Web Hosting Talk : Web Hosting Main Forums : Ecommerce Hosting & Discussion : Are this many chargebacks ok or bad?

[Frosty]

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...

[Frosty]

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?

[cywkevin]

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

[Frosty]

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

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

[cdgcommerce]

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.

[dbbrock1]

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

[Reddrake]

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

Not sure about others.

[coight]

1 only This year!

3 attempts two we won

[Reddrake]

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

[Esr Tek]

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??

[Reddrake]

I believe all companys should incooperate a price freeze

[Esr Tek]

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?

[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.

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.

[Esr Tek]

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.

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.

[Frosty]

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?