Dear Ben, > There is no way for a merchant to avoid chargebacks if a > sale is done over the internet.
There is no way to avoid all chargebacks, certainly. That is true, however, whether the sale is done via Internet or at a storefront. > The credit card companies simply don't work that way. Correct. Credit card merchant accounts are a pretty poor deal for the merchants. They pay 5% (more with Amex) and a per item fee, plus a monthly fee, plus equipment rental or software licenses, and any charges that are reversed get sucked straight out of the merchant's bank account, no matter how much damage that does to his business. It can lead to utter disaster. So, why do merchants do it? Quite simple: customers demand it. There is a huge amount of money available to merchants who provide credit card services for the convenience of their customers. > The only way for a merchant to have protection (as when a > physically stolen card is used in a real world store) is by > having the supposed customer's signature and a swipe > impression of the card. Neither of these things protects against a stolen card. All charges against a card that is reported stolen can be reversed. The merchant is screwed, unless he is paying too much for insurance, in which case he has already been screwed by the insurance vendor, and is a little less screwed by the stolen credit card charges being reversed. > All a credit card customer needs to do is dispute a charge, > and it will be reversed. Largely true. That's true in the storefront world as well as on the Internet. However, it is much harder to dispute some charges. Try disputing charges with a major corporation when you are just an individual, and you'll find that there is an entirely different standard at play. > As there is no real way of disputing it (short of somehow > getting the card holder to own-up to the charges) there is no > way for the merchant to reverse the claims. There is no certainty that any appeal will be answered. A merchant can appeal any reversed charge, but it is a headache and three kinds of hassle, and usually fails. >If you can find some way around this there are literally tens of >thousands of merchants who have been burned through online and >telephone sales and would like details. Yes. There are, of course, ways to limit the risk to the merchant. If you go to PlanetGold, I think you can find there an interview with Graham Kelly from some months ago. In that interview, Graham mentions a $20,000 credit card order for, I seem to recall, evocash. So, Graham sent a private investigator around to verify the card holder really placed that order. Or perhaps called the cardholder. In any event, Graham sees a trivial percentage of chargebacks, and he does accept credit card orders sometimes from some individuals according to the interview. Regards, Jim http://www.goldbarterholdings.com/ --- You are currently subscribed to e-gold-list as: [email protected] To unsubscribe send a blank email to [EMAIL PROTECTED] Use e-gold's Secure Randomized Keyboard (SRK) when accessing your e-gold account(s) via the web and shopping cart interfaces to help thwart keystroke loggers and common viruses.
