How CNP Merchants can Better Process Visa & MasterCard
10. Chargebacks:
Chargebacks represent one of the worst ways a transaction can go awry. They are typically indicative of unscrupulous customers (fraud), dubious products, poor customer service or an inadequate cheap and reliable payment processor. Because Visa and MasterCard are concerned about these issues, they have imposed rules limiting a merchant’s percentage of allowed chargebacks to one percent (1%). When a merchant exceeds this threshold, they begin receiving fines. If the problem continues, the fines become hefty and the merchant can actually lose its right to process the cards. While we will treat fraud as a separate matter, it is valuable to discuss some of the other cases. In all of these remaining scenarios, payment processors can play a decisive role in keeping the merchant out of trouble.
Selling a dubious product? Well, you are not the first to make millions of dollars on the Internet selling hair growth tonic! Simply put, working with the proper payment processor can keep you in business. You may not like what the processor requires, but good processors are generally skilled at striking equilibrium between optimal sales and acceptable chargeback levels. The same goes for merchants selling good products with poor customer service. Processors can usually reduce frightening chargeback levels by suggesting changes in refund policies and other customer service processes. The merchant may not like the medicine, but it sure beats going out of business. Given these facts, choosing the right payment processor, can make the difference between life and death. If you have chargeback issues, choose a payment processor experienced in such matters or add on a third party, chargeback specialist such as Vindicia or Verifi. Always be truthful with your processor regarding your products, and customer service policies.
