Payment processors review and shut down supplement and nutraceutical merchant accounts when they start to see any kind of pattern that looks risky. For example, rising chargebacks, aggressive claims on the merchant website, or sudden spikes in the volume from new funnels or new countries.
If we look at it from their side of the table, your business is not just a brand and a product; it’s basically a stream of potential disputes, regulatory attention, and reputational risk that has to be managed by the payment service provider before it becomes a bigger problem and that is why nutraceuticals are almost always considered high risk by payment service providers.
Historically, in this industry, we have seen higher-than-average chargebacks. A lot of subscriptions of free trial offers also create problems, and sometimes a few merchants make very bold health promises, and we all know that regulators do not like it.
Even if you are doing a completely legitimate business and you care about your customers, in reality, you still inherit that history. So your goal as a merchant should be to make it painfully obvious for any underwriter that you are one of the most responsible merchants.
Behind the scenes, the risk team is always watching on your account in real time. They monitor specific factors that may trigger an account review. If your chargeback ratio starts moving towards or goes above 1%, or if you suddenly start getting a wave of product not as described or “I don’t recognize this subscription” kind of dispute, then it is pretty natural that they will dig in because that is exactly the pattern that gets the payment processors in trouble with their acquiring banks.
They will also get nervous when your processing volume doubles overnight or when your average ticket size jumps because you launched a high-ticket bundle. They may also get nervous when your traffic suddenly moves to a new country that was never mentioned in the original merchant account application that you submitted. In short, any major change in your numbers that you haven’t warned or updated them about can seem like a change in your business model that they never agreed to underwrite.
The website on which you sell your product or the sales funnel that you use can also be a big trigger point, especially in industries like herbal supplements. Most of the merchants see a landing page as a place to maximize conversion. However, underwriters actually see that landing page as a document, and they will keep a screenshot of it and add it to your file. So, before making any critical changes to your site or landing page, always remember that the underwriters may say that it goes against initially approved terms.
Missing policy pages or contact info on your site can lead to refunds and chargebacks. On top of that, PCI DSS version 4.0 rolls out, and now, payment processors also care about the technical side of your checkout system. They look at script integrity, proper encryption, and basic security hygiene as well.
The best way to stay away from the review radar, is to build your operations in a way a risk manager wishes every nutraceutical and supplement brand to do. You should start working with the basics. Work with a payment service provider that openly supports high-risk categories and is absolutely comfortable with supplement, continuity billing, and subscription models. Avoid submitting your application to a low-risk fintech company that dislikes this type of business vertical.
You should also make your site look serious and reachable. It is important to know that good supplement brands have clear policies. They display full product information with labels and ingredients. Always avoid words like “supports,” “cures,” or “remedy.” You should design your offers so that there are absolutely no surprises for the customers.
Trials and subscriptions should be clearly explained on the website. You should also give proper information to the customer about renewal dates, and it should be communicated via email, and they should get the ability to cancel it in a simple way. Internally, you must watch your chargeback and refund percentage on a weekly basis, and you should be ready to pause a campaign, fix your ad copy, or also adjust your customer service scripts when you see that there are sudden spikes.
Just in case you end up under a review, you should treat it like a professional audit rather than a personal attack. You should respond quickly to requests for documents, and then you should send full bank statements, labels, lab tests, and marketing creatives, whichever is asked for by the underwriting team.
You should proactively explain everything in your metrics that looks bad. Try to include what you have already changed to fix it. At the same time, you should start cleaning up your site and funnel so that when the risk team checks it again, they see a merchant who truly understands the compliance and is willing to evolve and is not someone fighting for the right to keep using grey tactics.
You should also have a backup high-risk merchant account provider lined up. It is a smart move and can be considered as insurance for the proper operations of your business while the first account is under review.
The the supplement brands that survive and scale are the ones that truly treat compliance and transparency as a part of their marketing strategy and not just as a checkbox.
Feel free to ask any questions if you have any.