How to Address the Very Real Threats To Your Immunity Supplements Merchant Account - DirectPayNet

How to Address the Very Real Threats To Your Immunity Supplements Merchant Account


There’s no mistake about it. Merchants selling supplements that boost the immune system have enjoyed a boom in sales during the early 2020s. With COVID-enforced shutdowns, this high-risk industry has been enjoying record success. These elevated revenues are also set to continue long after the pandemic is over, with so many more customers conscious of their immune response to the coronavirus and other airborne diseases.

But it’s not plain sailing for high-risk merchants in this space. Many health supplements are being missold. The food and drug administration (FDA) and the Federal Trade Commission (FTC) are cracking down on misleading claims about the efficacy of nutraceutical products in this space.

Worse, some customers taking immune support supplements marketed as COVID-beaters are contracting and suffering severe coronavirus symptoms. This is causing a spike in chargebacks. As a result, many merchant service providers are severing ties with nutritional and nutra merchants selling immunity-boosting supplements.

This guide will walk you through the very real threats posed to your immunity supplements merchant account before presenting you with the solutions you need to scale your business. But first, let’s take a look at the current state of the market.

High-Risk Merchants Selling Immune Support Dietary Supplements Enjoying Sales Boom

Throughout 2020 and 2021, sales of immunity supplements enjoyed record-breaking success. At one point, 17 of the top 20 multivitamin category products sold on Amazon were immune-related. The immunity supplement market grew by more than 25% in 2020 alone, and similar growth figures are expected to be reported for 2021.

The immunity supplement market is now worth over $3 billion in the United States alone, making this an excellent market to enter and scale as a high-risk merchant. Herbal supplements and products high in antioxidants and known immune-boosting vitamins such as vitamin C, vitamin D, zinc, and magnesium are all popular today. And that popularity looks set to continue long after COVID recedes.

But the problem is that some merchants are ruining the industry’s reputation by peddling false claims about “miracle” formulations, hiding side effects, and burying health disclaimers in the fine print. This is just one of several risks that pose a threat to legitimate nutraceutical businesses’ payment processing.

High-Risk Nutra Merchants Being Hurt Deceitful Operators and a Low Risk Appetite

Both the FTC and the FDA are cracking down on purveyors of supplements making false claims about their product efficacy. More specifically, they’re looking into hundreds of companies who have made erroneous claims about a supplement’s ability to fight off or prevent COVID infection.

Unlike the vaccines being administered to millions worldwide as we speak, these supplements have not been subjected to rigorous clinical trials required of almost all healthcare drugs. The FTC has already warned numerous companies about making unsubstantiated claims regarding their products, and it’s having a knock-on effect.

Those ingesting immunity-boosting products such as probiotic pills have been suffering some unwanted side effects. Others taking so-called “COVID-beating” herbal products have reported similar findings. The problem is leading to surging chargebacks within the industry, hurting legitimate merchants’ credit card processing abilities.

Many nutraceutical businesses who began their journey with processors such as PayPal and Stripe have had their accounts suspended or shut down with little to no warning. These low-risk providers have very little tolerance to chargebacks and have stopped processing payments for these types of products in many markets. As we’ve mentioned before, setting up your payment processing in this way is always risky for a supplement business.

The good news is that you can mitigate these risks to your business.

Are you running a supplements business with Stripe or PayPal? Did you know they could shut your processing down with just 24 hours’ notice? Please don’t wait for them to pull the trigger! Contact our high-risk payment experts instead to secure you the best possible payment processing for your neutraceutical business! 

How To Mitigate The Threats Posed To Your Immunity Supplements Merchant Account

The last thing you should be doing is sitting back as a high-risk merchant. Remember, your e-commerce business could lose credit card processing overnight. Instead, look to shore up your defenses. The first step starts with you performing an audit of your sales and marketing copy.

Perform a Sales and Marketing Copy Audit

This is the best place to start to protect your merchant account status. Ensure that you don’t use words such as “treat,” “cure,” “prevents,” or anything else similar. You cannot make such claims without clinical studies. If you get cited by the FDA or FTC, you will have your payment processing privileges revoked almost instantaneously.

Banks also want to steer clear of any business that mentions COVID. Vaccines are being released in high volumes right across the globe. That is the only prevention strategy that has stood up to the scrutiny of extensive scientific testing. Anecdotal evidence is not good enough to claim that you can cure or prevent any specific health condition.

