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The 1% Difference: Reducing Chargebacks 2

The 1% Difference: Reducing Chargebacks 2

July 5, 2003
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" Every billing company provides a shield, an umbrella for adult sites to process money under. By accepting new accounts the IPSP agrees to take responsibility for what you are selling so they therefore have an earned right to place certain expectations on their merchants … "

It's easy to feel relaxed knowing that 99% of your customers are happy, but if 1 out of 100 customer’s have a complaint or can't remember what they did yesterday and charge back the transaction, you've got troubles. Here's what you can't control...

Fraud Happens
Fraud happens. Well, that’s nothing to brag about but it does happen, let’s admit it. People have found so many ways to undermine online merchants that regardless of what business you’re in, everyone has to deal with it.

I remember when I once pictured fraud as some guy in Russia with a list of credit card numbers leaning over his computer with a cig in one hand and a bottle of vodka at his feet typing in numbers in porn sites and hording content like a mad dog. These days my visual of fraud is more like a guy and a girl get drunk and there’s a computer and they decide to view some porn so she thinks she’s being cool when she offers to pay... but they end up being a one night stand and she’s pissed so she charges it back to Visa telling them “I didn’t do it!”.

I mean, how can you beat that??? “Sorry ma’am but the camera we implemented in your Visa card shows you looking at your card at the time of that transaction”. Nice dream. There are a million different situations where a customer could defraud or abuse a merchant with no chance of any repercussions. As Visa is known to side with the customer and makes bold claims for “protecting the customer” from fraud, merchants are left to wonder what protection is left for them.

Elements have recently been available to put into effect such as the CVV2 and “Verified by Visa” which require extra information; however this additional information has apparently yet to be taken into consideration when it comes to Visa issuing chargebacks. Why? Well consider that for Visa to fully investigate every claim the cost in resources and manpower alone would far outweigh what they would spend compared to what they earn in credits and chargeback fees and fines passed down to the merchant.

You can stress on your site that “Fraud and Abuse will be prosecuted” and use a script to display the user’s IP address before sending your traffic to any payment form. You can help to deter fraud if not completely prevent it. I would not recommend posting “Chargeback and we’ll beat you with a tire iron”, however sometimes less is more and subtly can get your point well enough across.

The Umbrella Unfolds
Every billing company provides a shield, an umbrella for adult sites to process money under. By accepting new accounts the IPSP agrees to take responsibility for what you are selling so they therefore have an earned right to place certain expectations on their merchants such as legal compliance including copyright and trademark laws as well as "2257" compliance, how the site is represented, and refusal to sell certain types of products, or to support certain delivery methods.

If a billing company gives you notice to change something about your site or lose your account, or will not approve you for any reason, listen to them regarding why and learn to come into compliance. Companies like PSW Billing Solutions are working hard every day to stay up to date and in compliance with Visa and other regulations to protect not only you but all of our online merchants.

Rather than claiming unfairness, learn why certain regulations are designed to work FOR you, and do business within those means as best you can. You will soon find that every requirement is designed to give your customers a pleasurable experience and you the merchant the protection that you need.

Ultimately we all can look around and learn from our Webmaster peers and see why so many have had long term success. These regulations, from content to billing, are designed to keep your site out of the red zone and in the black. WORK with your billing company if you are currently over the 1% acceptable rate NOW so that by October you are within proper range. Rather than waiting for the billing company to catch up with you, check out your stats, re read your support emails, and COMMUNICATE to your customer on your site giving them a personal and exceptional experience.

As there will always be one bad customer in the bunch, but don’t let that 1% ruin you. Research your stats, track your levels, provide incentive for those monthly memberships and make your customers feel like they are getting a desirable deal. Treat your adult site like a business and the more you work for it, the more it will work for you regardless of any bump Visa (or anyone else) decides to throw in the road.

We are the masters of the web, are we not? Now is time to become the masters of our sites of our customer’s satisfaction.

Cynthia "Cyndalie" Fanshaw is the Vice President of Marketing for PSWBilling.com. An established expert in search engine marketing, Cyndalie has over 5 years experience in the Internet industry and working with webmasters. For more information about PSW Billing Services please visit http://www.PSWBilling.com or contact Cyn@PSWBilling.com


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