Male enhancement products are increasing in popularity each year, and the numbers tell the story. According to statistics from the National Institutes of Health (NIH), 23 percent of men use male enhancement supplements. Likewise, the sexual enhancement supplements market is expected to reach 324 million USD by 2025. For male enhancement businesses, the economic forecast is skyrocketing — yet these business owners continue to find increasing obstacles in getting even basic payment processing services.

If you’re the owner or operator of a male enhancement supplement business, you’re probably already aware of how difficult it is to get a male enhancement merchant account. As part of the supplements and nutraceutical industry, male enhancement businesses are considered to be high-risk by merchant service providers. However, one payment gateway provider, Zenti, specializes in providing high-risk merchant account services to these industries. By using Zenti, male enhancement business owners can offer their customers a full range of credit card payment options as well as a variety of online payment methods to choose from. In addition, Zenti offers convenient tools like automated billing, payment tracking, and other solutions to help high-risk industries streamline their business operations.

Why are male enhancement companies considered high-risk?  The answer has everything to do with financing and underwriting, which we’ll discuss in a moment. Ultimately, it has nothing to do with how successful your business is because, as you can see from the list below, scores of successful industries are also categorized as high-risk, including:

• Male enhancement products.
• Vitamins and dietary supplements.
• Adult entertainment.
• Cannabis and CBD.
• Property management.
• Document preparation.
• Antiques and collectibles.
• Online dating.
• Health and beauty.
• Guns and ammo.
• Travel and tourism.
• Fantasy sports.
• Online gaming and gambling.
• Subscription billing services.
• Payday lenders.
• Pawnshops.

These are all highly successful industries in today’s global eCommerce market. In particular, the supplements industry is booming, with Americans spending around 2.1 billion USD on weight-loss supplements alone. Yet, these are all considered to be high-risk businesses for lenders, banks, and payment processors. And essentially, the reasons have nothing to do with sales success, but have everything to do with chargebacks. 

The High Cost of Too Many Chargebacks

What is a chargeback, and how does it damage your business? A chargeback is a credit card charge that has to be refunded by the merchant. Chargebacks occur when a customer either wants to be reimbursed for an unsatisfactory product (or service) or claims that they never made the charge in the first place. For any type of business, chargebacks are inevitable. It’s only when they reach above-normal proportions that they start impacting an industry’s reliability score.

Chargebacks are also used in a type of scam known as “friendly fraud,” where customers make credit card charges and then later deny having made them. In many cases, customers may commit friendly fraud unintentionally, such as when they contact a credit card company directly rather than handling a return through a merchant. However, some customers might purchase a male enhancement product, and then be embarrassed if the bill or invoice is discovered by a spouse or significant other. This may cause them to deny making the purchase altogether, and in some cases, even call the credit card company and claim the charge was unauthorized.

In other scenarios, scammers use friendly fraud transactions to defraud merchants out of products, services, and money. In some instances, these fraudsters may claim that a product was never delivered when it actually was.

No matter how it’s committed, friendly fraud is a major problem for businesses and payment processors. Recent statistics show that eight out of 10 business owners have seen an increase in friendly fraud chargebacks, and by 2023, analysts estimate that one in 10 credit card chargebacks will be due to friendly fraud.

Male Enhancement Businesses and Chargeback Rates 

When it comes to standard refunds, these are unavoidable in any business. However, some types of industries lead themselves to a higher chargeback ratio simply because of their business type. In the case of male enhancement products, as well as supplements and nutraceuticals, business-savvy merchants and manufacturers typically offer a money-back guarantee because it’s the right thing to do in a competitive market. However, some customers — particularly those who are skeptical of holistic products — might be too quick to return these products without even giving them a fair chance. Likewise, some customers might not bother to read the label or follow the instructions, or they may not get the full benefits because they didn’t take the correct dosage. Essentially, when it comes to supplements and male enhancement products, people can sometimes give up too easily and demand a refund.

On the other hand, some customers expect too much out of a product. In these cases, they may actually expect a “miracle cure” from a supplement. Sometimes this can happen because of over-hyped marketing (which we’ll discuss below), but in many cases, it happens because the customer simply doesn’t have expectations that are based on reality.

Since reputable supplements merchants typically offer a money-back guarantee on their products, this type of “expectations vs. reality” scenario can lead to high chargeback rates, and it’s a prime reason why male supplements are part of a high-risk industry. These high chargeback ratios, as well as their potential for fraud, make credit card processors, banks, and financial institutions increasingly reluctant to provide merchant account services to nutraceuticals businesses.

High chargeback rates aren’t just costly in themselves; they also force merchant account processors to charge higher fees for their services. And if chargebacks keep increasing, these processors might even suspend a merchant account altogether.

If you’ve been denied payment processing services for your male enhancement business because of unusually high chargeback rates, Zenti can help you get approved for credit and debit card payments, as well as convenient e-check and mobile payments for your customers. In addition, we provide payment solutions that can help you reduce chargeback rates while increasing your sales.

