For CBD merchants, adhering to FDA guidelines is not only crucial for marketing products but also essential for securing and maintaining a CBD merchant account for payment processing.
Impact of Regulatory Bodies on CBD Marketing
The FDA, FTC, and NAD oversee product safety and truthful advertising, including the highly scrutinized CBD market. This intense scrutiny has led to strict underwriting guidelines by processors for CBD merchant accounts.
Importance of Compliance for Merchant Accounts
Banks and processors view the CBD market as high-risk, necessitating adherence to strict guidelines. Merchants must effectively market their products within these constraints to ensure the availability of payment processing options.
Guidelines for CBD Advertising and Merchant Accounts
Processors scrutinize eCommerce sites for compliance with FDA guidelines. This includes thorough vetting of product descriptions, claims, and overall website content.
Key Aspects of Underwriting for CBD Accounts
- Verification of THC content below 0.3%.
- Requirement of Certificates of Analysis (COA) for each product.
- Review of marketing messages for prohibited medical claims.
Best Practices for CBD Health Claims
Merchants must carefully navigate marketing language to avoid any implications of medicinal value. This includes avoiding claims about body structure or function and explicit or implicit disease claims.
Guidelines for Product Descriptions and Claims
- Focus on physical properties like appearance and texture.
- Avoid stating or implying any health benefits or effects on the body.
- Exclude any language that suggests treatment or prevention of diseases.
Challenges with Customer Reviews and Testimonials
While beneficial for sales, customer reviews making health claims can jeopardize merchant account approvals and should be carefully monitored and managed.
Future Outlook and Support from Bankcard International Group
As regulations evolve, CBD remains a high-risk industry for financial institutions. By following best practices, merchants can facilitate easier payment processing. Bankcard International Group, with extensive experience in high-risk processing, offers support and solutions for CBD merchants navigating these challenges.
