This CB issue.

[Donnie Gangsta]

People who are really affected by this haven't really commented too heavily, and I'm really curious. BlueMedia's large thread about it had more amusement value than anything else, because of people to whom it didn't directly apply posting asinine bullshit.

Anyway, based on past precedent (strictly in my experience), a 1% CB threshold is very hard to maintain, whilst utilitizing some of the more aggressive marketing techniques that have came in vogue in the past two years. Granted, I do feel that it is possible for a site which follows a simple flat rate membership model, or even a per trial model with proper customer support can stay below this arbitrary threshold.

After looking at major sponsors/programs throughout the day -- basically, in order to borrow ideas about customer support/pricing structures/etc -- I've noticed that most use cross sales of some sort or another. The only major program that pays a reasonable amount per sign up that doesn't, so I saw after looking at a few, is ARS (At least sponsors who use Epoch). CEN has cross sales on their forms, but they're unchecked by default.. Anyway, the point is that cross sales and aggressive marketing strategies have resulted in very large profit margins, and the ability to honestly pay very high sign up rates and profit sometimes even after the first month (Prior to them being introduced/fully utilized, it would take at the very least 2-3 months to become profitable off a sale)

So, anyway, with all the rambling, all I'm really wondering is how people are planning on being under the threshold?

I'm sure people are going to respond with "I'm at .30 percent, so I'm fine", etc, etc. And, maybe you are. But for companies and individuals using the traditional membership model: A trial membership that converts to $40~, recurring monthly, what are you all planning to do? It's relatively easy to stay below 2.5%, but 1% is a completely different story. I have very little fraudulent transactions, and still have a problem with it.

Also, another question that should be addressed in a public form to get multiple opinions is this: What exactly is the point of an ISPS for those who have the minimum volume required in order for international banks to take your processing business?

We all know the point originally -- Umbrella protection and an outsource for those who can't afford their own support and such (Although, It seems KK's 'economies of scale' model from the previous post on this issue would actually come into play for independent merchants who can justify the fixed cost of hiring a support staff)

But now, with each individual responsible for maintaing their own ratios -- why does one still willingly give a very large percentage of their profits away to another company? The processing company will say that you are at great risk of losing your account on your own, telling you horror stories of people losing their fortunes, having their URLs blacklisted, etc, etc. (The only examples I can think of to whom this happened were very fraudulent/not very customer friendly: e.g. Babenet or Porncash)

So, does anyone have any real opinions on this subject?

So to sum up -- Two questions:

How are high volume sites plaining on getting below 1% (Losing cross sales, better members areas, different billing models, etc)?

What is the point of ISPSs now that each site owner is responsible for his own (very low) chargeback ratios?

[Mutt]

none really that i can see. as soon as VISA started registering people using IPSPs it didn't make sense to me anymore why somebody would use 3rd party processing. Most of the third party processors also provide gateway/fraud scrub/ etc for people with their own merchant accounts.

[quiet]

hmm

[Brown Bear]

I'd say we'll see:

1) The end to cross sales (or at least pre-checked cross sale boxes on the sign-up page)

2) The proper cancelation process will be played up more to members (more visible links to cancel pages, instruction emails to users about how to cancel, etc...)

3) Better members areas. No more sites where all you find is a few softcore picture sets from 3 years ago. Sites will have to offer serious value or else face the wrath of the chargebackers.

[Wizzo]

Originally posted by Brown Bear
I'd say we'll see:

1) The end to cross sales (or at least pre-checked cross sale boxes on the sign-up page)

Pre-checked Cross sales tend to lower the %, because they raise the number of transactions...

[woodman]

bs. the percentage of cb's for cross sell transactions is higher than just normal joins. It is a numbers game to merchants and processors because you have to continually increase transactions to smooth the cb ratio. Hence, people push the envelope until it reaches a breaking point.

[Brown Bear]

Originally posted by Wizzo


Pre-checked Cross sales tend to lower the %, because they raise the number of transactions...

but it's a transaction that is more likely to generate a CB, especially from the sites that use small text next to the pre-checked box. sign up to xxx fantasy girls too?

[WendyB]

Is is not often I see a serious topic adult webmaster topic being introduced here on GFY.

I believe the points you raised should be of concern to all adult webmasters, even if they are not effected directly, today. Crap has a history of running downhill in this industry, and when a big boy gets hit... the little guys are left picking up the pieces.

[Kimmykim]

Cross sells are not necessarily higher chargeback transactions.

And none of the IPSPs have announced a specific policy as of yet in light of this rule have they?

[wizz]

[QUOTE]Originally posted by Donnie Gangsta

Anyway, based on past precedent (strictly in my experience), a 1% CB threshold is very hard to maintain, whilst utilitizing some of the more aggressive marketing techniques that have came in vogue in the past two years. Granted, I do feel that it is possible for a site which follows a simple flat rate membership model, or even a per trial model with proper customer support can stay below this arbitrary threshold.


So, does anyone have any real opinions on this subject?

So to sum up -- Two questions:

How are high volume sites plaining on getting below 1% (Losing cross sales, better members areas, different billing models, etc)?


We have been helping clients with chargeback problems for some time now. None of our clients have ratios over 1% and if your paysite is operating ethically -- canceling accounts when
customers request it, disclosing that transactions are recurring, and making cross-selling very obvious -- there is no reason for chargebacks to be above 1%.

We have clients that go some months with 0 chargebacks. These aren't tiny sites either. Just last month, one of our 2000 member sites had 0 MasterCard chargebacks. Their Visa ratio was 0.5%. When our clients do get chargebacks, we call the cardholders and ask them what the problem was.