But chargebacks are only one part of the equation. Another has to do with reputational issues, and how the male enhancement supplement industry is perceived by financial underwriters.

Reputational Obstacles

When Viagra appeared on the scene in 1998, many supplements manufacturers began to focus on creating all-natural alternatives to pharmaceutical male enhancement pills. Unfortunately, these manufacturers included a number of scammers who decided to take advantage of the market boom, while paying little attention to the effectiveness of the products they were peddling.

When these bad actors still occasionally emerge on the market with their fake products, they can cause some consumers to be suspicious of the entire industry. Added to this, many male enhancement supplements aren’t approved by the FDA. These reputational concerns greatly affect the willingness of banks and financial institutions to provide underwriting for male enhancement merchant accounts.

Merchant Accounts and Underwriting

Ultimately, all of these concerns relate to underwriting, which is simply a banking term for financial backing. Merchant account companies, as well as credit card companies, partner with banks and financial institutions for their funding. Just as lenders look for good credit and collateral, payment processors prefer working with industries that don’t pose risks. Risks aren’t just expensive for banks; they’re also costly for merchant account providers as well as the banks and financiers who underwrite them.

Here’s what you can do to help prevent chargebacks in your male enhancement supplement business:

Give Full Descriptions of Your Products

Chargebacks happen when a customer’s expectations aren’t met. To counter this, be sure to provide detailed descriptions, as well as full label and dosage information, for every product you sell. In addition, give a clear explanation of the benefits that customers can realistically expect.

Give Clear Pricing Information

If customers feel that they’ve been overcharged, they’ll ask for a refund. Be sure to display prices where they can be seen, and make it clear exactly how much product customers will be getting for that price.

Include Lots of Photos and Videos

A picture really can be worth a thousand words when it comes to product descriptions, so include multiple photos of each product and its labeling. Also, it helps to include a video explanation of how products should be taken for optimum effect.

Be Clear About Your Refund Policy

Make sure that customers can see your refund policy, and word everything clearly so there won’t be any misunderstandings.

Include Your Contact Information on Every Page of Your Website

Customers get frustrated if they can’t access your contact information. Be sure to include your company name and phone number on each page of your site. Also, include your full contact information on bills, invoices, and all customer transactions.

Have Alternative Products on Hand

You can sometimes prevent a chargeback by offering an alternative product. Be sure to have a list of alternative supplements that you can offer, in case a product doesn’t work out for a customer.

Be There for Your Customers

The No.1 rule of customer support is being there. When customers call or email, make sure someone is on hand to answer phone calls or emails right away and deal with questions knowledgeably. If customers can’t get answers to their questions, they might go straight to the credit card company for a chargeback.

When refunds are necessary, issue them promptly, and send the customer a letter or email to let them know that the refund has been issued. This level of attention and service can help you garner a customer’s loyalty and retention, even if a product didn’t work out for them.

Benefits of Having a Merchant Account

As a vendor of male enhancement products, it’s important for you to gain a level of reliability and trust with your customers. Here’s how a high-risk merchant account can help:

Multiple Credit Card and Payment Options

According to surveys, 90 percent of consumers prefer buying from merchants that can offer a variety of payment options. With a high-risk merchant account, you can offer your customers an entire range of credit, debit card, and mobile app payment methods, as well as e-check payments so you’ll never have to chase down bounced checks again.

Tracking

Tracking payments is essential for any business; but without the right tools, this can take valuable time away from your customers. A high-risk merchant account can give you the latest generation tools that can track every payment from point of sale to completion.   

Automated Billing

There’s nothing more tedious or time-consuming than handling monthly invoices; but with a high-risk merchant account from Zenti, you’ll be able to send out automated bills and invoices with a click of the mouse.

Security Protocols

With a reputable high-risk merchant account, you can rest assured that payments will be encrypted and encoded to protect your safety, and the safety of your customers.

How Zenti Can Help Your Business

If you’re trying to get male enhancement merchant account services, Zenti can help. As an industry leader for high-risk businesses, Zenti specializes in providing male enhancement and nutraceuticals industries with a full roster of credit card payment solutions, including VISA, Mastercard, Discover, and American Express, as well as convenient mobile app and e-check payment options. In addition, Zenti can help you streamline your business with:

• Up-to-date payment tracking tools from point of sale to transaction completion
• Automated customer billing and invoicing according to your preferred schedule
• Payment security protocols, including encryption and encoding

Zenti also offers a fair pricing structure, with reasonable fees that your company can afford. Plus, Zenti charges the same rates for every major credit card, no matter which ones your customers decide to use.

If you’re ready to make your male enhancement business more successful, contact Zenti to find out how we can help you generate more sales, boost your ROI, and increase customer satisfaction with your company.