Many websites that operate in the wellness and supplement industries generally wonder why their merchant account applications get declined by traditional payment processors.
The reality is that acquiring banks and payment processors view these verticals as high risk and here are some of the reasons behind the same.
The first one is regulatory concerns. Supplements, vitamins, and beauty products generally fall into the grey area where even a simple health-related claim can raise red flags.
Another challenge is the high chargeback ratio. When you sell products like sleep aids, hair tonics, or skin care solutions, these are all highly subjective. Customers who don’t see immediate results generally file disputes that pushes the ratio of chargeback beyond acceptable threshold.
And one of the most critical challenges which generally merchants ignore is the mixed product categories. When you combine consumables such as coffee, supplements with topical beauty products, all this increases the exposure since these categories have historically attracted high regulatory scrutiny and elevated return ratio.
So, the takeaway is that even if a brand looks very polished, banks will assess the risk exposure, not the packaging only. That’s why supplements and nutraceutical merchants generally require specialized high-risk merchant accounts which can operate smoothly.