Why you should watch your chargebacks

May 13, 2013 by admin

Article Written by : Manufacturing Strategy

Chargeback is the term used when a customer disputes a charge on her credit card bill. Generally, chargebacks will happen for one of several reasons:

• A clerical error, such as a customer being double-billed or being billed for an incorrect amount
• Customer dissatisfaction, such as not receiving a product or receiving a product different than what was paid for
• A customer not recognizing a purchase, especially if the merchant name that appears on her bill differs from the actual name of the store
• Fraud — when a customer claims she did not authorize a purchase or a purchase was made as a result of identity theft

For most transactions, customers have 120 days from the sale or when they discovered a problem with the product to dispute a charge.

The bottom line here is that whenever customers feel that they have been charged for something they shouldn’t have, they can file a dispute with their bank which begins the chargeback process. The entire process will be detailed in the next section, but it’s worth noting here that resolving these disputes can sometimes take more than two months — PayPal, for example, advises its merchants that the whole process can take up to 75 days. During this time, the revenue from the disputed sale is withheld from the merchant’s account.

Whenever a chargeback is initiated, a merchant will receive a code from its issuing bank that gives a reason for the dispute. Some of the most common Visa and MasterCard chargeback codes are listed below. Once a customer has disputed a charge, a merchant’s acquiring bank will begin going through a specific procedure to resolve the issue.

If a merchant has too many chargebacks that they loose, they could also use their merchant account and be placed on Terminated Merchant File (TMF), which means that they may not be able to open another merchant account under their own name.

read more

Alternatives to Merchant Accounts

Dec 4, 2012 by admin

Merchant accounts allow business owners to accept credit and debit cards to pay for transactions. Merchant accounts are not always easy to get, however. It may depend on the owner’s credit history or how much they have as a cash reserve. But there are alternatives to these merchant accounts where the requirements aren’t so harsh and the costs are not so expensive.

Physical checks are one alternative to merchant accounts. Whereas the requirements are a lot less than a merchant account, the fess may be slightly higher. When using a merchant account that accepts credit cards, the transaction goes through immediately. Checks do take about 3 or 4 business days to clear the bank. When accepting a check, be sure to compare the signature on the check and the signature on the customer’s driver’s license.

Another alternative is third party providers. The most popular third party provider is PayPal. With PayPal, credit card and debit card transactions can be performed with online and offline purchases. This is ideal for businesses with low numbers of transactions or for businesses who don’t want to deal with the complex issues of merchant accounts. Third party provides are also the lower of the cost options.

Money orders are not very common in the business place these days but there are still some who use them, especially when ordering online. This can be a slow process if you have an online business and a customer uses a money order. The customer has to mail the money order, which could take several days to reach you.

read more

How to Avoid Credit Card Chargebacks

Dec 4, 2012 by admin

This article submit by How To Accept Credit Cards Online.

A credit card chargeback no doubt hurts the owner of a business. Say a customer walks into your store and makes a purchase with their credit card. They take their merchandise and leave the store. Then they get their credit card statement and do not recognize the purchase. At that time, they contact their credit card company to dispute the charge.

After doing some investigating, the credit card company sides in favor of the customer and charges back the money they paid. For instance, if they paid $75 for an item, that money is charged back to their credit card and you lose out on that $75. While these chargebacks can be time consuming and costly for you, there are ways to avoid credit card chargebacks.

If the customer is making a large purchase or if you think fraud may be involved, do not hesitate to ask for photo identification such as drivers license. Be sure the person making the purchase is the same person in the driver’s license. Also be sure that the credit card is signed. If not, ask for another form of identification.

One of the reasons that a customer may dispute a transaction is because the purchase they made from you shows up as a different company name on their credit card statement. It would be worth using a DBA, or Doing Business As, name that the customer will recognize.

It is important that you keep copies of your receipt for a minimum of two years. That way, if ever a transaction is disputed, you will have the customers’ signed receipt.

read more

Merchant Account Basics You Should Know

Dec 4, 2012 by admin

Article Written by : Manufacturing Stoke
New business owners often believe that getting a merchant account can be confusing and a bit overwhelming. But there are three basics that you need to know before getting an account. You need to know what a merchant account is, who offers an account and how much it will cost.

Whether have you have a physical store or you run an e-commerce site, you will need to be able to process credit cards. Many people these days are using credit and debit cards more and more. They are more secure and more convenient than cash. You will need to open a merchant account with a bank or through an online service. Once you sign up for an account, you will be given the correct equipment or software to run the customer’s card through.

Basically a merchant account is a system where you are able to handle credit card or debit card transactions in real-time. It makes things easier for you because it takes just seconds for a transaction to be approved or rejected. There is a contract that will exist between you and the provider. It is important to read and understand the terms of the contract.

You can obtain a merchant account through several financial service institutions. You will find that quite a few people will use a bank as their provider because it is secure and reliable. However, banks do usually have tighter rules and a strict approval process. Another popular option is an internet service provider. There are literally hundreds of them so you need to find the best one for you.

read more

How to Reduce Your Merchant Account Fees

Nov 24, 2012 by admin

If you have your own business, you most likely know by now that when you open a merchant account to accept credit and debit cards at your place of business, there are several fees associated with this. The good news is that there are ways in which you can reduce these fees to save you money.

The best way to reduce your merchant account fees is to compare services and rates of several merchant providers. You don’t want to sign up with the first account you come across. You may find out that a company will get you to sign with them at a lower rate but this turns out to be a trial rate and in six months, your rate goes up to the regular pricing. Be sure that each provider discloses what your rates will be and if you will save any money.

You can lessen the minimum amount that you pay for processing fees if you are not processing a large volume of sales each month. As a general rule, if you have over $1,400 a month in transactions, the minimum processing fee heads to zero.

You want to avoid any monthly service plans at all costs. There are a good majority of processors that will try and push these monthly fees on your, especially the higher rated plans such as the Platinum plan. The fact is that these plans do not save the merchant any money. These plans are supposed to include things such as paper for the credit card terminals. What many merchants aren’t aware of is that paper is very inexpensive to being with,

By following these simple tips, you can save your business money when having a merchant account.

read more