A Statement from CECASH - Processing Free Sign Ups
 

I have spoken with the owners of Trade News Corp/CECash and they have asked me to post the following statement.

CECASH will continue their Free Trial Sign Ups. Free Trial Sign Ups have never been a problem when they?re handled with the proper disclosure. CECASH has always used the proper disclosure and their chargeback rates are right in line with the current new processing parameters.

Here is a little explanation of why Free Trials ?help? keep chargebacks down when properly disclosed.

If you have 100 Free Trial sign ups, 60% cancel, you only put 40% of monthly members thru the banking system, or 40 transactions.

If you have 100 Paid Trial sign ups, 60% cancel, you process at total of 140% of transactions for trials and monthly members thru the banking system, or 140 transactions.

That?s 78% more transactions for paid trials than free trials put thru the banking system in a given month. This highly increases your exposure for chargebacks from the bank.

Another reason that CECash does not have a chargeback problem is because their are real cancel links in all members sections which make it very easy to cancel a membership, this has always been like this.

CECASH will not reduce their payouts.

Pay It Forward (PIF) continues to pay $20 for every free trial sign up with no deductions. It further pays $5 per recurring member, this pays you like an annuity. PIF also pays 40% of all dialer revenue.

Follow Me Free (FMF) continues to pay $55 for every active member sign up. FMF also pays 40% of all dialer revenue.

Follow Me Free Partners (FMFP) continues to pay 60% or $25.47 for every sign up and $25.47 for every recurring monthly member. This is a very lofty payout. If a member stays for 3 months you make $76.41!!!!

CEMag and XXXAllAccessPass continue to pay the highest payout available for any email program!!

CEMag pays $1.50 per confirmed email, $15 per upsell, $5 per outside upsell, and 50% of all dialer revenue!!

XXXAllAccessPass pays $1.30 per confirmed email, no deductions, $15 per upsell and 50% of all dialer revenue!!

During this time of transition in the industry, it?s nice to know CECash can maintain the same payouts as always!!

peace out!

nice to hear but dont you think it will be hard to keep the payouts on your email program the same. Many sponsors you would send traffic to our lowering payouts won't that put a dent on your bottom line

My ears are surely open.

Almost 75% of all sign ups generated by the email programs are from CECash paysites, the other 25% should be pretty insignificant. So this shouldn't impact the mailer program's payout at all.

I just went to the CE board looking for a statement from you FM.

Thanks for coming here to post this.

That is the most ridiculous nonsense I have ever heard ron. (is this really you? or did somebody hack your posting account?)

Chargebacks are based 100% on the number of transactions that charge back.

More transactions result in a lower chargeback level. Not a higher one.

100 Free trials. 60% cancel. Just ONE of the members charges back. You only have 40 actual transactions. So you're now over 2%.

100 $1 Trials. 60% cancel. 40 rebill. You now have 140 transactions. Just ONE of the members charges back. You now have a .6% cb ratio.

Hooper - it's not nonsense, it's a fact!! The more transactions you do, the more exposure in shear numbers of potential chargebacks!!

ROFLMAO :)

Let's see if CE still processes free trials come Dec 31st. Then I'll shut my yap

0wned by Hooper! :1orglaugh

Hrmmm

FM are you processing through your own merchant accounts?

Must be.

ok Hooper you are correct and FM is correct I can see boths views

When a trial comes in and converts that is 2 transactions. Usually a charge back surfer will charge back BOTH of these, hence having 2 transactions.

However

Free Trials are only 1 transaction charging back and MUCH lower total transaction count. So the ratio will be MUCH higher indeed.

The kicker here is the fact that surfers who signup to a TRIAL membership actually are putting down money right away, THUS less likely to charge back. If you are doing a FREE trial and FORGET your membership or as many surfers are "just dumb" and dont read the terms, they dont know that after the trial period you get charged $40

THUS MORE LIKELY TO charge back.

So Free Trials in the end are definately going to result to a higher charge back ratio. Just common sence here.

No matter what,we are getting fucked by the man..Its discrimination...:BangBang:

Every processor can come to this board with loads of statistical data to back up that free trials cause a higher rate of chargebacks that paid trials.

Better yet, it will be nice when this industry can see a day when trials as a whole are just GONE!!! I remember when $14.99 monthly memberships were worth well over $100 and now $39.99 monthlys from trials aren't even worth 1/2 of that :(

Unfortunately 'we' (and we is the key word) did this to ourselves.

