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Supplement brands rarely lose their merchant accounts because of the product in the bottle. They lose them because of how they bill for it. The “free trial” that turns into $89 a month. The cancel button that’s harder to find than a parking spot at Costco. The subscription the customer swears they never agreed to.
Regulators, card networks and banks have all spent years cracking down on these exact patterns. Here’s what the rules actually require in 2026, including what happened to the FTC’s “click to cancel” rule, and how to bill in a way that keeps your supplement merchant account open.
Key takeaways
- The FTC’s “click to cancel” rule was vacated by a federal appeals court in July 2025, but subscription billing is still regulated.
- ROSCA, the FTC Act and state automatic renewal laws in places like California, New York and Massachusetts still require clear terms, real consent and easy cancellation.
- Visa and Mastercard have their own free-trial and subscription rules, and banks enforce them.
- Most supplement chargebacks come from billing confusion, not product complaints. Clear billing is your best chargeback strategy.
What Happened to “Click to Cancel”?
In 2024, the FTC finalized an updated Negative Option Rule, nicknamed “click to cancel,” that would have required cancellation to be as easy as signup. On July 8, 2025, days before it took full effect, the Eighth Circuit Court of Appeals vacated the entire rule on procedural grounds.
Plenty of subscription businesses celebrated. They shouldn’t have. The rule’s death didn’t make tricky billing legal. It just removed one of several laws that make it illegal.
The Rules That Still Apply
ROSCA. The Restore Online Shoppers’ Confidence Act covers online subscriptions and auto-renewals. Before collecting billing information, you must clearly disclose the material terms, get the customer’s express informed consent and provide a simple way to stop recurring charges. The FTC actively enforces it.
The FTC Act. Deceptive and unfair practices are still illegal, including hidden terms, misleading “risk-free” claims and cancellation mazes designed to wear customers down.
State automatic renewal laws. California updated its law effective July 1, 2025, with requirements that look a lot like the vacated federal rule. New York has its own law, and a Massachusetts regulation that took effect in September 2025 requires cancellation to be at least as easy as signup. If you sell nationally, the strictest state effectively sets your standard.
Card network rules. Visa and Mastercard have specific requirements for free-trial and subscription offers, including clear disclosure, express consent, notice before charging and an easy way to cancel. Your bank enforces these because the networks hold your bank responsible.
Why This Hits Supplement Brands Hardest
Supplements are a natural fit for subscriptions: people use them daily and run out monthly. That’s great for revenue and a magnet for scrutiny. The “free trial, just pay shipping” model in particular has a long enforcement history, which is why many banks treat supplement subscriptions as high risk before they even look at your numbers.
Add health claims that promise more than a capsule can deliver, and you’ve got a customer who feels misled twice: once by the label and once by the bill.
The Chargeback Connection
When customers don’t recognize a charge or can’t figure out how to cancel, they don’t email you. They call their bank. Each of those calls becomes a dispute, and supplement brands with confusing billing can watch their ratio climb past card network thresholds in a single bad month. Card networks count disputes, not dollars, so a $39 refill dispute weighs the same as a $900 one. Check your numbers with our chargeback ratio calculator, and see our chargeback reduction guide.
Selling supplements on subscription? See how we set up supplement and nutraceutical merchant accounts →
A Billing Setup That Keeps Your Account Open
- Put the price where people can see it. The recurring amount, the billing frequency and when the first paid charge happens, right next to the buy button. Not in the terms. Not in gray 8-point font.
- Get real consent. A separate, unchecked box for the subscription, with the terms in plain words.
- Send reminders. A confirmation after signup, a heads-up before a trial converts and receipts that show how to cancel.
- Make cancellation easy. Online, in a few clicks, honored immediately. If customers have to call during business hours and defeat a retention script, you’re building a chargeback machine.
- Use a recognizable descriptor. Your brand name and a support number, so customers recognize the charge instead of disputing it.
- Keep claims honest. Structure and function claims with the required disclaimer, and no disease claims. Overpromising drives disputes and regulatory attention.
- Watch your ratios monthly. Trial conversions are where problems show up first.
What Banks Look For in a Supplement Application
Underwriters will review your checkout flow, your terms, your cancellation process, your product claims and your chargeback history. Many will place test orders. If your funnel only works when customers don’t read it, it won’t survive underwriting. If it’s clear and fair, you’ll find banks that actually want subscription supplement business.
The Merchant Guru’s Take
“Click to cancel” died in court, but the idea behind it didn’t. Between ROSCA, state laws and card network rules, honest subscription billing is still the only kind that lasts. The good news: it’s also the kind that converts loyal customers instead of angry ones. If you want a second opinion on your checkout before a bank sees it, we’re happy to take a look. Learn more about our supplement and nutraceutical merchant accounts.
Frequently Asked Questions
Is the FTC click to cancel rule still in effect?
No. The Eighth Circuit vacated the FTC’s Negative Option Rule on July 8, 2025. Subscription billing is still regulated by ROSCA, the FTC Act, state automatic renewal laws and card network rules.
Can supplement brands still offer free trials?
Yes, but the terms must be clearly disclosed, the customer must expressly agree to the subscription, and cancellation must be easy. Card networks also have specific free-trial rules.
Why do supplement subscriptions get so many chargebacks?
Most come from customers who don’t recognize the charge, didn’t understand the trial would convert or couldn’t cancel easily. Clear billing prevents most of them.
Which state subscription laws matter most?
California, New York and Massachusetts have some of the strictest automatic renewal rules. If you sell nationally, building to the strictest standard is the simplest approach.
What do banks review in a supplement merchant application?
Your checkout flow, subscription terms, cancellation process, product claims, billing descriptor and chargeback history. Many underwriters place test orders.
This article reflects federal and state law as of October 2026. It is general information, not legal advice. Have an attorney review your subscription terms.
