Apart from other flaws you have a very basic problem with the math. Read Epochs post on how CB ratios are (currently - bound to change as it's far too open to abuse) calculated.

oh and 100 (mostly well written posts too - rare but nice) :)

cool tupac is alive

Tipsy please explain I don't understand your post
are you saying people are way over 3% chargebacks right now?

by the way the tupac comment was off a signature, didn't see it on tv or anything.

Unless lack of sleep has made me fuddled CB ratios are not done on dollar amount (or at least not from Oct) but on transaction so price does not come into play when working out CB %.

dude, you're only talking about cb fines. but the main issue is that you will risk losing your visa processing permanently, if you are simply unable stay either under 1% or 100 cbs a month.

that would include all new signups, and all your rebills. period. ie: end of your business.

I guess all I am saying is this
Take the average money you make per month now
then when the ruling takes affect add up all of your charge back fees.

Take the extra fees divide it by what you make for the month.

What would that % be of lost income
is it 3% maybe 5%?

You can just up the monthly price 3% or 5% to offset the new losses your company didn't deal with before.

All I am saying is just add up what you are really losing in chargebacks every month from this $100 fee. Add up all of the $100 fees and see how big of a piece of the pie of your total gross earnings it is, I am just guessing it won't change your life or be the end of the world, just find another twist or way to get another 3% back somehow. So many angles to the paysite business, find a way to increase 3% through other angles.

Ok I missed the part about losing your business forever
if that is the case then it's important to stay below the 1%

I'm sorry fm but i still disagree with you.

100 $1 trials
40 converted members
140 transactions

then suppose that one of those members charges back. *if* he charges back both of them (which is not always the case) then you have a 1.42% cb ratio

if he charges back only the recurring transaction you have a .7% cb ratio

if you do free trials you have:
40 converted members
40 transactions

then supposed that one of those members charges back. you have 1 transaction chargeback. which leaves you with a 2.5% chargeback rate.

Now amplify those numbers times hundreds or thousands... bottom line is that you cant argue with math. free trials result in a higher chargeback % regardless of the fines involved.

a) Have we done this in past history? No
b) Would we consider creating a small site that previews our paysites and do a $1.95 non recurring 2 day membership on this teaser site to keep an insurance policy on our program and protect our affiliates recurring? Yes I believe we would. I think if we do it a certain way the affiliates in our program will side with our decisions.

Hooper, your math is a little biased. You need to factor in the fact that in your example 60 more people have a charge on their cc statement on the paid trial as opposed to the free trial. Some how you assume that non of those people will chargeback that is simply not a valid assumption. Also, the other 40 people on the paid trials have 2 charges on their statment.

Well, I took the afternoon off yesterday... and I got to this post in this thread, and decided to stop and make a comment.

Of anything that's been said here so far in my reading, this is the most true statement and what concerns me the most. For many reasons.

Hooper is right.

medhat.

chargebacks on the trials themselves are virtually nonexistant.

you could charge people $1.00 every single month for the rest of their life even if you didnt get their permission to bill them at all and your cb ratio would likely still be compliant.

Thank you KK - I have been forward numerous emails from Webmasters that display that this is going on and I have forwarded these emails to many large programs that pay by this model.

Hooper are you aware that Medhat is the CECash tech that handles most of CE's credit card activity and lives and breathes statisitics?

kush2 I'm sure you have handled more than the tens of miilions of dollars that CECash's tech, Medhat has and have so much more practical experience than him :)

FM what great advertising exposure.

That big banner, 150 posts Free Trials in your title

Gotta be worth $5000 at least wouldnt you say...

:Graucho

You, along with every other program owner, are aware of the situation that resellers bring to the table. Yes, they mean more signups and more volume, but they tremendously lower the profit margin -- not simply because of the payouts but due to the enormous costs incurred by every per click or per signup program and how they choose to implement and run their fraud screening procedures.

The bottom line as I see it (and perhaps this will piss off some people) is that resellers need to be held accountable for their actions just like sponsor programs are.

Every day on a board, and sometimes many boards, you see claims of sponsors stealing from resellers. Do sponsors steal? Of course. A small percentage of sponsors steal, there is no doubt about it. However that same small percentage applies to resellers and consumers.

Let's say for instance that the percentage of theft is 3%... that would mean that 3% of sponsors steal, 3% of webmasters cheat, and 3% of surfers fraudulently charge back. Of course that figure isn't a true one, I'm using it for an example before anyone asks me how I arrived at that figure.

Now let's look at how many sponsors there are... what 500? 1000? that actually do any significant volume... that makes a finite number of somewhere between 15 and 30 cheating sponsors. How many resellers are there? 20000? 50000? That would mean between 600 and 1200 cheating resellers. Not great numbers when we look at them now are they?

What do these cheaters cost this industry?

They hurt everyone in it. They drive up the costs that programs and processors incur in order to attempt to prevent their cheating. They are the equivalent of shoplifters in a department store -- EVERYONE who shops there pays the price for shrinkage.

My personal thoughts on this situation are very very simple. Finding a solution isn't rocket science, not by any means. Numbers will tell the true story and I think that every sponsor program out there should be looking at their numbers, very closely, on a case by case basis.

Good resellers should be rewarded, and bad ones should be terminated.

Every program will need to decide what their definition of a bad reseller is, there may not be a way to make a standard... but the bottom line is easy to figure out. If the chaff isn't culled from the wheat, there sure as shit won't be any bread when Visa and MC are done with us.

This is the smartest fucking thing I've heard all week. Alot of the other sponsors are willing to fuck webmasters out of the $10 that they are shaving off the join price. They aren't taking any hit whatsoever, we are, do the math. Instead they should be reviewing these very things that fanstasyman outlined.

It also looks like Maxcash will not be changing payouts.

Quote from their forum:

"Yes, we are aware of everything going on. With that said...
There are no intentions to lower payouts currently."

Maybe I have just woken up - But I do not really understand this - Surely, the same can apply to getting paid $30-$40 per free trial?

What Kimmykim said puts a lot into perspective - X3% webmasters' programmes and X3% webmasters being bent - The figures can really build up against a programme -

If a sponsor is lowering their rebill price then payouts have to be lowered. It is basic math.

You are taking a $10 hit yes, but the sponsor is taking a hit on each and every rebill compared to their old rebill price.

The same does not apply - why would a Webmaster use their own credit card to be charged $49.95 to make $55 - there is no economy there. Furthermore, long ago CECash installed fraud protection filters to pick up this type of abuse. :)

Marc De I will be in Vegas by 4pm today - staying at 4 Seasons - if you'd like to hook up while I'm there for an impromptu meeting leave me a message at the 4 Seasons :)

Webmasters don't forget - CECash has a three tiered Webmaster referral program that pays 5%, 3% and 1% to refer Webmasters to CECash - take advantage of this money making opportunity!!

peace out!

Ron,

This is great news coming from your camp.

The funny thing is all the guys who tell you that you are done and need to retire, are now racing around and trying to figure how they are going to stay in business.

All the while, you guys will continue to push forward and not break stride..


Continued success dude. :thumbsup

yes, it is quite humorous how they are all scrambling and running damage control because of their own actions :)