Web Hosting Talk : Web Hosting Main Forums : Ecommerce Hosting & Discussion : Chargeback Fee

[Convergent]

Hi,

I'm looking into setting up a merchant account and want to know if a $25 chargeback fee is pretty standard? Some advertise it, and others don't. The ones that do tell me its from the credit card company and they don't have any control on it.

[Corey Bryant]

$25 is usually the standard. Some charge $10-15... A ot of processors though will issue a request for return before doing a charge back. This way - you do not have to pay the chargeback fee.

[eddy2099]

Yup, the chargeback fee is imposed by the bank and different banks do have different rates. Check with your provider on the actual fees structure prior to signing up so you are not caught unaware.

If you play your cards right, chargeback should not be a normal occurrence.

[cdgcommerce]

A chargeback fee around $25 is very standard. Acquiring banks and ISO's do have different costs and fees associated for that.

The goal, of course, is to make those fees far and few between.

So for most merchants, it is much more important to work out a good deal on the primary areas like the transaction fees, monthly costs and avoiding a lot of the common "pitfalls" like big termination/cancellation fees, monthly minimums and other such costs.

[simonsez]

14-25$ is standard and even higher for high risk offshore merchant accounts.

Mark

[nybble]

Does a mod have something aganst me? I could have sworn I have posted here and some other places but my posts seem to keep dropping off the board.

Like I said before(I think? maybe I was drunk?)
$25~ is the avg. rate for a chargeback but some companys don't charge as much (I don't know why) but http://www.pay-line.com has a $1 chargeback fee =\ while 2checkout has a $25 fee and paysystems $25 too I think, I am not going to write any more cause my posts seem to just drop off this board like a dead fly.

[Corey Bryant]

Their prices seem pretty high though, 4% discount rate & $1 transaction fee. Now if you are expecting to have a lot of chargebacks it might be worth using pay line, but I would like for a service that is somewhat cheaper.

[cdgcommerce]

Yep, I'd agree with that assessment!

Best thing is to always figure out what the biggest cost driver is going to be and look for a good solution in that area. The chargeback varies from one place to another, but realistically- how many chargebacks are you expecting to get?

Unlike discount rates, per trans fees, monthly fees and so forth... the hope is that you'll get very, very few chargebacks and so those fees won't matter much. And if you think you -will- get a lot, you may want to think about investing into some more advanced fraud scrubbing.

Because the cost of a chargeback is not just the chargeback fee but it is also a blemish on your merchant track record and if you have too many of them... your processing can be suspended by your 3rd party processor or even your merchant account provider.

[nybble]

pay-line is thinking about dropping their prices, and there aco****s may not be free forever, id grab an account while you can

I know they are strongly thinking about lowering prices for transactions under $10, I have seen some prices and they beat 2checkout/paypal/paysystems any day!

[GeorgeAtha]

May be I am missing something ..... you guys say that 4%+$1 is quite high ..... well, I have seen regnow on 21%, regsoft on 10%, 2CO is on 5.5% and a small flat fee .. why 4%+$1 is quite high . Please explain because on purchases higher than 80-90 bucks this first one is better, not talking for the higher amounts....... and please tell me what you are using.

Geo

[Corey Bryant]

If it is a third party processor, the charges are going to be a bit more expensive than having your own merchant account. The main problem with some of third part processors - they do not explain what it is or that their name (not yours) appears on the CC statement.

If you are processing steadily over $1,000 a month, consider a merchant account.

[GeorgeAtha]

ha ha ha ha, well, this is in case you are eligable to get one ... what do you do if you can not get a merchant account .... and you are not a US citizen?

and what are the charges from the merchant account compared to the ones discussed earlier in the thread?

Thank you in advance

Geo

[Corey Bryant]

Well it helps to know where you are. Have you checked out Paysystems? They support a lot of countries. As well as WorldPay, but I hear it is difficult to even get a sale call from them.

A US merchant account should be about 2.30% with a $0.35 cent transaction rate. If you have a presence in the US but no Social Security number, you are looking at a rate of about 3.50%. And there is a limit of $10,000 a month on some processors. A third party processor will usually hold your money for one week or two weeks as well to make a little off the float due to the security risks involved.

[otteporihs]

And by the way, can you tell me the charge back fee is charged to the merchant's account or the customer's account?

[Pay-Line.com]

The chargeback fee is posted to the vendor's account. Unfortunately it is always like that, the customers clain that this is not their problem and request all their money back, no matter that sometmes it is only their (customer's) fault.

That is life

Geo