If out of 700 customers I receive about 2 or 3 chargebacks every month is this ok or is it bad? Not every single month... but close.

I honor ALL refunds. These people never even bother to email me to have their accounts cancelled, they just chargeback left and right for ridiculous dollar amounts like $9 for example. People like that make me sick. Why can't they email me to stop charging them? I swear they don't even bother to contact me first whatsoever.

Anyways, is that amount of chargebacks alright or too many and could I lose my merchant account if I get too many chargebacks? How many is considered too many again? I forgot...

I was just reading that anything over 3% is considered too high and you will lose your merchant account then.

But 3% out of 700 customers is 21. So does that mean that I could receive under 21 chargebacks every single month and still be safe? Because that would be 3%. That is alot of chargebacks, i'll never have that many. But is the above correct?

do you have instant account creation? Chargebacks are always bad but some ppl can expect one or two on occasion.

No, I don't have instant activation. But i'd say it averages to at least 3 chargebacks every month. I did have price changes which i think caused higher amounts and may have ticked some customers off.

But is it correct that I could receive under 21 chargebacks per month and still be ok? Because then i'm not worried anymore if that's correct because i'll never have that many.

I didn't have a sinlge chargeback for an entire year... but then I started advertising heavily and was getting an awful lot of customers and that's when the chargebacks picked up. But they aren't from fraudulent orders... I think it's from my price change :rolleyes:

Nevermind, maybe I should just call my merchant account and ask exactly how many I can have :)

Hi Juliet,

You don't sound like you are anywhere in the "red zone" with respect to chargebacks.

3 / 700 = 0.42% chargebacks

That should be under the monitoring radar for any reputable merchant processor.

Generally, if you go over 2.5% or more - you are in risk of being placed on monitored status... depending on a number of factors, in particular - the perspective and the manner in which your merchant processor handles these kinds of issues.

Out of about 1000 customers, we've only had 1 charge back. This was during a period of rapid expansion where in depth order scanning was not possible. I hope it stays that good for the rest of the time im in the business :)

I would suggest contacting your merchant provider, being auth.net they offer phone support/live chat/email

Not sure about others.

1 only This year!

3 attempts two we won :)

Good chargebacks are overused. I am glad you managed to not have to do two.

First do you have 700 customers or 700 transactions per month??
If 'customers' are they all monthly or not?

If not all monthly then your charge-back % will be much lower.. It goes by the number of transactions that month NOT your client base numbers.

Also (no offense) but you made price changes (raised) and never informed ANY of your customers???
If that *is* the case....No wonder your getting more charge-backs!!
What's funny is you expect them to communicate to you, but you didn't communicate to them of prices being raised??

I believe all companys should incooperate a price freeze ;)

Price freeze is good but not always the answer.

OT- Red how did you get a Xeon server to duel, much less hold a sword? :stickout: ;)

NO, of course not. Why on earth would I ever raise prices and not inform customers. They were VERY well informed and had 2 months notice.

cdgcommerce,
Thanks I fell better now, was worried I had way too many or something.

I looked over my papers and one month i'd have 5 chargebacks but then the other month i'd have zero. But I think it averages out to about 3 chargebacks every month. I lost some customers so right now I have about 700... so that would be 700 transactions each month being proccessed.

It's so ridiculous when you see people doing a chargeback for such a low dollar amount and they don;t even bother to call the number on their CC statement first or email me. :rolleyes:

Originally posted by Frosty
NO, of course not. Why on earth would I ever raise prices and not inform customers. They were VERY well informed and had 2 months notice.
Thanks for clarifiaction Juliet, at first it appeared you where saying you didn't inform them.
Originally posted by Frosty

It's so ridiculous when you see people doing a chargeback for such a low dollar amount and they don;t even bother to call the number on their CC statement first or email me. :rolleyes:
That is so very true!!!
IMHO if they charged back on me w/o any notification, I would instantly remove all access to those accounts. If not just back them up and terminate them.

No prob, yeah trust me I sent out several notices :)

I wish they would at least call the number on their statement before charging back, i'd refund them right away then. I always terminate their accounts too right away when someone does that.

I wish the system was different, like when you receive a notice in the mail showing someone is charging back, they should allow you to refund the transaction and then reply showing proof that you did refund them when you received the chargeback notice. I've tried that but then what happens is I end up refunding them... and then they STILL proccess the chargeback and refund the customer AGAIN.

What's up with that?

Hi Juliet,

Unfortunately - some of the limitations that you mention - like the fact that it is already too late once you get the chargeback notice, are part of the way that VISA & MC have the rules and regs setup.

There are a few initiatives underway designed to try to balance out the rules more equally between the issuing (cardholder) and the acquiring (merchant) side of the table but these things can take awhile.

So, until that time - the best bet is to just screen new orders carefully and minimize the number of chargebacks, just like you are doing. The bigger you get, the harder it is to prevent the inevitable chargebacks from popping up now and again.

Part of it also depends on the client base that a given host is going after. It *seems* that folks who target consumers may be slightly more susceptible to chargebacks as opposed to companies that work primarily with other businesses, webmasters, etc.

I would be curious if others would agree with that observation or if their experiences have been different.

I see thanks.

Yeah, I wish the system was different, it's kind of silly now. They should let us refund the amount before charging back.
But I think my higher than usual chargebacks is only because of my price change (not from fraud really in my case), I think it may have ticked some customers off. But I wish they would contact me first!