Platinum Dave, everyone is entitles to their own opinion. We have done Free Trials since the beginnig in 1996, so I don't share your opinion. But then again if you try to cancel one of CECash's sites online it's easy. Have you ever tried to cancel with some of the other processors, it's next to impossible, that leads to high chargebacks more than anything. It's the #1 factor for chargebacks, tough cancellation procedures that make people fill out a bunch of goobly gook, CECash never did that.

All I know is my business, we are going to have to impliment about a dozen new changes to the way we do business to maintain a 1% charge back ratio over the long term. Its not only one thing like Customer support or easy quiting for the surfer that will maintain me under 1%.

and that is with us never touching a FREE TRIAL signup.

You must know a few tricks the rest of us dont to be able to keep up free trials for the time being I am going to bet.

Marc De you know better than anyone how difficult online cancellations are with 'some' processors, this is the #1 contributing factor to chargebacks.

If you don't believe me, try to cancel with them, you might be enlightened. So that statistical data you speak of is created by their own cancellation widgets, and I call them widgets because I've tried them myself, very frustrating.

If you advertise and disclose a Free Trial properly and make online cancellation easy, they do not increase chargebacks, they decrease them.

A paid trial which converts to a monthly membership creates 2 potential chargebacks instead of 1 - that's simple math!! Add to that the initial Paid sign up is exposure in itself, the probabiltiy increased dramatically.

PD - Visa and MC never said anything about getting rid of the free trial. In fact many mainstream companies have based their entire marketing structure around Free Trials including AOL.

If you're interested in processing shoot me an email at fm at ceash dot com

Think you spoke too soon, stay around and watch!!

Good luck fantasyman. If you can keep the free trials and still have your CB under 1%, I give you props! You must be running a hell of a tight ship over there.

Interesting perspectives. There is good logic in both arguments. I suppose that if the nature of the free trial is completely disclosed in a simple and easy-to-view manner (as is the 'cancel' button), it's completely possible for chargeback levels to remain low. It would also depend upon I suppose, the quality of the site too whether the user eventually decides to chargeback. A good site usually only warrants/gets a cancellation rather than a chargeback.

Mike33 you are correct!! Bingo!!!

CECash has full disclosure that pops up before a consumer can join, they must click 'yes' or 'no' and then a follow up email is sent.

CECash makes cancellations very easy.

Each CECash paysite has it's own unique member's section with niche content and spins out more broadly to include tons of content, the consumer gets value.

The chargeback problems have come from the following attributes.....

Poor disclosure

Multiple clicked box upsells, or hidden upsells

Non- user friendly cancellation procedures

Paysites with virtually no content, or thin content

Wait a minute. Are you seriously telling us that the free trial client for your program converts at 40% from free to $39.99? (or whatever price point your using, I havent looked). The freeloading trial guy right? riiiiiiighht .Cmon man, some of us have been around doing the paysite gig for a while. Come back with numbers that are for real.

FM - I agree... I do believe that a free trial that is properly disclosed and no 'games' are played can keep chargebacks under 1%

For those of us who have been infected with other issues we have to play the 'percentages' ...

The biggest problem I have with free trials is we continually teach our customer base that there is something for nothing. I hope to all hell you don't give your free trial members access to all your goodies and at least wait to unlock the really good stuff until they pay :)

David they actually rebill at $50 a month.

40% does seem awfully high to me, its hard to do that with paid trials.

And that's the crux of the problem really - too many people have been playing games for too long, and now it's coming back to bite us all in the butt.

Shap

Free Trials are not something that Visa or MC have ruled against. The processors are making these decisions. Other mainstream companies use the free trial as the key to their marketing model. A small company called AOL comes to mind, they've been blessed by the FTC after an investigation.

For that matter nobody told Paysites to lower their monthly subscription fees. Those doing that are doing it on their own accord because they probably don't have enough content to warrant their high prices.

The only reason others are lowering their Webmaster payouts is because they are no longer allowed to do 3 upsells!!!

Wake up and smell the coffee. You're not reading these threads to well. Read carefully, see what the processors are doing and see what the paysites are doing on their own.

Ron and Hooper,

You both have valid points. I have never been insdie one oh Hopoper's members area but I have in Rons' and I can tell you that there is more content than most sites could ever dream of having.

I never encourage the free trial model to any of our merchants unless they have extremely niche type sites with dedicated client bases. We have several that successfully offer free tirls and keep their chargebacks low and we have others that do not. A big factor as well is to steadily increase traffic/signups to offset chargebacks from a growing recurring database. This is very important.

