Sep 22

One of the most common questions I hear from business owners who are NOT my clients, is how to handle chargeback disputes.

For those of you who have never experienced this problem, it’s when a customer asks their credit card company to overturn a charge.  As a business owner, this typically means that you lost the merchandise you sold, along with the money from the sale.

Quite simply, the purchase price gets taken out of your account.  And often without a notice or warning from your credit card processing company.  Now that’s a problem.

So what can you do to stop this from happening to you?

Well, here’s a short list of tips to safeguard your merchant account, and your hard-earned money.

To begin with, never accept a credit card payment through email.  You might think this is an obvious tip, but believe it or not, some merchants have actually processed payments when receiving credit card info through non-secure channels.

And that’s a serious problem.

You have to understand that the only people likely to send credit card info through email are the very same people who don’t care if the credit card info is stolen.  And that’s because, more likely than not, it’s NOT their card in the first place

As you can well imagine, the main reason for a chargeback request is fraud (real or imagined).  So if something doesn’t feel right to you, or seems out of the ordinary, be on the lookout.

The second tip to protect yourself from chargebacks involves keeping good records.  What do I mean by “good records?”

Well, as an example, maybe you have a long time client, or maybe you have a “virtual practice” and most of your customers or clients simply call in their credit card info in for you to process.  So you take down their number and either key in transactions on a credit card terminal, or use a virtual terminal.

In either case, if a chargeback dispute arose, you’d have to prove that the charge was valid.  And that means having their signature on file.

So how can you protect yourself?

Quite simply, by having and using a credit card authorization form.  If you don’t have a shopping cart to accept payments directly from your website, try having a PDF document that is easily downloadable.  Or you could simply email or fax a blank copy to your prospective customer or client prior and have them fill it out and return to you prior to accepting their payment.

But we’re not finished yet.

Once your customer’s credit card info in entered into your system and the transaction clears, you’ll want to white out (or completely darken) the first 12 numbers of their credit card number.  Then make a copy, keep the copy on file for at least 3 years, and shred the original document.

Why go to all the trouble?

The reason is simple.  You need to safeguard your customer’s information at all times.  You need their signature on file to protect yourself from chargeback, but you need to remain compliant with PCI standards of security.

So go the extra step to retain a copy of your customer’s signature on file in the event of a chargeback, but delete all but the last 4 numbers of their credit card info to protect your customer’s information.

In part 2 of this article, we’ll cover some more tips to protect yourself and your account from chargebacks.

[Ask] [del.icio.us] [Digg] [Facebook] [Google] [LinkedIn] [Propeller] [StumbleUpon] [Technorati] [Twitter] [Yahoo!] [Email] More »
Sep 17

I just completed an audit for a CPA friend of mine (actually, one of his clients) –

by the way, for those of you who missed the 1 hour Tele-Seminar on “3 Big Mistakes Your Clients Make When Setting Up a Merchant Account,” I now have the audio available for download… just check out the Products page.

- and it got me thinking about some of the times in the past when business owners I was referred to didn’t express and interest in having an audit performed.  It always came as a surprise to me… until, of course, one of my clients had a “phony” audit completed (just read the last post).

Anyway, that got me thinking about the “standard” excuses heard over the years.  So I decided to come up with three (3) of the more common objections to address. In no particular order, here they are…

1.  “It’ll take too much time.”

Actually, it takes me some time to complete them.  Sometimes over an hour for 1 audit (depending on how transparent the particular company’s statement is).  And in the past I didn’t even charge for doing them (though I do now).

Anyhow, don’t tell me it takes too much time to track down your statement.  If you can’t find the darn thing and you don’t have internet access to your account, make a mental note to save it when the next month’s statement shows up.  Let’s be real about this.

2.  “My CPA can’t even read the stupid statement.”

All right, now we’re talking.  This one is actually true some of the time.  Another version of this excuse goes along the lines of “my CPA has it somewhere” in his office, or “I’ll have to call him to find it.”  Well then, give a call.  He or she can get a copy and send it right on over to me already.

Or, let him or her know that we’ll be running another tele-seminar so they can learn a bit about how it all works out, so you don’t overpay in the future.

Here’s another option.  Have them send over the statement and let me break it all down in black and white for them.  When I’m finished I’ll send over a detailed report that will spell out all the actual costs and proposed cost savings.

3.  “Yeah, I’ve had that done before.”

Well, to answer this one, see the previous post.  There is a REAL DIFFERENCE between throwing some numbers on a page to try to make a sale, and using real numbers from the statement to try to save you money each month, and hopefully win your business long-term.

And that’s the real difference.  Before you sign up with someone, or even AFTER you’ve signed up with someone, is your vendor committed to YOUR long term growth?  Are they looking for a “quick sale” and then you never hear from them again?

Those are just 2 issues to consider the next time someone asks for your business, and the next time you decide to do a REAL “apple to apple” comparison.  If you’re gonna do it, do it right.

Ok, I guess that’s it for now.  Until next time…

[Ask] [del.icio.us] [Digg] [Facebook] [Google] [LinkedIn] [Propeller] [StumbleUpon] [Technorati] [Twitter] [Yahoo!] [Email] More »
Sep 12

Let me just jump right in and share with you a story that became the inspiration for this post. A local retail merchant (who owns a comic book store) has been a client of mine for over a year and a half.

About a month or two ago he called to let me know that “someone” walked into his business and said they could save him money on his credit card processing fees.  Okay, that’s no surprise.  Lots of sales reps go door to door looking for new business.

But, here’s the thing. He wanted to remain my client, and he asked if I could possibly match the rates they were showing him.  Well, sure, that is certainly fair enough.  I just let him know that I needed to see what their terms were in order to conduct an “apples to apples” comparison.

That worked out with him, so the next day I stopped by and picked up their ”analysis.”  And it took all of 5 minutes to see what they were really “proposing” to him (and, by the way, why I became so hopping mad).  Now, I won’t tell you the name of the company using this tactic, because, to be fair, it is more common than you can imagine.

For starters, they misrepresented his actual costs. On the “worksheet” they indicated that I was charging him 50 cents per transaction (it’s 16 cents). They also misrepresented his actual processing rates, and failed to disclose additional “surcharges” (he doesn’t pay any surcharges with me).  Additionally, for those of you who may not know this, there are actually several different pricing models possible for an account, which will affect what you’ll pay for each processing category.

So I looked at Mike, and said “I’d be glad to increase your rates if you like me to match what they’ve shown you here.” Needless to say, when I compared their “analysis” to his existing processing statement, that’s when he became mad. 

Needless to say, we didn’t need to make ANY changes to his account. And if he had switched over, instead of saving $150 per year, which they were “projecting” he would have ended up paying 250% more than he currently was as an existing client.

So what’s the moral to the story?

Well, if someone comes along and performs and “audit” of your account, make sure the numbers, rates and fees they say you’re currently paying match your existing merchant statement. If they say you’re paying $400 a month, check your statement to see whether or not that’s accurate. If they can’t get that right, they are overinflating your projected savings to “steal” your account. Period.

It’s a question of integrity, plain and simple.

For example, I’m completing an audit for a possible new client.  In the “Total Fees” column listing the rates they’re currently paying MATCHES EXACTLY with the amount shown on their current merchant statement. And that’s the quickest way to check to know what kind of person you’re dealing with. So don’t get fooled.

On a related note, I’m getting ready to release a video showing, in concrete terms, just what I’m talking about here.  So stay tuned, since a picture is worth a thousand words.