My Merchant Account Blog

Your Merchant Account Blog

Thursday, July 08, 2010

My Merchant Account Blog is also now Your Merchant Account Blog.  We wanted to let you know that this blog is not just mine, but yours as well.  All merchants need to understand merchant accounts and how they work.  So many providers add on extra fees that it might be worth looking into another processor, especially if you are with First Data (First Data Might Be Over Charging Merchants).  You can still reach the site with www.mymerchantaccountblog.com or www.yourmerchantaccountblog.com.

We hope that you find these posts useful when deciding to choose a merchant account provider, possibly an electronic payment gateway (Quantum Gateway is recommended), PCI DSS, how to prevent chargebacks, and much more!

E-Commerce Chargebacks and Its History

Thursday, July 01, 2010

Chargebacks can be divided into a few simple categories:

• Non Receipt of Goods or Services Chargeback Codes
• Authorization Error Codes for Chargebacks
• Fraud Codes for Chargebacks
• Non Receipt of Information Chargebacks
• Cancelled or Returned Chargeback Codes

Merchants are winning more chargebacks now than in the past.  This is due in part of the merchants adding more verification tools during the checkout process.  Chargebacks occur when the consumer contacts the issuing bank to ask for a refund.  When this happens, different issuing banks will do different things.  For example, American Express will usually always side with the consumer.  Barclay's will sometimes call the merchant to see what can be done before issuing a refund. 

On the rise though is friendly fraud - the customer orders the product and then says the product was not received.  Or maybe the child gets one of his parents credit card to order a product - especially downloadable products.  A downloadable product generally has a chargeback ratio of 0.6% while apparel is slightly higher.

Merchants though walk a tight line when trying to reduce their chargeback ratio.  Too many extras added to the checkout process could lessen sales.

So where is the line to protect merchants from losing their products and more money?   Try to contact the customer and see what the problem might be.  If the child used the parent's credit card, the parent might be willing to work with you to settle the debt.

You always want to dispute the chargeback - no matter what: Chargebacks Are Not Worth Fighting For.  If the merchant account provider sees that you are not fighting any chargebacks, you might run the risk of losing your merchant account.  In 2009, only about 53% of merchants fought against chargebacks.  And from that, only one third of the merchants accounted for 90% of the disputes.

Quantum Gateway

The Quantum Gateway is one of the few gateways on the market that offers a number of fraud prevention tools at no extra charge, from Verified by Visa (VBV) / MasterCard Secure Code (MSC), MaxMind - GeoIP, and DialVerify.  Implementing these procedures can greatly reduce a lot of the chargebacks.