What is Chargeback Insurance, and Why Do I Need It?

Jul 15, 2014

Chargebacks are dreaded occurrences in every business, especially high-risk businesses. Too many chargebacks can leave you without a merchant account provider, and unable to accept plastic card payments. Chargebacks are often discussed, but many may wonder what a chargeback is, and why they are so damaging to a company.

Chargebacks occur when a charge is disputed. The customer will contact their bank or card provider, and make a fraudulent complaint. The complaint is investigated, and if it is found to be true, the money will be refunded to the customer. It sounds easy, however with the refunded money comes a chargeback fee, which is also charged to the merchant. Chargeback fees are often what damages the merchant, as these fees can be up to 270% more than the fraudulent charge. Chargeback insurance is an option; however, there are few chargeback insurance providers. EMB is one of the few chargeback insurance providers, and we should be your first stop.

EMB, or eMerchantBroker.com, specializes in high-risk merchant accounts, as well as chargeback insurance. We know that high-risk companies are at a greater risk of losing their merchant account if they suffer too many chargebacks. The beauty of using EMB is that if you are happy with your merchant account provider, you can stay with them. We provide chargeback insurance for those who do not have merchant accounts with us, which is a rarity. While our chargeback insurance cannot eliminate 100% of chargebacks, we can alert you to them, so that you, and we, can investigate to make sure that it is truly a fraudulent charge and not just a customer who changed their mind. Our chargeback insurance can also help lessen the burden of chargeback fees. While the fees will still exist, you will be notified of them ahead of time, and even better, they will be reduced.

Chargeback insurance is rare; however, it is something that every merchant should have. EMB is one chargeback insurance provider that is dedicated to helping you and your high-risk company overcome the burden of chargebacks and their dreaded fees.

For more information, contact us today at 818-621-4893.

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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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