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Digg it UP - 27 Ways to Reduce Your Merchant Account Chargebacks
Goal setting has to be one of the most common phrases when setting out to gain more business. We all dislike the planning process that happens in large corporations. It seems that the goals are set and nothing really happens to fulfill them. The goals we need to set are goals for obtaining a number of business contacts that can lead to a business relationship. Goals for the number of contacts you need to make in order to gain one business relationship may vary from industry to industry. When working with professional sales staff, I find that some firms have a six to one ratio before a sale is made. In other cases it may be one hundred to one (which is fairly high). Your goals should state how many business relationships you want to form per business quarter. If you do it monthly, you may be setting yourself up for failure. In my business, the ratio is fairly high for consulting but fairly low for selling books. My goals may be to gain three new consulting contracts and sell 300 books. This goal is short-term and the results are easy to measure. If I know my ratio then I will also know how many me
10. If you are selling via a website, offering a liberal returns and guarantee policy ensures fewer customer complaints and therefore fewer chargebacks.
11. If an order's billing address and shipping address are different, consider contacting the customer for an explanation for the discrepancy.
12. Be proactive, by sending your customers e-mail notices regarding orders, shipping, etc. An informed customer is a happy customer.
13. If you process via a high volume merchant account you should consider purchasing fraud prevention software (do a search on that term, if you wish to locate and compare software offerings). Depending on the product, these can be very sophisticated, monitoring the risk of each transaction prior to processing to see whether it should be declined (examining things such as the IP address, email server & domain; validating the zip code; and comparing or "scrubbing" the data against lists of previously i
In part one of this series, we reviewed several uncommon interview preparation strategies that got us safely to the interviewer's door, well prepared to tackle the challenges that lay ahead. This article addresses small but effective strategies to employ from the point of office entry to the interview's conclusion.Waiting Room ReadingNow that you've arrived 15 minutes early, you have some time to kill. How do we normally spend this time? We usually read from the available periodicals on the waiting room table. But remember that we're covering the little details here. You should pay a little attention to the types of magazines you pick up in the waiting room. What if our magazines were placed out there to see which one you would pick up, perhaps trying to get a gauge on your interests? Many companies use a variety of personality assessment tactics to assist with their decision making processes.If you notice any material on the table on the company itself, then select that one to skim through. If not, try to stick to business or industry related periodicals. Your safest option is to bring
And, an excessive history of chargebacks may result in the disastrous consequence of losing your merchant account and your ability to accept credit cards.
So, it's obviously important to take prudent steps to minimize the occurrences of chargebacks - especially if your transaction volume is high.
The disputes are usually based on a customer's claim that he did not receive the product or service that he ordered from you; that what he did receive was somehow defective or not what he ordered; or that he did not in fact order anything at all from you.
The causes for such claims generally result from:
* Fraud . Someone other than the authorized cardholder used his card or the information associated with card. Claims for fraudulent use of a cardholder's card are especially common with internet and other 'card not present' transactions. Many billions of dollars of online transactions are the result of fraud annually.
* Customer Error . Again, this type of error is increasingly common for internet transactions, where the customer may not recall whether or not he purchased your product or service - especially if your website's name and the name he sees on his credit card statement don't match.
* Your Error . Your system for managing and tracking transactions - or your bookkeeping may be at fault.
* Bank Error . Banks do make mistakes - an unusually high number of them in fact - and you should keep a close watch on your merchant statements to minimize bank error.
With that in mind, here are 27 specific things you can do to reduce chargebacks against your merchant account .
1. The Address Verification System (AVS, for short) compares the customer's stated billing address with the address the credit card company has on file. If your 'customer' has stolen the credit card, he probably won't know the right billing address, so AVS is very useful in detecting fraudulent orders. Failure to use AVS will also result in higher discount rates on your transactions.
2. Be careful with orders from developing countries (e.g. former Eastern block countries), which have a higher than average rate of chargeback claims.
3. When processing in person, make sure that, if for some reason the swipe terminal isn't working or the credit card cannot be read, the card information is keyed in and that you make an imprint onto the sales receipt. In order to avoid a possible chargeback later, both the card's account number and its expiry date must show up on the receipt.
4. A common cause of customers' disputes for online sales is that they don't recognize the description of your company that appears on their monthly credit card statement. So make sure that description reflects your website's name - and include a toll-free number in their statement's description, so they can phone you if they have a problem.
5. For websites, make sure you provide a toll free phone number for customers to call, so they can hopefully resolve problems prior to instituting a dispute via the card company. And have a 'frequently asked questions' section on your site to further clarify issues that might otherwise lead to a complaint.
6. Be careful when accepting online orders if the customer uses a free email service - for if the card was stolen, his identity may be next to impossible to identify later. To be safe, you could ask him to confirm the sale by phone or fax.