Evaluate copy to ensure that it doesn’t make any specific claims about COVID. Focus on peer-reviewed science to make any claims about the ingredients of your health products. Don’t make promises that will do nothing but skyrocket your chargeback ratios when those outcomes cannot be guaranteed for all customers.

Compliance is critical when selling products in the health and wellness industry. That’s relevant whether you are a startup company launching a new product or an industry stalwart. No company is immune to action from federal agencies or acquiring banks.

Take Steps To Improve Your Protection Against Chargebacks and Fraud

As is the case for weight loss supplements, chargebacks are a real problem in this industry. In many cases, they are accidentally or fraudulently issued by customers. The good news is there are plenty of steps you can take to lower instances of both “friendly fraud” and more sophisticated attempts to hurt your company.

Here are just a few of the steps you can take to mitigate the risks associated with fraud and chargebacks:

  • Use a payment gateway provider that utilizes 3DS2. It’s a legal requirement for EU transactions, and in the US, it shifts the burden of proof concerning chargebacks onto the customer rather than the merchant.
  • Add the Address Verification Service (AVS) service to your checkout page to match customer’s billing addresses with those held on file by card issuers.
  • Offer superior 24/7 customer support across live chat, phone, and email to quickly and efficiently process refund requests.
  • Avoid free trials, and instead, offer discounted pricing for the first order.
  • Utilize anti-chargeback technology software such as Ethoca or Verifi to catch and resolve attempted chargebacks before they go on file.

Diversify Your Payment Options for Customers

Not only do credit cards pose a threat in the form of chargebacks, but they can cut you off from many potential customers. There are millions of individuals who do not possess a credit card. Many of them are willing and able to pay via the Automated Clearing House (ACH) debit network.

By adding ACH processing, you can lower the risk associated with chargeback-happy credit card customers. Better yet, it’s challenging for customers using ACH to issue a chargeback. You can then use your improved processing figures to apply for additional merchant accounts.

Secure One or Several Specialist High-Risk Merchant Accounts

While you have every right to start your business empire with low-risk-tolerance payment aggregators such as Stripe, the fate of your company rests in their hands. At any moment, your chargeback rates or industry news could see your account shut down within a matter of hours.

That’s why you must explore several alternative options, such as specialist high-risk nutraceutical merchant accounts. By securing your own high-risk merchant account, you could work directly with acquirers and processors that are more tolerant of risk. They also have specific industry experience and can help you take the necessary steps to reduce risk.

With your payment processing balanced through multiple merchant accounts, you can keep chargebacks at manageable levels, increase transaction approvals rates, and continue to apply for increased monthly sales limits.

High-Risk Merchants Selling Supplements That Support the Immune System Need the Help of Payment Experts

There’s never been a better time to have an e-commerce business in the immunity space right now. However, the risks threatening your merchant account status are genuine. With high sales volumes, it can be easy to become complacent. But now is the time to be more vigilant than ever.

Merchant services providers such as PayPal can take away from your credit card processing abilities in a mere matter of hours. Turning your immunity supplements business on its head. That why you need the help of high-risk payments experts to secure you a better solution.

With the help of DirectPayNet experts, you can secure multiple high-risk merchant accounts in North America, Europe, Asia, and beyond for your immunity supplements business. We can start the process of transitioning you away from the shared merchant accounts of Stripe and PayPal. Finally, you can leverage our expertise to dramatically reduce chargeback ratios and increase revenues.

Unlike other merchant services providers, we don’t just view you as a client; we see you as a business partner. So if you need to future-proof and scale your supplement or health product business, book a discovery call with a member of our team today!  

About the author

As President of DirectPayNet, I make it my mission to help merchants find the best payment solutions for their online business, especially if they are categorized as high-risk merchants. I help setup localized payments modes and have tons of other tricks to increase sales! Prior to starting DirectPayNet, I was a Director at MANSEF Inc. (now known as MindGeek), where I led a team dedicated to managing merchant accounts for hundreds of product lines as well as customer service and secondary revenue sources. I am an avid traveler, conference speaker and love to attend any event that allows me to learn about technology. I am fascinated by anything related to digital currency especially Bitcoin and the Blockchain.