Tagada
Payments · Skincare5 min readUpdated October 26, 2026

Skincare Merchant Account Compliance: The Rules to Follow

The rules a skincare brand follows to keep its merchant account: card network codes and thresholds, FDA and MoCRA, FTC claims, testimonials and photos.

Nick Bonnassies, CMO at Tagada · checked against 12 sources

Article summary

TL;DR

A skincare brand keeps its merchant account by following three sets of rules: card networks (merchant codes, registration for auto-ship, dispute thresholds, trial and subscription rules), the FDA and MoCRA (cosmetic claims, registration, adverse events), and the FTC (claims backed by evidence, typical testimonials, honest before-and-after photos). Check claims, offers and dispute ratios monthly.

  • Visa's MCC 5968 for subscription merchants names "cosmetics"; Mastercard requires registration for negative option billing of physical products.
  • Visa flags US merchants at 1.5% fraud plus disputes since April 1, 2026; Mastercard at 1.5% chargebacks.
  • MoCRA: serious adverse events reported within 15 business days; a US contact on the label since December 29, 2024.
  • If testimonials aren't typical, disclose "the generally expected performance"; before-and-after photos are claims too.
  • The FTC's line on "all natural": it "means just that".
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This guide is part of our hub on skincare payment processing. General information, not legal advice.

The rules, by who sets them

WhoWhat they setWhere it bites
Visa and MastercardCodes, registration, thresholds, subscription rulesMonitoring programs, fees, termination
FDA (with MoCRA)Cosmetic vs drug, registration, listing, adverse eventsWarning letters; processors read the same claims
FTCEvidence, testimonials, "natural" and "organic"Enforcement and refunds
Your processorIts prohibited list and limitsReserves, closure

Tagada follows Visa and Mastercard rules and the laws that apply to payments.

Card network rules

RuleRequirementSource
MCC5977 Cosmetic Stores; 5999 includes Beauty Supply; 5968 subscriptions, naming cosmeticsVisa1Visa Merchant Data Standards Manual, April 2026
Negative option registrationRequired for auto-ship of physical products, MCC 5968; $500 a year (2025 rules)Mastercard2Mastercard Security Rules and Procedures, Merchant Edition, February 11, 2025, sections 8.3, 9.2.1 and 9.4.10
Visa VAMP1.5%, fraud plus disputes, at least 1,500 cases a monthVisa3Visa, Acquirer Monitoring Program fact sheet, 2025 v2
Mastercard ECM1.5% and 100 chargebacks; ratio on the prior monthChargeback Gurus11Chargeback Gurus, Mastercard Excessive Chargeback Program, July 16, 2026 (secondary source), Mastercard2Mastercard Security Rules and Procedures, Merchant Edition, February 11, 2025, sections 8.3, 9.2.1 and 9.4.10
TrialsTerms shown separately; reminder 7 days before the end; online cancellationVisa4Visa Core Rules and Visa Product and Service Rules, edition of April 18, 2026, tables 5-20 and 5-21
SubscriptionsConfirmation with cancellation instructions; notice before billing on cycles of 6 months or lessMastercard12Mastercard, Subscription/recurring payments and negative option billing merchants: FAQs, 2022

1.5%

Visa (US) and Mastercard monitoring threshold in 2026

1,500

Fraud reports and disputes a month before Visa's threshold applies

100

Chargebacks a month before Mastercard's ECM level applies

$500

Mastercard negative option registration, per year (2025 rules)

FDA and MoCRA

RuleWhat it meansSource
Cosmetic claimsCleansing, beautifying, appearance; not treating or changing the bodyFDA5FDA, Is It a Cosmetic, a Drug, or Both? (Or Is It Soap?), September 11, 2024
Drug claims"Intended to treat acne", "regenerate cells": drug rules applyFDA5FDA, Is It a Cosmetic, a Drug, or Both? (Or Is It Soap?), September 11, 2024
Facility registration, product listingUnless exempt as a small businessMoCRA6FDA, Modernization of Cosmetics Regulation Act of 2022 (MoCRA), page updated August 10, 2026
Serious adverse eventsReport within 15 business days; keep recordsMoCRA6FDA, Modernization of Cosmetics Regulation Act of 2022 (MoCRA), page updated August 10, 2026
Safety substantiationKeep adequate evidenceMoCRA6FDA, Modernization of Cosmetics Regulation Act of 2022 (MoCRA), page updated August 10, 2026
Label contactUS address, phone or electronic contactMoCRA6FDA, Modernization of Cosmetics Regulation Act of 2022 (MoCRA), page updated August 10, 2026

Claims in detail: cosmetic or drug claims.

