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Online business attracts more buyers each year. The internet has become a way to eliminate the costly overhead associated with retail store fronts. Internet sales are expected to rise by as much as 11 percent in 2009. With a greater number of merchandise being sold on the internet, businesses are more susceptible to fraud and chargebacks. There are ways to protect your profits in uncertain times.

Chargebacks were created as a form of protection for the consumer. The Federal Reserve created regulations guaranteeing card holders the right to a reversal. Various bank networks have their own corresponding rules. Initially, it would seem that a merchant would be more likely to provide quality products and speedy shipping if they had a threat of a chargeback or even having their merchant account turned off, however these rules are extremely one sided.

Continue reading "Are Chargebacks Fair Play or Fraud?"

To keep your chargeback ratio in check you have to take a proactive role. You can actually prevent chargebacks from escalating – and counting towards your monthly allotment.

The most common categories for chargebacks include point-of-sale errors, customer disputes, and fraud – and within these categories are a multitude of possible reasons. Understanding the reasons provides insight into how you can keep chargebacks in the “soft” phase from becoming full-blown chargebacks.

Let’s take a look at the possible remedies for common chargeback claims, along with the reason codes assigned by Visa and MasterCard. Continue reading "Remedies for Chargebacks"

While Visa and MasterCard don’t approve merchant accounts, they do hold all the cards – pardon the pun – when it comes to setting chargeback ratios.

Chargeback ratios are calculated by dividing your monthly sales by the number of chargebacks or the total dollar amount of the total chargebacks registered in any given month – or both. You can take proactive steps towards facilitating approval of your merchant account and receiving a fair chargeback ratio – which in general is 1%.

Make sure that you provide your bank with as much detailed and specific information as possible, including: Continue reading "Chargeback Ratios … the Unwritten Rules"