Usually they just forgot about the charge and we convince them to drop the chargeback.

We work with the clients, making contact with them trying to find out what happened.

[Jizar II]

Originally posted by wizz
When our clients do get chargebacks, we call the cardholders and ask them what the problem was.

Usually they just forgot about the charge and we convince them to drop the chargeback. [/B]

Can you drop a CB? When you know about the CB, isn't it too late to do anything except getting the cost of it covered?

[EscortBiz]

[QUOTE]Originally posted by wizz

Originally posted by Donnie Gangsta

Anyway, based on past precedent (strictly in my experience), a 1% CB threshold is very hard to maintain, whilst utilitizing some of the more aggressive marketing techniques that have came in vogue in the past two years. Granted, I do feel that it is possible for a site which follows a simple flat rate membership model, or even a per trial model with proper customer support can stay below this arbitrary threshold.


So, does anyone have any real opinions on this subject?

So to sum up -- Two questions:

How are high volume sites plaining on getting below 1% (Losing cross sales, better members areas, different billing models, etc)?


We have been helping clients with chargeback problems for some time now. None of our clients have ratios over 1% and if your paysite is operating ethically -- canceling accounts when
customers request it, disclosing that transactions are recurring, and making cross-selling very obvious -- there is no reason for chargebacks to be above 1%.

We have clients that go some months with 0 chargebacks. These aren't tiny sites either. Just last month, one of our 2000 member sites had 0 MasterCard chargebacks. Their Visa ratio was 0.5%. When our clients do get chargebacks, we call the cardholders and ask them what the problem was.

Usually they just forgot about the charge and we convince them to drop the chargeback.

We work with the clients, making contact with them trying to find out what happened.

Some of what you said makes me think you are on some serious drugs

[CarolCox]

Our historic chargeback ratio is 0.51%. We have never had a month in over 7years of processing where our chargeback ratio hit 1%

The main reason, I believe, is good customer service. We have e-mail, Instant Messaging, and a customer support 1-800 number that people can call with comments, complaints or cancellations.

We also never promise what we don't have, and back up the front-end sales pitches with members areas with substance.

By putting a little effort into your site, and your support, it's easy to maintain a CB ratio of under 1%

[EscortBiz]

Originally posted by CarolCox
Our historic chargeback ratio is 0.51%. We have never had a month in over 7years of processing where our chargeback ratio hit 1%

The main reason, I believe, is good customer service. We have e-mail, Instant Messaging, and a customer support 1-800 number that people can call with comments, complaints or cancellations.

We also never promise what we don't have, and back up the front-end sales pitches with members areas with substance.

By putting a little effort into your site, and your support, it's easy to maintain a CB ratio of under 1%

exactly

[wizz]

Originally posted by Jizar II


Can you drop a CB? When you know about the CB, isn't it too late to do anything except getting the cost of it covered?

Jizar,

we work with merchant accounts. Below the explanation.

For reducing US-based chargebacks, we start by looking for a positive AVS & CVV2 response. If you've received a Visa chargeback with reason code 461 or a MasterCard chargeback with reason code 537, that should be enough for the acquiring bank to re-present the chargeback to the issuing bank. Of course, some acquiring banks will not act on this information, but others will. Before we take on any client, we have them send a registered letter to their acquiring bank to get a formal copy of the chargeback re-presentment procedures. We adapt our process to fit the specific acquiring bank of our client.

We don't stop there, however. For banks that don't accept AVS/CVV2 as proof, we contact the customer directly and we ask them to drop the chargeback and obtain a refund directly from us, the merchant. This approach frequently works. Again, depending on the merchant bank, we get the customer to send us an e-mail with his driver's license number as confirmation or, if the bank won't take that as proof of a customer's intent to drop a chargeback, we send the customer a pre-filled auth form by mail that he needs to sign and return to us. Once we get that, we send it to the merchant bank.

If we fail to reverse the chargeback due to the customer being uncooperative, we proceed with collection activity to recover the amount chargedback plus the chargeback fee. We start with letters from our in-house collection agency and we progress to registered letters from an attorney's office. Hope this clears things up about our process for chargebacks.


Victoria

[Hind]

Originally posted by EscortBiz


Some of what you said makes me think you are on some serious drugs

Shut up asshole... go live in a settlement in Israel where you belong.

Now, on a serious note, CB's can be reversed... it's just an awful amount of paperwork to do, believe me... so the idea of a company handling the whole process for you sounds interesting for me

[Donnie Gangsta]

Alas, I was naive to think that a serious thread could gain significant attention here.

[cash69]

Originally posted by CarolCox
Our historic chargeback ratio is 0.51%. We have never had a month in over 7years of processing where our chargeback ratio hit 1%

The main reason, I believe, is good customer service. We have e-mail, Instant Messaging, and a customer support 1-800 number that people can call with comments, complaints or cancellations.

We also never promise what we don't have, and back up the front-end sales pitches with members areas with substance.

By putting a little effort into your site, and your support, it's easy to maintain a CB ratio of under 1%

yes.. but you have an affiliate program right? What if some fucker signs up.. uses stolen credit cards and does 20 sales to try to get some money.. your fucked.. this is like taking a huge gamble.. or your going to have to personally know every webmaster and make sure they aren't doing any sneaky shit..

[Backov]

Donnie,

The people that realize what this change means have already either said their piece in other threads, or they are busting their asses to fix their shit.

This is going to be a big one.