D-man

well of course -

Zebra

My Sig banner is almost as big as my dick

__________________
Old School

Xenophage

ohh yeah things are looking up

D-man

fantasyman

They make $25 to $100 a chargeback - so why would they not chargeback a $1 transaction - this is exactly why they will do two chargebacks for a 'paid trial' and a 'monthly membership' - hence a free trial is better ofr processing!!

quiet

agreed on both points.

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Mr.Fiction

What would your affiliates make on that, $1? If that's the future of adult, count me in!

psyko514

Hahaha... that's really funny.

I work for Visa. I personally write off dozens of charges monthly. If the charge is less than $25 and the same amount hasn't been charged before, then I write it off.

Example 1: $2.95 trial and $39.95 rebill. Trial will be written off.
Example 2: $19.95 first month and $19.95 rebill. Both will be disputed.

__________________

John3

\ran into you a few years back and always did like the way you think.

stay in touch, man.

__________________

Hook 'em.

fantasyman

If you work for Visa then you know that the banks, not Visa, generate chargebacks.

Chargebacks happen when the consumer calls their bank, not Visa. They say, I don't know what thess charges are, this is usually someone's wife or a guy who is trying to stay out of a divorce by denying he entered an Adult Site. When the bank looks up the charge, they say, you have another charge for $2.95, we should remove that from your bill as well, this generates two chargebacks.

Also, if you work for Visa you know that the bank who issues a chargeback gets about 80% of the chargeback fee. This is definitely incentiving the wrong entity.

I have been involved in credit card processing since 1986, in 1986 it was credit card processing for audiotext lines, in those days there was no such thing as a chargeback fee, or fines. The bank learned these bullsh-t billing practices from third party processors and they have taken it to new heights nowadays!

Ha ha, you're really funny

KRL

Let's just all go back to the good ole audiotext days. Things were so much simpler back then. All you had to do was master the CALL NOW part of the pitch and you were good to go.

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fantasyman

Amen!! In those days we placed ads in the Adult Books or bought commercial time on the small networks and watched the calls come in - the internet is a lot different. Oh the good ole days!!

KRL

Those phone sex call counts used to blow my mind. Then the mainstream progs that we ran TV spots for, oh mama, that was like going to Heaven every day.

Is the Van Nuys News Stand still there Ron? That guy used to carry all the good porn mags.

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psyko514

I work for TD Visa customer service. The Visa section of the bank.
When a TD Visa cardholder wishes to chargeback a transaction, they call me.
When I see a single charge of less then $25, I write it off.
The issuing bank does not get a cut of the fee. In fact, a chargeback costs the issuing bank an average of $25 (when you factor in things like employee salary, paperwork, potential loss of clientele, etc) which is why we write off charges less than $25.
On top of that, if the acquirer brings the charge to arbitration, the issuer could end up paying upwards of $500.

For the record, I have nothing but respect for you and what you've done in the industry. I push your programs. But if you doubt that I work for Visa, I'll make you the same offer I made Kimmykim when I first joined GFY: Feel free to call me tomorrow @ 1-800-9TD-VISA. Ask for Matthew at extension 23141. I'll be replacing a supervisor from 4pm to 12am EST.

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Theo

psyko514 is responsible for all the chargebacks in this industry. Let's "treat" him.

psyko514

actually, i've done my best to get my bank to reduce friendly fraud. slowly but surely, it's been working.

in fact, i remember annoucing here a while back i had busted a case of friendly fraud and you congratulated me.

__________________

KRL

So you work for Visa and market porn on the side. That's a paradox.

And I suppose your site is VisaGirlsLive.com

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Diamond Jim

It's still a chargeback....otherwise, $24.95 sites would have zero chargebacks....

You may work for Visa, but the dreaded envelopes that come in the mail are pretty clear about what a chargeback is...

psyko514

I was in the porn game before I worked for Visa.

Up until recently, the whole processing aspect of porn didn't concern me very much, so I never paid much to attention to Visa's role in online porn.

Then I stumbled across GFY in October in the middle of the $750 drama.

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psyko514

The $25 policy is at my bank. At some banks, it might be $10, $15 or $20.

A charge that gets written off by Visa is not treated as a chargeback. The merchant and acquirer is never aware of a written-off Visa charge.

Take Xpics or Netfill/N-biill for examples. Their chargeback ratio would have been double or more what it was if written-off charges were included.