7. Set up your shipping process so that the customer's signature is always collected when the product is delivered - and have the shipper forward you a copy of the signed acknowledgement or upon request.
8. A recent development in fraud control is the IVR terminal (www.voicestamps.com) which can record a customer's voice. If he later claims he didn't order your product or service, the voice verification is e-mailed to you so you can prove he did in fact make the order.
9. If you manually process transactions, but don't do so promptly, you may be hit with a chargeback for late presentment.
10. If you are selling via a website, offering a liberal returns and guarantee policy ensures fewer customer complaints and therefore fewer chargebacks.
11. If an order's billing address and shipping address are different, consider contacting the customer for an explanation for the discrepancy.
12. Be proactive, by sending your customers e-mail notices regarding orders, shipping, etc. An informed customer is a happy customer.
13. If you process via a high volume merchant account you should consider purchasing fraud prevention software (do a search on that term, if you wish to locate and compare software offerings). Depending on the product, these can be very sophisticated, monitoring the risk of each transaction prior to processing to see whether it should be declined (examining things such as the IP address, email server & domain; validating the zip code; and comparing or "scrubbing" the data against lists of previously id
China is an emerging market and after the trade mission by U.S. Treasury Secretary Henry Paulson and FED Chairman Ben Bernanke the opportunities for major U.S. businesses in China should expand. From manufacturing to technology and medical and financial, the opening of the door into China will continue the growth of the U.S. in that region.Just recently Citigroup (NYSE: C) acquired a major China based financial institution by the name of the Guangdong Bank, while Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS) continue to penetrate the region in all industries.They are not concentrating on Hong Kong, they are looking at the home of the 2008 Summer Olympics Beijing and the surrounding areas including Shanghai and Shenzhen. But the small to mid sized U.S. Manufacturers and Technology companies are being left out for the time being as major U.S. corporations have not fully penetrated the region.This presents a golden opportunity for small and mid sized U.S. businesses to expand into China as the opportunity is still vast. Once saturated by major U.S. business it may be extremely dif
* Customer Error . Again, this type of error is increasingly common for internet transactions, where the customer may not recall whether or not he purchased your product or service - especially if your website's name and the name he sees on his credit card statement don't match.
* Your Error . Your system for managing and tracking transactions - or your bookkeeping may be at fault.
* Bank Error . Banks do make mistakes - an unusually high number of them in fact - and you should keep a close watch on your merchant statements to minimize bank error.
With that in mind, here are 27 specific things you can do to reduce chargebacks against your merchant account .
1. The Address Verification System (AVS, for short) compares the customer's stated billing address with the address the credit card company has on file. If your 'customer' has stolen the credit card, he probably won't know the right billing address, so AVS is very useful in detecting fraudulent orders. Failure to use AVS will also result in higher discount rates on your transactions.
2. Be careful with orders from developing countries (e.g. former Eastern block countries), which have a higher than average rate of chargeback claims.
3. When processing in person, make sure that, if for some reason the swipe terminal isn't working or the credit card cannot be read, the card information is keyed in and that you make an imprint onto the sales receipt. In order to avoid a possible chargeback later, both the card's account number and its expiry date must show up on the receipt.
4. A common cause of customers' disputes for online sales is that they don't recognize the description of your company that appears on their monthly credit card statement. So make sure that description reflects your website's name - and include a toll-free number in their statement's description, so they can phone you if they have a problem.
5. For websites, make sure you provide a toll free phone number for customers to call, so they can hopefully resolve problems prior to instituting a dispute via the card company. And have a 'frequently asked questions' section on your site to further clarify issues that might otherwise lead to a complaint.
6. Be careful when accepting online orders if the customer uses a free email service - for if the card was stolen, his identity may be next to impossible to identify later. To be safe, you could ask him to confirm the sale by phone or fax.
7. Set up your shipping process so that the customer's signature is always collected when the product is delivered - and have the shipper forward you a copy of the signed acknowledgement or upon request.
8. A recent development in fraud control is the IVR terminal (www.voicestamps.com) which can record a customer's voice. If he later claims he didn't order your product or service, the voice verification is e-mailed to you so you can prove he did in fact make the order.
9. If you manually process transactions, but don't do so promptly, you may be hit with a chargeback for late presentment.
10. If you are selling via a website, offering a liberal returns and guarantee policy ensures fewer customer complaints and therefore fewer chargebacks.
11. If an order's billing address and shipping address are different, consider contacting the customer for an explanation for the discrepancy.
12. Be proactive, by sending your customers e-mail notices regarding orders, shipping, etc. An informed customer is a happy customer.
