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  1. #1

    Exclamation What happens when you get too many charge backs?

    I would like to know if you are selling high risk products online what will happen to you if your payment processor get too many charge backs? will they lock up your account?

  2. #2
    Join Date
    Sep 2008
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    Yes, they will lock your account or set massive (unrealistic) reserves.

    If you're selling a high risk product look into high risk merchants like CCBill, even if they market towards porn companies they're still usable on other high risk services.
    Jacob Wall

  3. #3
    Quote Originally Posted by Jacob Wall View Post
    Yes, they will lock your account or set massive (unrealistic) reserves.

    If you're selling a high risk product look into high risk merchants like CCBill, even if they market towards porn companies they're still usable on other high risk services.
    Do you happen to know if CCbill is offshore?

  4. #4
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    Quote Originally Posted by pk7677 View Post
    Do you happen to know if CCbill is offshore?
    They're based out of Tempe, AZ, USA.
    Jacob Wall

  5. #5
    Join Date
    Mar 2010
    Location
    Florida, USA
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    186
    I think we may be straying into two different issues here. Yes, the processor suggested may underwrite you, albeit at higher than expected fees which is consistent with the risk/reward axiom. But I do not think that means they will not impose penalties, including being shut down, if CBs become an issue. The fact is, the card associations themselves (Visa and MC) impose strict guidelines on their Acquiring institutions that mandate certain actions if chargebacks exceed certain threshholds. So what I'm saying here is: Don't confuse a processor willing to underwrite high risk merchants with processors that will tolerate higher than acceptable CB's. These are two separate and distinct issues. My suggestion to you is to take a more pro-active approach and solve the problem, don't just band-aid it. Take a good long look at your operation, determine why the chargebacks are occurring, than take steps to correct the problem. At the end of the day, a business plan that tolerates high chargebacks is not a viable business plan.

  6. #6
    Join Date
    Jun 2010
    Posts
    177
    It's typically 2 percent that a bank or processor sees a business isn't safe that they freeze an account. The underwriting bank takes the risk just like any other investor and that's the common limit they set for merchants.

    The only way to manage above that is with a third party who has low risk merchants and can load balance them to compensate for your much higher chargeback rates. Of course this isn't cheap because they know you're screwed.

    To blend a higher CH rate you might see 8-12 percent. It will just depend how much high CB you're asking them to take.
    Niles Bentley
    High risk merchant consultant
    Skype merchantservicetoday3

  7. #7
    Join Date
    Jul 2003
    Location
    Castle Pines, CO
    Posts
    7,189
    CCBill or Share-It / Digital River / Paypal (as an IPSP - Internet Payment Service Provider) might be a good alternative. It is not too often I recommend a third party payor, but usually with software downloads, it can always be a good idea.

    You might even take a look at the Quantum Gateway - they have a lot of security features to help you prevent chargebacks.

    CCBill is in Arizona - very nice people. I have met them a few times at an Adult webmaster convention actually. We went to dinner a few times as well and they are a pretty good company.

    A few years back when I met them, they were only doing adult membership based websites. They provided all the customer support, etc. Another gateway you might check out is 2000charge. They have relationships with banks all around the world and might have some options as well.

    Once thing though - don't go to the websites and sign up for their services. Do one at a time - otherwise, you might have to pay fees for either a contract, set-up fees, etc.

  8. #8
    Thanks for the reply every but I forgot to mention that I'm looking for offshore high risk merchant accounts.

  9. #9
    Join Date
    Jul 2003
    Location
    Castle Pines, CO
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    7,189
    2000charge might be able to help - they have relationships with many banks.

  10. #10
    Quote Originally Posted by pk7677 View Post
    I would like to know if you are selling high risk products online what will happen to you if your payment processor get too many charge backs? will they lock up your account?
    Yes, but the issue with CB's (not refunds) is generally caused by poor customer service. Do have a working CS Number on your descriptor?

  11. #11
    when you get too many charge backups, they might lock your account or set unrealistic reserves

  12. #12
    Quote Originally Posted by fcfpayments View Post
    Yes, but the issue with CB's (not refunds) is generally caused by poor customer service. Do have a working CS Number on your descriptor?
    In my experience, people who want to CB rarely will call the customer service number on the descriptor.

    I actually confirmed this further by ordering a second toll free number and using it in my invoices which I included with the product. This number would get far more calls.

    Also David is a coked out idiot who really has no idea what he's talking about. He's not a merchant, he's a broker.

  13. #13
    Just to clarify: David is right that good customer service will mitigate chargebacks. But he's out of touch if he thinks that sticking the number on the descriptor will solve all problems. You must be more proactive than that!

  14. #14
    Join Date
    Jan 2011
    Location
    India
    Posts
    1,453
    yesit will BAN you account and if these thing continues for long time you will loose your company profiles image as it will mark it as spam

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