Chargebacks are not 100% Avoidable, but They Can Be Reduced

Nov 23, 2015

Chargebacks are the Grinch of the processing industry. However, unlike the holiday cartoon, chargebacks never turn into a nice creature. They wreak havoc on businesses big and small, old and new, profitable and struggling. Most existing merchants have experienced a chargeback, or at least the threat of a chargeback, at some time. While chargebacks are not 100% avoidable (unless you operate a “Cash Only” business”), there are things that you can do to limit their damage.

First off, if you are an online merchant, make sure that the shipping and billing addresses match – or are at least similar. If the shipping address is in Latvia and the billing address in Louisiana, this should raise a flag. You should also always ask for a phone number; in fact, make it mandatory that a buyer give a phone number and email address. If neither respond to a request for additional information, you can hold the shipment. However, fraudsters will typically not do business with businesses that ask for this information.

Every processor has its own protocol for dealing with chargebacks. Be sure to follow that protocol. It is also wise to be familiar with that protocol before a chargeback occurs. When signing up with a merchant account provider, ask about their chargeback process. A reputable and experienced provider will be upfront with you with their chargeback process. Another tip is to look for a processor that is also a chargeback protection provider. Chargeback prevention can help you better understand the chargeback process because you are directly involved in every step. The process can be lengthy, but it is important that merchants are kept abreast of the situation. Chargeback Protection can also help you learn if the charge is legitimate or not. Without this option, you are not alerted to any option, other than to accept or deny the charge. You go into the process blind, which is bad for yourself and the entire processing industry.

A chargeback can ruin a business, but there are ways to help combat the situation. Be sure to monitor your sales, and invest in chargeback protection. The time it take to apply will be well worth it once a chargeback hits.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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