13. If you process via a high volume merchant account you should consider purchasing fraud prevention software (do a search on that term, if you wish to locate and compare software offerings). Depending on the product, these can be very sophisticated, monitoring the risk of each transaction prior to processing to see whether it should be declined (examining things such as the IP address, email server & domain; validating the zip code; and comparing or "scrubbing" the data against lists of previously i
One of the biggest challenges for Canadian company owners is obtaining business financing. As a first instinct, owners usually try to go to the bank hoping for a business loan or line of credit. They soon find that qualifying for bank financing is hard, as the bank will demand collateral and three years worth of financial statements. Although large companies can qualify for bank funding, most small and midsized companies can’t. However, small companies are not out of options. There are two alternatives.If the business sells goods or services to other businesses and your main challenge is that they need money to pay suppliers or employees, the solution could lie in using two little known financing products – invoice factoring and purchase order financing.Most small and midsized businesses have cash flow problems because clients take 30 to 60 days to pay their invoices. Although waiting to get paid is a standard business practice in Canada, it can wreak havoc on the company’s finances. Because, while waiting to get paid, business owners still have to pay employees and suppliers, who coincidental
2. Be careful with orders from developing countries (e.g. former Eastern block countries), which have a higher than average rate of chargeback claims.
3. When processing in person, make sure that, if for some reason the swipe terminal isn't working or the credit card cannot be read, the card information is keyed in and that you make an imprint onto the sales receipt. In order to avoid a possible chargeback later, both the card's account number and its expiry date must show up on the receipt.
4. A common cause of customers' disputes for online sales is that they don't recognize the description of your company that appears on their monthly credit card statement. So make sure that description reflects your website's name - and include a toll-free number in their statement's description, so they can phone you if they have a problem.
5. For websites, make sure you provide a toll free phone number for customers to call, so they can hopefully resolve problems prior to instituting a dispute via the card company. And have a 'frequently asked questions' section on your site to further clarify issues that might otherwise lead to a complaint.
6. Be careful when accepting online orders if the customer uses a free email service - for if the card was stolen, his identity may be next to impossible to identify later. To be safe, you could ask him to confirm the sale by phone or fax.
7. Set up your shipping process so that the customer's signature is always collected when the product is delivered - and have the shipper forward you a copy of the signed acknowledgement or upon request.
8. A recent development in fraud control is the IVR terminal (www.voicestamps.com) which can record a customer's voice. If he later claims he didn't order your product or service, the voice verification is e-mailed to you so you can prove he did in fact make the order.
9. If you manually process transactions, but don't do so promptly, you may be hit with a chargeback for late presentment.
10. If you are selling via a website, offering a liberal returns and guarantee policy ensures fewer customer complaints and therefore fewer chargebacks.
11. If an order's billing address and shipping address are different, consider contacting the customer for an explanation for the discrepancy.
12. Be proactive, by sending your customers e-mail notices regarding orders, shipping, etc. An informed customer is a happy customer.
13. If you process via a high volume merchant account you should consider purchasing fraud prevention software (do a search on that term, if you wish to locate and compare software offerings). Depending on the product, these can be very sophisticated, monitoring the risk of each transaction prior to processing to see whether it should be declined (examining things such as the IP address, email server & domain; validating the zip code; and comparing or "scrubbing" the data against lists of previously i
What is your firm’s first reaction to a recession? If you think that you should lie off the seemingly unnecessary staff, stop production, and institute a massive price cut, then think again. These, in fact, are ways to welcome the undesired recession in your business. Instead, consider gearing up and facing the tough times as if they are alternatively an opportunity to step up the success ladder and vanquish your competition. Bad times, if analyzed carefully, can be a tremendous opportunity for your business.A Time To ResearchRecession give you a much-sought time to research. Costs are dwindling and so are your expenses, so plan for the next stage. A downturn usually does not last forever. Sudden reversals are common, and you might suddenly need to act quickly in order to take advantage of such an opportunity. If you’ve laid the groundwork for such quick action, it is even easier to take. Use every bit of time you can now to make plans for the coming upturn. You can also increase your portfolio during the bad times. Just look for the opportunity.Reach OutIf possible, try to get
6. Be careful when accepting online orders if the customer uses a free email service - for if the card was stolen, his identity may be next to impossible to identify later. To be safe, you could ask him to confirm the sale by phone or fax.
7. Set up your shipping process so that the customer's signature is always collected when the product is delivered - and have the shipper forward you a copy of the signed acknowledgement or upon request.
8. A recent development in fraud control is the IVR terminal (www.voicestamps.com) which can record a customer's voice. If he later claims he didn't order your product or service, the voice verification is e-mailed to you so you can prove he did in fact make the order.
9. If you manually process transactions, but don't do so promptly, you may be hit with a chargeback for late presentment.