Time for the ultimate stupid question...

(drum roll)

What exactly is a chargeback?

:eek: :confused: :D tada :stickout: ;) :)

Originally posted by JYC
Time for the ultimate stupid question...

(drum roll)

What exactly is a chargeback?

:eek: :confused: :D tada :stickout: ;) :)
http://www.webhostingtalk.com/showthread.php?s=&threadid=211972

Originally posted by MN-Robert
1 only This year!

3 attempts two we won :)

How do you fight a chargeback?

If you have a real merchant account, you will get a form that allows you to contest a chargeback. They are hard to win for Internet services, but it does happen.

Originally posted by cdgcommerce
Part of it also depends on the client base that a given host is going after. It *seems* that folks who target consumers may be slightly more susceptible to chargebacks as opposed to companies that work primarily with other businesses, webmasters, etc.

. [/B]

Agreed. I'm surprised that web hosts see charge backs at all. Although a major problem right now with the industry is that it is becoming common knowledge that charge backs are easy and immediate.

On another board a mechant posted that a client had issued a charge back even though it was clear that he had received the product. When the merchant contacted to the client to inquire as to why he had charged back the client said "because I didn't feel like paying, everybody does it" :-(

I've also heard that Visa and MC are looking into revising the rules but I wouldn't expect it any time soon.

Paul

In January we will be in business for 5 years. We have had a total of 8 retrievals (which is a pending chargeback) we have proven 6 out of the 8 where legit and those customers are still our customers. Basically they filed a dispute instead of calling the # on the statement based on the advise of thier CC company.

Their credit card bank told them it is Always better to do a charge back dispute before calling the merchant because they way you have something "in the works" if they could not get a refund. This is just plain wrong but what can you do...

The two chargebacks that did go through, one was more than likely fruad that we should have caught and the other I know!! it was a good card but when the user uploaded an eggdrop we cancelled him (some other things against our TOS also) anyway before I could make an inventory of the files one of my tech term'd the account so I had no proof of why we cancelled him so he filed a charge back saying he did not know who we were... Oh well.. 2 in 5 years is not too bad.

We do not do instant sign ups. We require a authorization signed by all new customers (yes even on $5 hosting accounts) We more than likely turn down as many new accounts as we allow to get accounts. If it smelly funny, it is not accepted.

My 2 cents

Robert

What is an egg drop?

And also do you have many people refuse to sign the Authorization?

egg drop = soup :roll2: just kidding.. it is some type of packet/password sniffer of some sort of thing.. Honestly that was the least of the problem files.

We get some slack on the authorization but for the most part we get them. Now this is not full proof either because the person with the stolen CC is not going to care they will sign and fax it in anyway.. We do not ask for DL or other ID because that is pushing it on $5/accounts I think. I am not going to make people jump thru hoops but they must be willing to understand that the extra is worth the protection that they receive from it. When someone complains we just tell them it protects them because if we did not care and just took anyone's card for any account they would have to go through the whole process of fighting it.

We also use CVV2 and Ip verification.

Nothing is fool proof but it sure slows down the fraud. We have almost as many fraud sign ups in file than real ones. crazy business.



Robert

Robert

How do you do IP verification?

Not sure what you mean?

In the sign up form it captures the users IP address, we use DNSStuff.com to look up the ISP and make a judgement call based on the IP's ISP, email account, users address on the sign up and the information on the domain name they asked to host.. If it all does not match fairly close we contact the buyer for more information on why it does not match, Fraudulent buyers generally will not return our emails and the phone # are never good.

IP addresses can be cloaked so that is only part of what we do (listed is some of the others) we mostly just reply on good judgement.

The funniest thing and the biggest give away on fraud orders is the spot on our sign up it asks for address they put in their email address and then again in the email address spot. Also when everything is written in lower case or all upper case that gets looked over even more.. Very few people type their name all in lower or upper case. We find that most fraud sign ups do one or the other.

Of course the start of this thread is not about fraud but it kind of covers the bases with your merchant bank if you do all this extra "checking".

The other thing to avoid charge backs is to give good service. Don't give people a reason to charge you back... If they are on their 32nd day and want a refund on a 30 day policy, give it to them unless you think you can win against the merchant bank which it hard to do..


My 2 cents again :D

Robert

That is excellent advice Robert. Thank you very much for your time.

Not a problem... It is a lot of extra work sometimes and a real pain on Bitchy customers but in the long run it helps keep your merchant account bank happy and in turn they don't raise your discount rates and some of the chargeback fees can be 4 to 5 times the amount of the actual charge. A $5 hosting charge back can cost you $25 in charge back fees.. OUCH!!

:D


Robert

We are fairly small and have had 2 chargebacks in the past few weeks so they kill us. And now looking back on a few of our orders, I wont be surprised if a few more come back also. Each of them appear to be fraud or stolen cards. Friggin jerks.

Not to mention that they are each for yearly packages....and hence we lose that three or four hundred bucks

Grrrrr

an eggdrop isn't a sniffer, it's an irc bot

Originally posted by Oopsz
an eggdrop isn't a sniffer, it's an irc bot


ooops sorry... thank you.. for the smack upside the head :blush: my brain was not in gear at the time my hand was processing. :D


Bad IRC Bad..


Robert