Tagada
Payments · Skincare4 min readUpdated October 26, 2026

Cosmetic or Drug? The Skincare Claims That Get Merchant Accounts Closed

Which skincare claims make a cream a drug under FDA rules, recent warning letter examples, how Stripe and Shopify read them, and a rewrite grid.

Nick Bonnassies, CMO at Tagada · checked against 9 sources

Article summary

TL;DR

Under US law, a product's claims decide whether it's a cosmetic or a drug. "Cleansing, beautifying, promoting attractiveness, or altering the appearance" is cosmetic; treating a disease or affecting "the structure or any function of the body" is a drug. "Moisturizes" is cosmetic; "removes wrinkles", "boosts collagen" or "treats acne" is a drug claim. Processors read the same line: Stripe and Shopify Payments restrict products with harmful or unverified health claims.

  • The law defines cosmetics by their purpose: cleansing, beautifying, promoting attractiveness or altering the appearance.
  • A product "to remove wrinkles or increase the skin's production of collagen" is a drug or a device; "moisturizing is a cosmetic claim".
  • "Restore hair growth, reduce cellulite, treat varicose veins", "regenerate cells" and cleansers "intended to treat acne" are drug claims.
  • Moisturizers and makeup with sun-protection claims are both cosmetic and drug.
  • Walmart warns a product that "claims to eliminate wrinkles may be viewed by FDA as a drug".
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This guide is part of our hub on skincare payment processing.

What the law says

CosmeticDrug
Purpose"Cleansing, beautifying, promoting attractiveness, or altering the appearance"121 U.S.C. 321(g) and (i)Treat or prevent disease, or "affect the structure or any function of the body"121 U.S.C. 321(g) and (i)
ApprovalNoFDA approval before saleOTC monograph or approval
What decidesThe intended use, shown by your claims2FDA, Is It a Cosmetic, a Drug, or Both? (Or Is It Soap?), September 11, 2024Same

The words that tip a cream into a drug

Cosmetic wordingDrug wordingSource
"Moisturizes", "hydrates""Removes wrinkles"FDA3FDA, Wrinkle Treatments and Other Anti-aging Products, February 25, 2022
"Smooths the look of fine lines""Increases collagen production"FDA3FDA, Wrinkle Treatments and Other Anti-aging Products, February 25, 2022
"Refreshes tired-looking skin""Regenerates cells"FDA2FDA, Is It a Cosmetic, a Drug, or Both? (Or Is It Soap?), September 11, 2024
"Gentle cleanser for oily skin""Treats acne"FDA2FDA, Is It a Cosmetic, a Drug, or Both? (Or Is It Soap?), September 11, 2024
"Evens the look of skin tone""Treats hyperpigmentation, melasma"FDA warning letter4FDA warning letters to Skin Beauty Solutions (July 25, 2024), Kabana Skin Care (March 12, 2025) and Confer With (August 1, 2025)
"Firms the look of skin""Reduces cellulite"FDA2FDA, Is It a Cosmetic, a Drug, or Both? (Or Is It Soap?), September 11, 2024

Fig. 1One night cream, two ways to describe it

Cosmetic wording

  1. Night cream"Moisturizes, hydrates"
  2. claimsAppearance claim"Smooths the look of fine lines"Approved

Sold as a cosmetic

Drug wording

  1. Night cream"Removes wrinkles"
  2. claimsBody claim"Increases collagen production"Declined

Drug rules apply

Same jar. The words decide the rules.

Wording from FDA, Wrinkle Treatments and Other Anti-aging Products, February 25, 2022. The product is an illustrative example.

Products that are both

  1. Moisturizer or makeup with SPF

    Cosmetic and drug2FDA, Is It a Cosmetic, a Drug, or Both? (Or Is It Soap?), September 11, 2024.

  2. Acne cleansers and treatments

    OTC drugs2FDA, Is It a Cosmetic, a Drug, or Both? (Or Is It Soap?), September 11, 2024.

  3. Anti-dandruff products

    OTC drugs2FDA, Is It a Cosmetic, a Drug, or Both? (Or Is It Soap?), September 11, 2024.

You can sell them; label and claim them under drug rules, and tell your processor.