10. If you are selling via a website, offering a liberal returns and guarantee policy ensures fewer customer complaints and therefore fewer chargebacks.
11. If an order's billing address and shipping address are different, consider contacting the customer for an explanation for the discrepancy.
12. Be proactive, by sending your customers e-mail notices regarding orders, shipping, etc. An informed customer is a happy customer.
13. If you process via a high volume merchant account you should consider purchasing fraud prevention software (do a search on that term, if you wish to locate and compare software offerings). Depending on the product, these can be very sophisticated, monitoring the risk of each transaction prior to processing to see whether it should be declined (examining things such as the IP address, email server & domain; validating the zip code; and comparing or "scrubbing" the data against lists of previously i
Whistleblowing as we know it is not a development of the late 20th century. The council of the city-state of Venice instituted a form of whistleblowing to help fight corruption and to give citizens a more meaningful voice in their government.Employees or franchisees do come across acts of dishonesty, fraud, corruption, theft, and transactions in prohibited goods, violence, and damage to property or plain unethical behaviour. If such activity is reported, undesirable repercussions can be avoided.Illegal, Immoral or illegitimate practices ranging from under-reported sales to misappropriation or pilferage of stock or non-compliance can undermine an organisation and, in severe cases, severally erode its brand and reputation in the marketplace. SMEs are particularly vulnerable as they are less likely to be audited or to employ measures to detect and avoid such dishonest actions.In many cases, if classified information is available and whistleblowers protection guaranteed, financial losses might be lower – at least corrective action can be taken more swiftly. Fraudulent activity is more like
10. If you are selling via a website, offering a liberal returns and guarantee policy ensures fewer customer complaints and therefore fewer chargebacks.
11. If an order's billing address and shipping address are different, consider contacting the customer for an explanation for the discrepancy.
12. Be proactive, by sending your customers e-mail notices regarding orders, shipping, etc. An informed customer is a happy customer.
13. If you process via a high volume merchant account you should consider purchasing fraud prevention software (do a search on that term, if you wish to locate and compare software offerings). Depending on the product, these can be very sophisticated, monitoring the risk of each transaction prior to processing to see whether it should be declined (examining things such as the IP address, email server & domain; validating the zip code; and comparing or "scrubbing" the data against lists of previously identified fraudsters).
14. For manual processing and voice authorizations, always note the authorization number on the sales receipt.
15. If you takes orders with a credit card machine, you should always check the expiry date of the credit card, confirm that the card is signed and that the signature thereon matches that on your sales receipt. If there is not a match, require photo ID.
16. Implement a management system to flag suspicious transactions. Have a "to be checked" file and have your staff contact customers whose orders are flagged by the system. Reasons for flagging can include many of the items mentioned above, such as free email addresses; high dollar orders; international shipping addresses, etc.
17. For internet and phone/mail orders, if the purchaser is a new customer and the sales price is high, require a faxed copy of his credit card and his driver's license.
18. If you are selling over the Internet, place a warning on your transaction webpage stating that your site employs safeguards against fraud.
19. Be on the lookout for unusual ordering activity - including multiple orders of the same product, 'rush' orders, and the same cardholder making multiple orders within a very short time span.
20. Ensure that all the magnetic stripe or chip information required by the card processing company is actually being recorded. Also, compare the card's account number with the number printed out on the receipt. And check that the signature on the receipt matches that on the reverse side of the card.
21. Always get an authorization from the processing company. If your request for an authorization is denied, do not complete the transaction.
22. When you are concerned about the veracity of a cardholder's information, ask him for the phone number he supplied to his card company - and then call the company to verify it and call him as well, to ensure he is actually the cardholder and that he placed the order in question. You can also ask him to fax you a copy of his signature as well as the front and back of his credit card.
23. Shipping addresses containing only a P.O. Box are much higher risk than actual physical addresses.
24. For internet sales, always require the card's verification number (CVC2 and CVV2), which is the 3 digit number on the credit card's back side. According to Visa itself, this measure alone reduces chargebacks by over 25%.
25. Whenever a claim for a refund is made, and it has any merit - give the customer the refund. Doing so can significantly reduce chargebacks.
26. Disputes will happen, and when they do you will require all the appropriate documentation to support you - so make sure you store the documentation in a safe place and in an orderly fashion.
27. When a customer disputes a transaction you will receive an enquiry letter. Always respond to it within the stipulated time period. Your copies of face-to-face transactions must legibly display the card's account number, the date of the transaction and its amount, the card expiration date, your company's name and address, and the signature of your customer.
We also suggest you review the rules and suggestions for limiting chargebacks supplied by each of Visa, MasterCard, American Express, etc . These not only give you guidelines for preventing chargebacks, but will also detail the documentation and steps involved when disputes do arise - as they invariably will.
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