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fantasyman

You obviously don't know the internal billing system for bank's chargeback fees, the issuing banks do receive money for this. I'm not trying to argue with you but McDermott, Will and Emery, one of the largest Law Firms in the world got this information from Visa for the GIA a couple years ago, it's not something that's publicized as proven by you not having that knowledge......

psyko514

Keep in mind I work for a Canadian bank and Visa Canada has different policies/procedures from Visa USA. I can assure you that issuing banks don't make money on chargebacks. We're encouraged to avoid them as much as possible.

The writing-off of smaller charges is still common practice at a lot of banks, Canadian or American. Do a test if you doubt that. Post a $5 charge and a $50 charge on your account. Dispute both. You'll see the $5 charge credited in less than a week. The $50 charge will take a few more weeks.

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Serge_Oprano

hmmm...what's wrong with you, Ron?
how 25% can be "insignificant"?

if 25% insignificant,
3 times insignificant is insignificant nad that's where your remaining 75% allegedly are...

somethign doesn't compute...

KRL

Just a note that FuckVisa.com dropped just recently and its still available if anyone wants to have some FUN!

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Theo

hehe i know :-)

John3

\personally, I'm favoring all of my anti-Acacia domains right now

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Hook 'em.

fantasyman

Serge as long as the payout doesn't change it's a moot point, and the payout won't change. That makes it CECash's problem, nobody elses. I don't think you even understand what we're talking about.



btw Sergiepoo - that was weak

HighRoller

I know the adult biz well, mostly 4free, and I belive in giving the surfer a good deal, but I am a big believer in the word free, it just pulls attention. I also believe in proper disclosures.

It would seem to me that it's obvious that people want to avoid chargebacks with the new ruling. if there were some way to intercept or get to the customers complaints before Visa does.

I am going to think about this, and come up with an idea

I enjoyed reading all of the posts.

fantasyman

Tell that to Larry Fox from McDermott, Will and Emery

I have already seen chargebacks on small amounts, so there is no reason for me to test that.

Since you admit Visa Canada has different policies than Visa Domestic, how are you sure American banks don't do this, I am very sure. Furthermore, American banks encourage chargebacks on Adult Sites because they make money on them.

We had a merchant account once, many moons ago, that was under a computer hardware category, it had no chargebacks. The bank uncovered the account and reclassified it, chargebacks flew in and we had to terminate the account. Domestic banks handle consumer complaints very differently when an accout is identified as a high risk, adult paysite account. So unless you have first hand knowledge of High Risk, Domestic, Adult merchant accounts don't assure anything about same.

Also, not trying to knock your job, but why do you think they would tell you they make money on chargebacks when all you do is customer service. There would be no reason for a bank to let any employee know they make money on chargebacks unles it was a high official at the bank. This information came to us directly from Visa thru Larry Fox.

fantasyman

We have explored this. The only way to intercept a customer complaint and sidestep the chargeback is to buy a bank and be the card issuing bank and the processing bank, otherwise ir goes in the Visa system.

HighRoller

Love your branded program Ron
my name is Ron also
Maybe I am reading these posts and stuff wrong, and I am sure this is shady, but sometimes rules seem weird to me.

If I understand this correctly.
As the chargebacks get too high over 1%

A chargeback will result in:

$100 fee to the paysite program owner
$25 awarded to the bank that charged back

paysite program owner obviously doesn't want to pay $100
Bank loves there $25 chargebacks

Why wouldn't the paysite owner pay off a bank $50, the bank
makes twice the bling bling, and the paysite program
owner saves 1/2 the money from a chargeback
only costing them $50.

I look at it like this, if a bank says we have to charge $25 cause we have paperwork, and employees blah blah, just say tell you what, charge me $50 and no one ever canceled with me, do we understand each other?

I'm sure that's a lot of banks and a dream, but you can see how money can talk.

fantasyman

The issuing bank gets 80% of the chargeback fee - so a $100 chargeback would yield $80 to the bank issuing the chargeback.

If you know a way to bribe all the banks in the USA, you definitely know more that I

btw, great name!! LOL

John3

Maybe I am slow, but I am still having trouble with the concept of reducing transaction volume to limit your chargeback exposure.

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Hook 'em.

HighRoller

Then Ron you need to bribe visa
tell visa hey $100 charge
you know the bank gets 80% of that so visa why let the bank hog it all, let's say these chargebacks get re-reversed, and I'll give you $50

HighRoller

How many months into the membership do most chargebacks occur?