FTC: claims, testimonials and photos

TopicRuleSource
Typical resultsDisclose "the generally expected performance" when results aren't typical16 CFR 255.2(b)716 CFR 255.2(b), Consumer endorsements
"Results not typical"Such disclaimers don't cure deceptionFTC8FTC, Health Products Compliance Guidance, December 2022
Before-and-after photosA claim in their own rightFTC guidance, example 68FTC, Health Products Compliance Guidance, December 2022
"All natural""Means just that" (2016 cases)FTC9FTC, "all natural" cosmetics cases (2016) and Truly Organic (2019)
"Certified organic"Truly Organic, false claims, $1.76 million judgment (2019)FTC9FTC, "all natural" cosmetics cases (2016) and Truly Organic (2019)

Watch out

Retouched or atypical before-and-after photos are a claim you must back. Some merchants report payment cutoffs blamed on such visuals.

Affiliates and creators

  1. Liability

    An advertiser can be liable "even when the endorser is not liable"1016 CFR 255.1(d), Consumer endorsements.

  2. Give creators a claims list

    An approved list: cosmetic wording only.

  3. Disclosure

    Of paid or gifted relationships on every post.

  4. Review

    Pages and videos that link to your checkout.

Ad platform rules: can you advertise skincare on Facebook, Google and TikTok?

Monthly compliance check

  • [ ] Visa and Mastercard ratios by product and offer
  • [ ] Top 5 refund and dispute reasons
  • [ ] Trial reminders and renewal notices sent on time
  • [ ] Cancellation tested online
  • [ ] Pages, ads, emails: cosmetic claims only
  • [ ] Before-and-after photos: typical, documented
  • [ ] Creator and affiliate content reviewed
  • [ ] MoCRA listings updated for new products

Fig. 1One month's compliance check, item by item

Compliance check · OctoberSkincare brand, refills and trials
Visa ratio
Under the 1.5% line
Mastercard ratio
Under 1.5% and 100 chargebacks
Top refund and dispute reasons
Reviewed by product
Trial reminders and renewal notices
Sent on time
Cancellation
Tested online
Pages, ads, emails
One drug-like claim to rewrite
Before-and-after photos and creators
To review
MoCRA listings
New product to add

Illustrative record, not real data.

Two ratios against one line, then six checks.

Illustrative example.

How Tagada helps

Underwriting and billing built for compliant skincare offers

  • TagadaPay underwrites each file, with enhanced review on regulated verticals
  • TagadaPay refuses chargeback evasion and deceptive marketing around trials, subscriptions and cancellation
  • Subscriptions with trials, billing cycles, retries and automatic recovery
  • Native 3DS2, device intelligence and a rules engine

Plans are on the pricing page.

Apply for processing
Underwriting and billing built for compliant skincare offers

Updated on October 26, 2026

Nick Bonnassies

CMO at Tagada

CMO at Tagada. Before Tagada, Nick built direct-to-consumer brands that generated over $115M in sales, raised over $25M in crowdfunding and sold two of them. He also works as a fractional CMO on marketing operations and AI systems.

Frequently asked questions

What compliance rules apply to selling skincare online?

Card network rules (codes, registration, thresholds, subscriptions), FDA cosmetic rules and MoCRA, and FTC rules on claims, testimonials and photos. Your processor adds its own policy.

Are before-and-after photos allowed for skincare?

They're a claim in their own right under FTC guidance, so they need evidence and typical results, or a disclosure of what's typical. Ad platforms differ: Meta and TikTok have different rules.

What MCC should a skincare brand have?

Usually 5977 Cosmetic Stores, or 5999 for beauty supply. Direct-marketing subscriptions use 5968, which names cosmetics; Mastercard requires registration for negative option billing.

Can I call my skincare "natural" or "organic"?

Only if true. The FTC says "all natural" "means just that", and its 2019 Truly Organic case over false "certified organic" claims carried a $1.76 million judgment.

Sources

Checked October 26, 2026
  1. Visa Merchant Data Standards Manual, April 2026
  2. Mastercard Security Rules and Procedures, Merchant Edition, February 11, 2025, sections 8.3, 9.2.1 and 9.4.10
  3. Visa, Acquirer Monitoring Program fact sheet, 2025 v2
  4. Visa Core Rules and Visa Product and Service Rules, edition of April 18, 2026, tables 5-20 and 5-21
  5. FDA, Is It a Cosmetic, a Drug, or Both? (Or Is It Soap?), September 11, 2024
  6. FDA, Modernization of Cosmetics Regulation Act of 2022 (MoCRA), page updated August 10, 2026
  7. 16 CFR 255.2(b), Consumer endorsements
  8. FTC, Health Products Compliance Guidance, December 2022
  9. FTC, "all natural" cosmetics cases (2016) and Truly Organic (2019)
  10. 16 CFR 255.1(d), Consumer endorsements
  11. Chargeback Gurus, Mastercard Excessive Chargeback Program, July 16, 2026 (secondary source)
  12. Mastercard, Subscription/recurring payments and negative option billing merchants: FAQs, 2022

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