Your Best Defense Against Chargebacks | Merchant Chargeback Protection

Feb 29, 2016

For card-not-present merchants, chargebacks are a persistent, frustrating and costly reality. Chargebacks quickly chip away at a merchant’s bottom line. Even though the issuing bank is typically the party responsible for repaying the cardholder in most card-present transactions, it is the merchant that is responsible for card-not-present transactions.

One of the biggest problems with chargebacks is the gap of time between the transaction itself and when the consumer actually receives their purchase. As a result, card-not-present transactions tend to rack up a lot of service-related chargebacks. In 58% of all instances, merchants are actually being left out of the dispute process; they are never notified of the pending dispute and are helpless and unable to defend themselves against the initial chargeback. According to cardnotpresent.com, “While card brands tolerate chargebacks up to 1 percent of sales, for many businesses, that 1 percent amounts to high dollar losses”.

In truth, chargebacks can create up to 270% of lost money on a single chargeback. This means if a business suffers a $100 chargeback, it may be required to pay up to $270 in fees. This is where the need for merchant chargeback protection is so important to a business’ growth and success.

“Chargeback data can lead merchants to the specific steps necessary to reduce their chargebacks,” says Lisa Tennant, vice president of Business Operations at Verifi.

Securing chargeback protection services, like EMB’s Chargeback Shield program, allows a merchant to be notified and act immediately, allowing the merchant to save funds from being returned on invalid claims. No longer stuck on the sidelines, the merchant becomes a pivotal part of the chargeback process.

The benefits of preventing chargebacks for your business include:

  • A reduction in chargeback fee losses
  • Reduced labor costs and time involved in responding to chargebacks
  • Improvements in both fraud prevention and customer service processes
  • And increased revenue retention

Through EMB’s partnership with Chargebacks 911, merchants can also secure merchant chargeback insurance. This service has many benefits for merchants, including: dynamic loss prevention, guaranteed return on investment (ROI), affiliate fraud detection, friendly fraud prevention, fully customized disputes and quick chargeback resolutions and response. If you are tired of chargebacks eating away at your wallet, consider what EMB’s merchant chargeback insurance and merchant chargeback protection services can do for your business.

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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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