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  | AVOIDING CHARGEBACKS Ebook | |
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 | |  | | E-book Category: How To
E-book Title: AVOIDING CHARGEBACKS
Author:
Book Description: Dear Fellow Internet Vendor,
If you have just started selling over the internet and need to avoid the sharp corners before you approach them, or are an experienced merchant that already takes credit card payments and is already being burnt by expensive charges, then this will be the most precious thing you ever read.
You must avoid throwing money away to cheaters and liars
Here's the story:
John Acme is an online merchant. Through his websites he sells electrical goods to the public. With a merchant account and a credit card processor, John is able to offer potential customers an easy way by which they can order his goods. His business is new, but he is seeing a regular profit that allows him to meet his living expenses.
One day, John opens his mail and finds a letter labeled "Retrieval Notice" from the provider of his merchant account. The notice references a specific transaction and requests a copy of the sales documentation. Acme finds this odd, as the transaction had seemed to go off without a hitch when it was processed weeks before.
Well guess what?
John Acme may not yet realize it, but he is looking at a costly situation. He has already sent the goods to his buyer and has already accepted the payment he received. His response to the retrieval notice will determine whether or not he will be allowed to "keep" the sale at all. If he fails to provide the proper documentation, he will receive a chargeback. The money he earned will be deducted from his merchant account and he will never see the goods he already shipped again.
Countless merchants have found their business efforts completely thwarted by frequent chargebacks.
The proverbial deck is stacked against him. Merchants are assumed to be "in the wrong" whenever a customer requests a chargeback. If John's efforts fall short of what is required, he will lose the chargeback argument and find himself charged additional fees on top of losing the sale.
Any customer of yours at any time can call their Credit Card company and request a chargeback. Ask your Credit Card company and you will see that it is true!
Chargebacks are a margin killer. Consider the scenario of John Acme and his electrical goods sales site. Each plasma TV retails for $1,000. The cost to Acme for a TV is $500, resulting in a profit of $500 per TV. John has additional operating expenses of $2,000 per month. Acme sells 20 TVs per month. So, Acme clears $10,000 per month. If Acme's operating expenses are taken into account, his total cost of doing business is $7,000 ($5,000 for widgets plus $2,000 in other costs). He makes a profit of $3,000 per month, on which he relies of living expenses.
If Acme suffers two chargebacks in a month, he loses the $2,000 in sales after already purchasing the TVs. His profit is now all the way down to $1,000. Two chargebacks would crush Acme's ability to pay rent, buy gas and eat. Acme may or may not recover the merchandise he's already sent out, but he will still not be able to profit from that until he processes orders for the next month. Two simple chargebacks can turn his sufficiently profitable business venture into an outright disaster.
Chargebacks are a potentially devastating force for any online merchant and must be treated seriously. Chargebacks and the fraud that is often their precursor are regular events in the world of online sales and they pose a huge risk to merchants of all types. More... | 
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