Why Selling Nutraceutical Products Makes Banks Nervous

Why Selling Nutraceutical Products Makes Banks Nervous

When Instabill representatives are approached about a nutraceutical merchant account, we don’t mince words. Selling nutraceutical products can be a slippery slope, which is why we’re straightforward with banking guidelines and protocol.

Nutraceutical businesses can be very profitable. But, understandably, they make acquiring banks uneasy.

One major issue we find with nutraceutical merchants

Products that do not fall within the nutraceutical category are often mistaken for those that do.

That is the prevalent misunderstanding among nutraceutical merchants, which can result in a merchant account rejection or an established account shut-down by a bank. Our merchant account managers often receive calls from nutraceutical merchants who want to sell CBD products, Kratom or even Viagra. After all, they’re supplements, are they not?

It’s a common misconception: Just because a product may be all natural or a vitamin supplement doesn’t mean it falls under the nutraceutical category. We don’t know of any banks – domestic or international – that offer payment processing for nutraceutical merchants who wish to sell CBD or kratom. It is vitally important to know that each maintains its own category.

5 things impacting a merchant account approval and rejection

Functioning website: Without a functioning website for selling nutraceutical products, a merchant’s chances for obtaining a nutraceutical merchant account are slim to none. Nutra merchants need to be 100 percent transparent about their business, which plays into our next point.

List of ingredients: Regarding our emphasis on transparency, acquiring banks need to know precisely the ingredients a nutraceutical merchant is offering. Listing them on your website is a must.

“Some nutraceutical merchants tend to think that anything natural is considered a nutraceutical product,” said Instabill Sales Manager Wendy Jacques. “It is really the ingredients in the products that make the difference.”

Offering new products: When adding new products and supplements to your menu of offerings, inform your acquiring bank. When selling nutraceutical products, we understand that merchants want to occasionally add new products and trial new supplements to drive more sales. Alas, the banking partner needs to be notified.

Transaction laundering concerns: In recent years, we’ve found an alarming number of nutraceutical websites that are mere fronts for ‘businesses’ that are selling illegal narcotics: drugs, steroids and other illicit products. All banks and payment processors are wary of this.

Free trial offers: Since Visa halved its tolerance for chargebacks in January 2016, we’re seeing less frequency of free trials with payment information. Though free trials are an effective marketing tactic, they can be invitation to a high chargeback rate. For example, a consumer forgets he authorized his/her credit card for payment once a 30-day free trial runs out, continues to receive the product for weeks after, then files a chargeback.

Consistent communication between merchant and consumer is the key to avoiding chargebacks when offering free trials. Merchants are urged to notify the consumer several times by e-mail (or telephone) near the end of the free trial.

Selling nutraceutical products with Instabill

Instabill has long been the consummate payments resource for merchants to get nutraceutical merchant account approvals. A merchant account through Instabill means:

  • Domestic or offshore merchant accounts
  • Solutions for established nutraceutical merchants and startups
  • High volume solutions
  • Recurring billing options
  • The best customer support

Apporovals are a phone call away: 1-800-530-2444.

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