Recent FDA warning letters

DateCompanyClaim cited
July 25, 2024Skin Beauty Solutions, peels sold online"Clears Acne & Scars"; "Prevents Fine lines & Wrinkles"4FDA warning letters to Skin Beauty Solutions (July 25, 2024), Kabana Skin Care (March 12, 2025) and Confer With (August 1, 2025)
March 12, 2025Kabana Skin Care, body wash with sun protection"Zinc Oxide is an excellent sunscreen..."4FDA warning letters to Skin Beauty Solutions (July 25, 2024), Kabana Skin Care (March 12, 2025) and Confer With (August 1, 2025)
August 1, 2025Confer With, hydroquinone lightening product"Ideal for: Hyperpigmentation, Melasma, Dark Spots, Age Spots."4FDA warning letters to Skin Beauty Solutions (July 25, 2024), Kabana Skin Care (March 12, 2025) and Confer With (August 1, 2025)

What processors read

ProviderRuleSource
Stripe"Pseudo-pharmaceuticals or nutraceuticals that are not safe or make harmful claims"5Stripe, Restricted and prohibited businesses, updated September 22, 2026
Shopify Payments"Products that make health claims that are not verified by a local or national regulatory body"6Shopify Help Center, Shopify Payments eligibility, read October 26, 2026
Merchants' reportsSingle words such as "brightening" flaggedForum8UK Business Forums, Advice needed having Shopify/Stripe payment issues, read October 26, 2026 (merchant reports)

Marketplaces draw the same line.7Walmart Marketplace, Beauty restricted category, updated July 9, 2026

[A product that] claims to eliminate wrinkles may be viewed by FDA as a drug.

Walmart Marketplace, Beauty restricted category, updated July 9, 2026

Reviewers read labels, product pages, ads, featured reviews and before-and-after photos, which the FTC treats as claims in their own right9FTC, Health Products Compliance Guidance, December 2022.

Rewrite grid

  1. List every claim on labels, pages, ads, emails and reviews you feature.
  2. Mark drug words: treat, cure, heal, repair, regenerate, remove, eliminate, collagen, acne, eczema, rosacea, melasma.
  3. Rewrite as appearance: "the look of", "feels", "appears".
  4. Move drug products (SPF, acne) to drug labeling.
  5. Check visuals: before-and-after must show typical results9FTC, Health Products Compliance Guidance, December 2022.
  6. Rename URLs and tags that name conditions.

Based on FDA guidance on cosmetic and drug claims and the FTC's health products guidance.

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

How Tagada helps

Underwritten skincare files, routed across processors

  • TagadaPay underwrites each file, with enhanced review on regulated verticals
  • Routing across Stripe, Adyen and TagadaPay, cascade on decline
  • Checkout standalone, on Shopify, on WooCommerce or headless
  • Subscriptions with trials, billing cycles, retries and automatic recovery

Plans are on the pricing page.

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Underwritten skincare files, routed across processors

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's the difference between a cosmetic and a drug claim?

A cosmetic claim is about cleansing, beautifying or appearance; a drug claim is about treating disease or changing the body's structure or function. "Moisturizes" is cosmetic; "removes wrinkles" or "boosts collagen" is a drug claim.

Can I say my cream reduces wrinkles?

Not as a cosmetic. The FDA says a product to "remove wrinkles or increase the skin's production of collagen" is a drug or device. "Smooths the look of fine lines" stays on the appearance side.

Why does my processor care about cosmetic claims?

Because drug-like claims fall under their rules: Stripe's line on harmful claims and Shopify Payments' definition of unverified health claims. A wording change can keep an account open.

Are SPF moisturizers cosmetics or drugs?

Both: moisturizers and makeup with sun-protection claims are cosmetic/drug products. They follow drug labeling for the SPF claim.

Sources

Checked October 26, 2026
  1. 21 U.S.C. 321(g) and (i)
  2. FDA, Is It a Cosmetic, a Drug, or Both? (Or Is It Soap?), September 11, 2024
  3. FDA, Wrinkle Treatments and Other Anti-aging Products, February 25, 2022
  4. FDA warning letters to Skin Beauty Solutions (July 25, 2024), Kabana Skin Care (March 12, 2025) and Confer With (August 1, 2025)
  5. Stripe, Restricted and prohibited businesses, updated September 22, 2026
  6. Shopify Help Center, Shopify Payments eligibility, read October 26, 2026
  7. Walmart Marketplace, Beauty restricted category, updated July 9, 2026
  8. UK Business Forums, Advice needed having Shopify/Stripe payment issues, read October 26, 2026 (merchant reports)
  9. FTC, Health Products Compliance Guidance, December 2022

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