HighRoller

I know I have heard mention of a master visa account
and also mention of the 1% affecting 1000 chargebacks or more

why not just have like 5 different visa merchant accounts
and when 1 account in the month gets around 900 chargebacks, then change to a different merchant account.
that way you never go over the 1000 quota on any of the accounts

I'm sure this would not work as they all go together into a master account

fantasyman

It's not to reduce transactions, it's to start out with fewer transactions to begin with.

If a free trial cancels, no processing is done with the bank for a free trial, hence no exposure. This way you only deal with monthly memberships of folks who already have seen the site and want to have a monthly membership.

If a paid trial cancels, each and every paid trial is processed with the bank, that's exposure and then you have the monthly tranactions as well.

fantasyman

If you ever tried to get a high risk merchant account you would understand why 5 merchant accounts would be difficult to get.

You need to submit full financials and sign personal guarantees. They would never issue a large volume of high risk merchant accounts to one individual.

HighRoller

I figure I have a good shot in this industry.

The name Ron can go far in this biz.

John3

ok, I am dense then.

That sounds completely bass-ackwards to me.

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Hook 'em.

HighRoller

If you do the math

$40 per month
100 signups

$4000 per month
1 chargeback extra $100

That's $100/$4000=2.5%
so on average everyone would agree
before they had to stay around 2% chargeback
and now they have to be at 1%.
On average then we have to pay
for 1 chargeback per 100 if we
were around 2% pace before, so
$100 per $4000 means 2.5% loss of
income over previous months, so
doesn't this almost seem insignificant
if you look at it this way? I mean
couldn't you just then take
$40/mo. multiply by 2.5% and
get $41. Charge the surfer $41 per month instead
and you will make up that first $100 per surfer you didn't
plan on. Basically adding $1 to the monthly dues
wipes away the chargebacks. Another way
to look at this is Banks have overdraft fees
let's say of $25 and if fraud is high and they have
to pay on stolen cards and they are higher than expected
then overdrafts to the customers goes up to $26 or $27
whatever they have to do.

I guess the way I see it is if people had to stay around 2.5%
and they remained at 2% and after this ruling with no program changes
they still are at 2% then they are 1% over what Visa allows, meaning
they paid for 1 chargeback fee $100 they didn't pay before, that's
that's 2.5% of the $4000 generated. Actually many go over 1 month for recurring
so that would make it less than 2.5% much less. The only reason I can see
it hurting someone is if they have just a ton of chargebacks.
Percentage wise though, unless I did the math wrong just seems like you add
$1 onto the monthly dues.

quiet

lol

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jojojo

But none of this BS applies to those with under 100 chargebacks per month right?

Congrats CECASH!

I thought that lowering the prices and the free trials were being enforced by visa...

The fact that a lot of sponsors are lowering their prices all of a sudden by $10/mth goes to show how they themselves KNEW the were overcharging surfers all along.

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fantasyman

Lowering the price is a decision made by the paysite owners.

Lowering the Webmaster payout is a decision made by paysite owners.

Doing away with Free Trials is the processor's decision.

All Visa did was lower the acceptable amount of chargebacks before chargeback fees and fines are issued.

Hope this helps - I'm going to sleep now -we'll pick this up tomorrow

nite all and peace out!

John3

what a load of crap

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Hook 'em.

HighRoller

I thought people were getting rid of free trials and lowering prices just hoping that they would get less chargebacks.
I am curious what the chargeback % is for most companies out there. I think if this is the case lowering your monthly dues from $40 down to $30, you are losing 25% in profits, you will lower webmasters payout, meaning they will go to another program like cecash that still pays well, so you lose a lot of your webmaster business. All of this just cause of a few chargebacks, unless I am wrong, are chargebacks % really big?

It sounds like the sudden panic and change in payouts, and lowered costs would cost more to the company, than a few $100 charge back fees.


$100 charge per 100 members =2 month average stay

$100 charge extra per 1% extra chargeback per 200 months of charges.

Just seems like a small % again unless your chargeback % is high like way over 2% there has to be a happy medium of the max you can charge a surfer and still get a lower chargeback %.

quiet

put the crack pipe down.

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John3

quiet, do you agree with FM?

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HighRoller

sorry don't know what your comment means
it makes perfect sense.

Theo

you don't hope when you do business,you do research