I know this has been asked a million times and I've read through a ton of threads but wanted to get some opinions on this for our specific needs.
We are a small online business that stocks our own products and are growing quickly. We have a verified business account with PayPal and pay 2.2% (I think it is) and for the most part, despite being PP, we're pretty happy with them. However, it's come to our attention that their Seller Protection Policy has a time limit requirement on shipping out orders within 7 days in order to be protected (this is in addition to shipping to a confirmed address). Our problem is, sometimes we have to back order items that can take up to 2 to 3 weeks for shipment and although the person must agree to our terms and conditions at checkout (explaining that back orders can take up to 4 weeks), we're very concerned that if we ship an $800 order for example on day 8, that PayPal will reverse the payment on us even though we proved it was shipped to their confirmed address (and all their other requirements, i.e. signature over $250, U.S.A., etc.). The other problem we have is that PayPal doesn't limit the buyer's time to decide if they want their money back, and can make a complaint 6 months down the road.
So to the question: Can anyone recommend a comparable, or the closest to, an online merchant account that will work with us on our needs (i.e. our shipping terms and conditions on back orders). We, at this point, don't want to be paying over $25 a month for a merchant if possible. We've also thought about simply refunding people their money explaining that when it came in they could pay then; however, some items are custom ordered and we might not be able to resell it should they change their mind.
I should add that we talked to PayPal directly on the phone and one person told us they wouldn't reverse it, while another person said they would, which is not the gray area we'd like to gamble on. Their policy is very clear which is what we need to on. Thanks.
Welll you are looking at spending about $20.00 or month in statement, customer service, and gateway fees. Most merchant account processors usually have a $25.00 monthly minimum on processing fees - but if you are doing over $1,200 a month - you will meet that monthly minimum & have nothing to worry about.
And since you are based in the United States it seems - you have a number of options available to you.
I take it that being that you qualified for the Merchant Rate from PayPal, that you are:
a) processing more than $1,000 per month; or
b) had a comparable rate from a valid merchant
Either way, one thing that I noticed in your post to be incorrect was you said PayPal doesn't limit the amount of time in which the consumer can decide whether they want their money back or not. While actually, they do. I know from experiences of being ripped off. I believe it was 30 days, but I can't remember. I can check if you are interested.
Being that you are located in the USA, I would highly recommend you give Chris at CDGCommerce a buzz as he has helped many a times with certain situations and people on this forum.
They also offer great rates for WHT members (http://www.cdgcommerce.com). Chris goes by CDGCOMMERCE on this forum, so perhaps send him a PM.
One suggestion for you, BlueCat, with whatever merchant account you select... you may want to think about doing a "pre-auth" and just authorizing your sales upfront... and then capturing the funds on the day that you ship.
Most gateways should support that type of setup and all merchant processors support that functionality.
Lastly, regarding your concern about the monthly minimums - that is a very valid concern when you are just getting things rolling so you may want to find a merchant processor that doesn't require that or who can waive it for your account.
The other thing to ask about is what downgrade fees apply. Some processors have a three-tier program with qualified, mid-qualified and non-qualified. Others have two and how they group transactions into them can have a huge impact on your total cost.
You'll also want to ask about what reporting, merchant, technical and customer support is provided and how... as well as the company's policies on risk management and chargebacks.
Best of luck with your search for the right processor for your needs!
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Check out Corey as well. I have been using him for a number of months now, referred many family, friends and business associates over to him. I know he is seen as the underdog in this forum but I am very pleased that I gave him a chance. He has even allowed his programmers to be outsourced by us since they understood what we needed. And he did not charge us an arm and leg either (much to the dismay of his business partner). And he actually is able to use Payflow, Linkpoint, or authorize.net gateways.
As far as chargebacks - the company that he resells for mails me a retrieval notice. I have only had 3 chargebacks due to the great scrubbing provided by Linkpoint and VBV. The retrieval notice request I refund the client first. If I do this, there is no chargeback. I can also try to fight it but as we all have learned, fighting a chargeback is usually not worth it and I can find other ways to spend my time.
Thanks the topguy for the recommendation here and all the others as well.
The pre-auth is a good idea, but depending on the issuing bank, your pre-auth might be good for 3 business days and as much as 30 business days. Also if you do do pre-auths, request the processor to lower your transaction rate with the gateway. Most gateways charge everytime you hit the gateway & since you will be hitting the gateway twice for every transaction, the pre-auth & post-auth/sale.
Originally posted by VanHost Either way, one thing that I noticed in your post to be incorrect was you said PayPal doesn't limit the amount of time in which the consumer can decide whether they want their money back or not. While actually, they do. I know from experiences of being ripped off. I believe it was 30 days, but I can't remember. I can check if you are interested.
First, thanks for all the quick responses; it's greatly appreciated. A couple of things: We do between $3,000 and $4,000 per month in sales but aniticipate in about a year we'll be doing 4 to 5 times that (or at least that's the plan, lol).
But also Vanhost, thanks for the advice as well. But PayPal did reverse, or I should say tried, took a complaint from a customer who waited 95 days to make his complaint. I had 3 days to respond with a tracking number or it was to be reversed. The guy knew what he was doing because when I logged into my FedEx to retrieve the tracking number, I learned they they only keep the numbers available to you (online anyway) for 90 days. So we had to do some digging through paperwork to get it. But it was also shipped on day 2, so I won. But I've read through their policy quite thoroughly, and I believe it said they can make complaints "several months after the sale." If you could confirm this, I'd be greatly appreciative, because it could ease a little of our concern (although we will be getting a real merchant account very soon).
Bluecat - To touch base on what you said, I believe that if they made the payment with funds that were already in their PayPal account, they have 30 days.
However, if they used their credit card to fund their account, they "could" have upto 3-6 months to dispute it with their credit card company. In turn, PayPal does not like to lose money, who does? So they would chargeback the funds from the account that received the money.