Nutraceutical Merchant Account
General
Nutraceuticals are defined as food products or dietary supplements that provide additional health benefits beyond those that would be obtained from a normal diet. Consumers are embracing holistic and natural forms of healthcare, which has led to explosive growth in vitamins, supplements and other products that are intended to improve an individual’s health. The definition of nutraceuticals also includes vitamins, minerals, creams, functional foods, dietary products, and dietary programs.
The FDA regulates nutraceuticals due to their potential health benefits. The FDA ensures that nutraceuticals are safe and effective by regulating their production, labeling, and marketing. Due to the FDA’s strict labeling, advertising and ingredient requirements, and the potential for violations, nutraceutical businesses are considered high-risk by many conventional payment processors.
Fortunately, HRMPay has the solutions for securing a merchant account for your nutraceutical business. Simply fill out our quick form and a member of our Team will reach out to you to complete your application.
Why Are Nutraceutical Businesses Considered High-Risk?
The nutraceutical industry is considered a high-risk industry for four main reasons.
1. Potential False Claims: Due to the ingredients and the possibility that their effects are not substantiated by the FDA, FTC, or other regulatory organizations.
2. Free Trials: Free trials may result in unwanted recurring credit card subscriptions when the free period is over.
3. Regulations: Lack of understanding around the regulations and restrictions of nutraceutical products in different regions and countries.
4. Chargebacks: Nutraceutical business have a higher risk of chargebacks.
Potential False Claims
Nutraceuticals are not tested or approved by the FDA. If a consumer does not receive the results or health claim benefits that are advertised for the product, the customer could potentially initiate a chargeback. Regulatory compliance regarding health claim and advertising statements creates additional exposure for nutraceutical companies and their payment processor.
Free Trials
Many nutraceutical businesses use trial-based or free-trial products to obtain customers. The use of a free-trial model can result in higher chargebacks and the merchant being designated as high-risk. Customers will often sign up for a free trial of a product, agreeing to have their credit card charged later once their trial expires. Once the free trial lapses, customers will sometimes forget to cancel prior to the charge date and try to avoid payment by initiating a chargeback with their credit card issuer.
Regulations
Merchants must also clearly list all product ingredients and abide by FTC and FDA regulations regarding labeling, production, and marketing of their products.
Many areas of the nutraceutical sector are largely unregulated, however, there are some legal guidelines required to enter the industry. They are:
• Classification: Nutraceutical products must be properly classified. They must adhere to all restrictions within the classifications that were created by the FD&C Act.
• Good Manufacturing: Although they are not directly regulated by the FDA, nutraceutical companies are required to create their own standards and guidelines for all areas of the industry.
• Notifications: Nutraceutical companies are required to submit notifications for supplements that contain new ingredients.
• Preventive and Corrective Action: Nutraceutical companies are also required to create a plan to prevent, correct, and address instances of non-compliance.
• Labeling: Not only must the products state what their intended uses are and all beneficial ingredients, it must also include any ingredients that may not be beneficial or that may adversely affect those who take the product.
• Traceability: Nutraceutical products must also include some sort of unique identifier on the packaging to make them easy to trace.
• Recording: Manufacturers must also create and maintain detailed records of all processes and production systems implemented.
Risk of Chargebacks
Acquiring banks and payment processors underwrite merchant accounts based on risk. The unpredictable nature of nutraceutical products and nutraceutical legislation result in banks viewing your business as high-risk.
Operating in the eCommerce space, in general, means that you run the risk of chargebacks. eCommerce is already considered high- risk because customers can easily dispute transactions with their issuing bank when unhappy with a purchase or forgot that they made an online purchase. This, added with the misconceptions surrounding nutraceutical products, means that your business is considered high- risk for banks. HRMPay, however, has solutions for you to obtain a nutraceutical Merchant Account.
Chargeback Protection
Our multi-bank processing capabilities help high-risk merchants prevent high chargeback ratios, but we also work hard to help our nutraceutical merchants protect their bottom line by preventing unnecessary chargebacks. HRMPay provides merchants with technology designed to identify vulnerabilities within their system to limit instances of unjustified chargebacks.
Some of the ways nutraceutical merchants can prevent fraudulent chargebacks on their own include:
• For brick-and-mortar retail locations, train employees to ask for photo identification with all credit card transactions and have them double check that the name is the same on both cards.
• For brick-and-mortar retail locations, utilize time-stamped video surveillance for the cash register area. Be sure that the video captures the customers’ faces. This can be used to cross-reference with the time stamp on the credit card transaction and provided as additional evidence in disputing chargebacks
• Retain all credit and debit card receipts. File them with care and keep them easily accessible in case a chargeback is initiated, and proof of the transaction is required.
• Never process any transaction that is suspected of being fraudulent without confirming the information with both the customer and card-issuer.
Keeping Nutraceutical Merchant Accounts in Good Standing
As a new industry, it is important that nutraceutical merchants maintain their accounts with banks and credit card processors. Building good histories will increase the likelihood that banks eventually see nutraceutical products merchants as a legitimate and viable business that they are willing to work with. Some things merchants can do to keep their accounts in good standing include:
• Maintain a good history with credit card processors
• Consistently perform a high sales volume
• Keep a high balance in business accounts
• Dispute chargebacks whenever possible and back up disputes with strong evidence
• Remain transparent in all communications with your banks and payment processor
Adhering to these standards is something any business should strive for, however, for a high-risk industry, it is more important than ever. In addition to creating a better name for the industry, merchants who keep their accounts in good standing increase the chances of raising their sales potential and processing limits.
