I was reading about accepting credit cards and found this:
"A chargeback occurs when a card holder disputes a credit card transaction with his or her credit card issuer. The card issuer initiates a chargeback against the merchant account. The amount of the disputed transaction is immediately withdrawn from the merchant's bank account, and the merchant has 10 days in which to dispute the chargeback with proof of purchase, signature, proof of delivery, etc. A chargeback fee is usually assessed to the merchant on top of the actual transaction."

What would this proof be for someone selling web hosting?

Originally posted by appletreats
What would this proof be for someone selling web hosting?

In my experience, there is none. The only realistic defense is to get a signed Credit Card Authorization Form from every customer - but even that is not 100% perfect (the customer can claim they never signed that document and the bank will usually side with them).

The only true proof of sale is if the sale is in-person and you swipe the credit card through a card swipe machine, *or* if you had a product delivered and got proof of delivery in the form of a signature on the bill of lading or something similar.

Web hosts just have to figure it's a cost of doing business and write it off at the end of the year. It really sucks, and the whole credit card/merchant system deperately needs to be totally re-designed to fit into the modern age, but unfortunately that's not likely to happen anytime soon.

Jason

chargebacks are rare and usally only occur when fraud is also involved. i wouldnt say the system needs to be redesigned.

The harder you work to prevent fraudulent orders, the better off you will be in terms of chargebacks.

Originally posted by multipleimage
i wouldnt say the system needs to be redesigned.

Cough... excuse me. Sorry... I had something in my throat there... :eek:

Originally posted by multipleimage
chargebacks are rare and usally only occur when fraud is also involved. i wouldnt say the system needs to be redesigned.

I strongly disagree. If you are careful and take some precautions you can virtually eliminate cases of stolen credit cards an that type of fraud such that such items never get transacted (and thus never get to the point of chargeback).

In my experience, about 90% of the chargebacks we have received in the last 3.5 years have been legitimate customers with legitimate charges disputing those charges to avoid paying for service. And in every single case, the credit card company has let them get away with it.

You'd never get away with walking out of a restaurant without paying. Nor would you be allowed to walk out of a jewelry store with a diamond necklace in your pocket. And yet not only do the credit card companies allow their customers to outright steal from businesses like ours, they actually encourage it!

The system needs to be changed. Dramatically. The current system was created when the only way to make a credit card transaction was to walk into a store, the store would take an imprint of the credit card (remember the old card imprinters? The ones where you had to keep your carbons? Man do I feel old.), the customer would sign it, and the store would send a copy of that imprint in to the merchant bank which would then reimburse the store at a later time.

Now the whole credit card transaction system is smoke and mirrors (erm... ok, microchips and circuitry - but it's the same difference), but the chargeback systems and rules and regulations haven't changed substantially in 20 years. It's a farce. And it needs to be changed.

Jason