I applaud both of your companies and programs.

Mitch

I'm smelling the coffee Ron. Don't take this personal. This isn't a personal attack. Everybody has to fight for their own survival. Especially when they haven't made their millions yet. This is our livelihood and I'm commenting on what i'm seeing. I do my homework. I watch what everyone is doing, who's processing with who etc.

If everybody was so squeeky clean there wouldn't be any need for any changes right? The fact they are making changes means there is a problem.

Marc thanx for agreeing :)

Let me tell you the biggest problem with Paid Trials, Webmaster Fraud!! I'm sure you know this. Anytime someone can sign up for $2.95 and get paid $30 to $40 there is huge chance that you will experience Webmaster Fraud. There is a ring of Webmasters that do this, they charge the Webmaster an additional $5 plus the price of each paid trial. They cancel but allow the paid trial to go thru. When their cancel isn't picked up in time by the processor and they get billed for a month, they chargeback. When a Webmaster enlists these folks and adds his own regular traffic to an account it's virtually impossible to pick up the fraud. That's why CECash will never do a paid trial program, can't track that type of fraud.

I was using those conversion rates as an example. CECash free trials convert as well as any paid trial.

If you use Pay It Forward it doesn't matter how many convert - you get paid $20 for EVERY free trial and $5 per recurring and 40% of all dialer revenue, so that's a moot point.

Shap here is your post in another thread - if this isn't a personal attack I'd hate to see one from you - you accuse of scams, shitty business models and say that's why everyone is screwed.

************************************************** *
posted by Shap
Nobdoy else will say but I will. CyberErotica, ARS, CEN, Silvercash and others have been running scams and questionable business practises for the past 6 years. They've done it to keep up and keep paying the top dollar to their partners. It was a shitty business model to begin with. All marketing no substance. Not one of these companies has a site worth what they charge. That's why we are all screwed right now.
************************************************** *

We haven't changed our Free Trial since 1996 and it's not a scam, nor a shitty business model and we haven't screwed anyone.

And - we're sqeaky clean and are not making any changes - so go attack someone else!

the word 'thru' always makes me think of college and my Literature professor going off on this girl about using the word 'thru' - I can remember her continuing on about it.

cheers.

hahaha

I know you haven't changed a thing Ron. I'm not saying you did. I'm referring to the others when I said they are changing things. I, like many others on this thread, am very surprised you are going ahead with Free Trials. The fact you don't have to change a thing in your business model makes CE look pretty damn good.


btw in that post i was attacking CE. Not Ron Levi. So as I said it's not a personal attack on you. I thought you sold CE?

Whenver you attack CE you attack me, I created it.

I did sell it and this is my last month as a consultant for them. But I'm sure they'll want me to do odds and ends from them. Also, CE is still my baby, even though I sold it, there will always be an allegiance I feel for it.

Understood.

Fantasy man, your da bomb bitch!, Great payouts for free trials and free lobster on xmas!!! what the fuck more do you want!?!?

Your examples are flawed there Hooper...

In Example 2, you are actually charging EVERYONE $1.... so right off the bat you have a chance of more chargebacks than in example one.

Also in Example 2, If Joe Deadbeat decides hes going to chargeback, he'll attempt to say he didn't authorize EITHER charge -- the $1 trial OR the rebill - thats 2 chargebacks for the price of one :2 cents:


[edit]... yet another example of why I should read the complete thread first no matter how tempted I am to quickly reply to a single post :)

Ok even if those numbers were hypothetical and wishful your premise that free trials convert as well as a paid trial is not the same statistic that we saw when we tried it.

Just on a common sense premise alone, I cannot see how an enduser who started at FREE and ended up with a $50.00 charge (not even considering whether the was a higher bill from cross sells) would not be a greater likelihood of a chargeback than a no trial or a paid trial client.

The payouts on your program combined with free trials and cross sells would seem to encourage the exact problem that got us here to begin with. If VISA were looking at your portfolio by dollar amount as well as transaction count and chargeback percentage, would you still be doing all of this?

SCORE doesnt have a chargeback problem, but that doesnt mean i wont be tempted to run some $1.95/2 day non recurring trials spread out during the month to give me insurance in the event of some calamity such as a hosting outage that cranks up the disgruntlement of the clientele. There will be abuse of the fact that VISA is just taking a transaction count and dividing chargebacks to get a %, its a loophole that I expect to be closed by VISA.