When DesignMerge imports a variable picture, the picture will first be sized and positioned as it normally would if you had used the InDesign Place command to import this picture into the picture frame, and then the variable picture link's settings will be applied to the imported picture. Below are steps you can take to determine how a variable picture will be sized and positioned. 

First, before continuing, confirm you are using the most recent available version of DesignMerge. Installers are available at Meadows Downloads.

Then, examine the following settings in InDesign, in your document, and in your DDF: 

1. Review your InDesign Preferences, Import Options, and Frame Fitting Options. 
   To test your current settings, use the InDesign File > Place command to place one of the variable pictures in the variable picture link's frame. If the picture is not sized or positioned in the manner that you wish, select different InDesign Preferences, Import Options, and Frame Fitting Options before merging. For example, deselect (uncheck) the Preserve Image Dimensions When Relinking File Handling preference. 
2. Confirm you have selected appropriate DesignMerge settings for the variable link.
   To do this, open the Variable Links dialog (DesignMerge > Setup > Variable Links), select the variable link by its name in the list on the left. This will display its settings on the right side of the dialog. Confirm you have set the Link Type to Picture and that you have selected appropriate Fitting and Alignment settings. Once you have specified these settings, click OK to save any changes while closing the Variable Links dialog. Then, apply these settings manually to the picture that you imported above to confirm you have selected the appropriate settings for this variable picture link.
   
   For more information about the settings for a variable picture link, see Tutorial #1 (The Basics) in DesignMerge Documentation (available at Meadows Downloads). 
3. Determine whether the picture frame should be empty before you start a merge session. 
   Depending on your InDesign settings, you may see different results depending on whether a picture frame is empty or contains a picture before you start the merge session. When placing a picture that is replacing another picture, the previous picture's settings may be applied automatically. For example, if a picture frame is not empty, review which Fitting and Clipping Path settings have been applied to the picture inside this frame. 
4. Use InDesign to produce the same type of output that DesignMerge will be producing and examine how your digital printer handles that output.
           • PDF: Confirm your InDesign Export as InDesign PDF feature can export the picture and that the resulting PDF prints satisfactorily.
           • PPML or Creo VPS: Confirm your InDesign Export as EPS feature can export the picture and that the resulting PDF prints satisfactorily. 
       • PostScript: Confirm your InDesign Print to PostScript File feature can print the picture satisfactorily.
5. Import the graphic file to your digital printer and print the graphic file.
   This will confirm its format is compatible with that printer.
6. Change DesignMerge print driver's settings.
   If none of the above recommendations resolve this, it may be helpful to deselect the following print driver settings, if available: the Print Optimization setting and/or the VDP Optimizer setting. However, please note that this will reduce the print driver's optimization, so remember to turn these settings back on the next time you use this print driver.