Merchant accounts vs. IPSP billing

[cj]

Originally posted by Hell Puppy@Jan 9 2005, 05:57 AM
I haven't done the legwork to setup a merchant account yet, although we're probably the prototypical good candidate for it in adult. Low price points, we dont push the envelope at all with billing tricks, affiliates by invite only and we deliver what we promise. So we have NO chargebacks.

This is a very common mistake made by people going for their own merchant account .... 'we provide good service therefore we will have no chargebacks'

People who chargeback are rarely doing so because they are pissed off with the service - a pissed off customer will try to contact the place they are pissed off at to abuse them, therefore you can step in and turn a potential chargeback into the lesser evil of a refund.

Anyone who immediately contacts the bank to chargeback obviously has some experience with the process - and nothing you could do with support, providing what you advertise etc has anything to do with it.

There's 2 types of people who chargeback ....

1) really really pissed off people who have tried all avenue's and chargeback is final straw

2) people who don't want to pay for the item

We initiated some steps to be proactive with chargebacks going back about a year. When someone tries to chargeback, they are phoned up by one of our service reps ...

'hi, just wondering why you are trying to chargeback this service?'

'errr .... umm ..... aaah ..... errr .... i ... i um .....'

'we just wanted to let you know that charging back this service is actually accusing us of fraud - so we were just wondering who owns this ip so we can sort it out'

'errr .... umm ...'

a phonecall will almost always prevent the chargeback from occuring ...

Assuming that all the processing problems belong to only those with deceptive billing practices is why so many small companies went out of business in '04 ... Visa taught customers to chargeback so they could protect and keep their clients, but its our responsibility to protect our business by not letting Visa's rules negatively effect us ...