My merchant account provider dropped me?
Hello,
This past week, I was sadly suprised that my merchant account provider has dropped me due to a high chargeback rate. I do not understand why they did this, because I have always had funds in my account to cover the chargebacks. In any event, they are reviewing my status and seeing what they can do to get me going again - although, they did state that they probably will not be able to reopen my account.
It will take a couple of days for them to do this review, and in the meantime I will probably have to search for another merchant provider. My questions are:
1. Can anyone reccomend a merchant provider that wouldnt drop me in these circumstances? I know web hosting providers tend to have a higher chargeback ratio, so I figure you must be using another provider. What do you all do to avoid these chargebacks? I verify all orders via IP address, CVV and AVS, and can't think of what I can do short of phone verifications to prevent this.
2. Does anyone know of a 3rd part processor that I can use to process orders until I either get my merchant account reopened or get a new one? I am hoping these 3rd party processors (the ones that do not actually give you a merchant account) can get me setup quickly so I can continur to process my orders. I have actually setup a few new clients this week without verifying their card numbers, and this scares me because who knows if they are spammers!
YEESH! :bawling: This is the last thing I expected to happen, but at this point I just need to pick myself up, dust myself off and find a solution.
Thanks in advance for your help!
Best regards.
David Harris
Re: My merchant account provider dropped me?
Quote:
Originally posted by David-WWH
Hello,
This past week, I was sadly suprised that my merchant account provider has dropped me due to a high chargeback rate.
I'm curious, how many chargebacks have you received this year? I want to know what merchant providers consider a "high" chargeback rate.
Authorizenet and a Merchant Account
You might want to get a merchant account with and use a gateway like authorizenet.com.
Keeping chargebacks down:
I have turned on AVS and CVV2 requirements, and modified my forms to not allow NON-US orders. (I know how bad the non-us stuff sounds, but it was the cause of 95% of my chargebacks). I review every order and look for inconsistencies. If a person hits my site, and has orderd a domain name and hosting in less than 4 minutes (start to finish) it is a suspect order. I track when the first hit my site, and when they return. Generally, a potential customer will hit my site several times, comparing my offereing with others. After the comparison, if I look good they place an order. I generally see hours between first visit and the order. I call all suspect orders and verify information. If it sounds bogos, I go to my gateway and cancel the transaction before the batch settles. I eat the cost of a domain name (which I take ownership of), but at $10.00 a name, it is cheaper than the chargeback fees.
There are several banks that will do business with online webhosters.
Merchant accounts typically have fees like this. (Vary in $ by merchant).
Minimum discount rate fee: $25.00
Monthly statement fees: $10.00
AVS: .05
Discount Rate: 2.18-6% (can find 2.25/2.35 a lot of places)
Gateway Fees: $10.00-$50 (You shouldn't pay over $19 and try to get $10. $10 is break-even for a lot of merchant integrators)
GateWay Transaction fees: .10-.30
If you add up the fees, your around $50 a month if you never sell anything.
I don't know how this compares with other solutions mentioned, but this works for many hosters.
Bob