
Take Customer Feedback Seriously
Dedicate some time in your regular schedule to reading and responding to customer reviews. If you’re seeing a lot of negativity, take some time to re-think your business model. Negative reviews indicate to payment processors that there’s a problem with your policies, so it’s important to get this under control before you apply for your high risk nutraceuticals account.
Keep Chargeback Ratios Low
One of the easiest ways to reduce your chargebacks is by providing good customer service that goes beyond providing friendly and efficient service. By maintaining honest policies with your customers and offering a reasonable refund policy, customers are less likely to request charge reversals.
Do Your Best to Prevent Fraud
Unfortunately, fraud affects almost all merchants at one point or another, but by making use of fraud prevention tools and training employees on fraud detection, you’ll be able to prevent most occurrences. Payment processors often consider your fraud prevention methods when determining your eligibility for a high risk account, so it’s important to make sure you’re being proactive.
Be Transparent and Comply with FTA Regulations
While it can be tempting to advertise your product as a “magic potion” of sorts, it’s vital that you comply with all labeling and advertising regulations. Make sure you’re aware of the ingredients of your products and honest with your customers about the benefit. By following all the rules that are in place for your industry, you can highly increase the chances of getting approved for a high risk diet and supplement merchant account.
Apply for a High Risk Nutraceuticals Account
At PayDiverse, we understand the inner workings of the supplement industry and have worked hard to provide an appealing range of benefits to diet and supplement merchants that provide secure processing, chargeback protection, and fraud prevention. Complete our secure online application and begin processing payments and take advantage of all the benefits of a PayDiverse account.
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Fill out our free and quick merchant account application and let us match you with many banks that want your business.