Nutraceutical Products HRMPay Supports
HRMPay supports businesses selling nutraceutical products and operating in locations where nutraceutical products are legal. Supported products include:
• Dietary Supplements
• Dietary Fiber
• Probiotics
• Herbs
• Minerals
• Vitamins
• Essential oils
• Medical Foods
• Farmaceuticals
• Cosmeceuticals
• Weight Loss Supplements
• Diet Programs
• Sports Enhancing Supplements
• Botanical, Herbal and Plant-Based Products
• Pain Management
• Meal Replacement Shakes and Snacks
• Male Enhancement Supplements
• Cognitive Enhancers
• Hair Treatment & Growth Products
• Anti-Aging Treatments
• Detox Kits/Colon Cleanse Supplements
• Antioxidant Defense
• Glucosamine HCl
• Hyaluronic Acids
• Carotenoids
• Prebiotic and Probiotic Supplements
• CBD Nutra Products
Nutraceutical Credit Card Processing Rates & Fees
Choose a nutraceutical merchant processor who understands your business needs, industry-specific aspects, and budget. As a high-risk merchant, you’ll likely be faced with higher fees than low-risk merchants. While fees shouldn’t be the only reason you decide to work with a merchant services provider, they should be considered since it will determine how much money your business pays to process credit cards. The rate will be determined once your merchant account is approved.The exact credit card processing rate you can expect for your nutraceutical business depends on several factors, including your business’s level of risk and whether you sell your products online or in person. HRMPay will review your application and assess these factors. Rates for nutraceutical payment processing typically range from 2.85% to 5.5%. There could be other credit card processing fees like monthly fees, interchange fees, and related merchant account fees. That said, we offer competitive rates and transparent pricing with no hidden fees or long-term contracts.
What Documentation Is Required to Obtain a Nutraceutical Merchant Account?
1. Color Copy of Driver’s License or Government Issued Photo ID2. Document showing Proof of Company Registration (Sole Proprietorship, LLC, ETC)3. Voided Check/Bank Letter4. 3 Months Bank Statements 5. 3 Months Processing Statements (if available)6. EIN Letter7. Articles of Incorporation8. Fulfillment Agreement (if applicable)9. List of suppliers for nutraceutical products10. Lab Results / Certificates of Analysis for products sold on website11. Website 1. URL/Website must have Age Verification and FDA warnings2. Website must have legal company name and address listed on footer of landing page; terms & conditions page; privacy page; refund/return policy; shipping policy; contact page with customer service number and card brand logos on the checkout page.
Nutraceutical Merchant Account Types that HRMPay Supports.
HRMPay offers the following solutions for nutraceutical merchant accounts:
• Nutraceutical Retail: Solutions that are best suited for traditional brick and mortar retail settings with reliable internet. A retail nutraceutical merchant account allows you to accept credit/debit transactions in-person or card-present.
• Nutraceutical eCommerce: Solutions for nutraceutical products and accessories. For eCommerce nutraceutical merchants, our state-of-the-art payment gateways provide you with everything you need to accept online payments securely.
• Nutraceutical Payment Gateways: HRMPay offers a multitude of gateway options for our merchants. Whether you are a high-volume eCommerce merchant or a newer merchant, we have the best solutions for those merchants who make most sales via eCommerce.
• Nutraceutical MOTO (Mail Order/Telephone): With a virtual terminal, you can accept payment details from your customers via phone and email. Our virtual terminals’ have an easy-to-use interface which makes it easier than ever to accept card-not-present payments.
• Nutraceutical Mobile: Mobile nutraceutical merchant accounts allow businesses to accept in-person payments via your cellphone. These solutions are perfect for selling at special events/conventions. Nutraceutical mobile merchant accounts are typically priced similarly to retail accounts as the chargebacks/fraud are usually relatively low.
Why Open a Nutraceutical Merchant Account with HRMPay?
1. To Accept Credit Cards: If you operate either in a brick-and-mortar retail location or an online website, you’ll need to be able to accept major credit cards to maintain a successful business. 2. Payment Gateway and Platform Integration: Our payment gateway integration into many of the popular website platforms, including Shopify, WooCommerce, Magento, and WordPress. This means that you won’t have to switch your platforms after spending long hours and tons of money developing the perfect website. 3. Customer Service: Our Customer Service Team understands the nutraceutical industry and how to keep you processing efficiently and effectively. HRMPay provides you with the option to accept credit card payments for your nutraceutical business either in your retail location or on your website, giving you the best opportunity for success. When you partner with HRMPay, you also partner with a large network of payment solutions providers. We offer outstanding fraud and chargeback protection, as well as exceptional customer support. We have strong relationships with many of the largest acquiring banks who work with high-risk merchants both in the United States and offshore.We utilize a variety of processing techniques to ensure that nutraceutical merchant processing is a smooth and simple process for our high-risk accounts. Some of the features of your nutraceutical merchant account include:• Multiple payment processing relationships to assure placement of your merchant account• 24–48-hour settlement to merchants• Secure payment gateways• Chargeback alerts• Chargeback disputes• Fraud prevention and protection tools• Competitive processing rates • Quick approval of your merchant accountIn addition to providing outstanding customer service, HRMPay supports integrations directly into the software, systems, and tools you already utilize within your operations. We maintain a variety of partnerships with industry-leading payment gateways and payment platforms to include:• Authorize.net• NMI• USAePay • WooCommerce• Magento• WordPress• Shopify• BigCommerceWe can integrate with the most popular platforms to help you successfully sell your nutraceutical products.Once HRMPay has your merchant account boarded, you will be ready to transact your nutraceutical transactions promptly, effortlessly, and conveniently!Sign up today! quick form