Combatting Fraudulent Chargebacks (PLR)

• Download File Size - 1,374Kb
• eBook Format - PDF, DOC (source)
• Reading Requirements - Any PDF reader
• Number of Pages 29
• Release Date - 2009?
• Suggested Retail Price - $17.00

Product Summary

Chargebacks are a margin killer. Consider the scenario of John Acme and his electrical goods sales site. Each plasma TV retails for $1,000. The cost to Acme for a TV is $500, resulting in a profit of $500 per TV. John has additional operating expenses of $2,000 per month. Acme sells 20 TVs per month. So, Acme clears $10,000 per month. If Acme’s operating expenses are taken into account, his total cost of doing business is $7,000 ($5,000 for widgets plus $2,000 in other costs). He makes a profit of $3,000 per month, on which he relies of living expenses.

If Acme suffers two chargebacks in a month, he loses the $2,000 in sales after already purchasing the TVs. His profit is now all the way down to $1,000. Two chargebacks would crush Acme’s ability to pay rent, buy gas and eat. Acme may or may not recover the merchandise he’s already sent out, but he will still not be able to profit from that until he processes orders for the next month. Two simple chargebacks can turn his sufficiently profitable business venture into an outright disaster.

Chargebacks are a potentially devastating force for any online merchant and must be treated seriously. Chargebacks and the fraud that is often their precursor are regular events in the world of online sales and they pose a huge risk to merchants of all types.

Sounds scary, tell me more.....

• A chargeback occurs when the holder of a credit card disputes a billing entry. The card issuer contacts the merchant’s credit card processor and disputes the sale. The proceeds from the original sale are subtracted from the merchant’s account. There is an additional charge for the merchant to pay for a chargeback. In essence, a chargeback is a customer-driven refund conducted without the consent of the merchant.
• A recent report from IT research firm The Gartner Group indicates that approximately 15 percent of orders made on Web sites result in chargebacks. This means that if you are not protecting yourself by tactics describe in this ebook, then more than 1 out of 7 of your sales will result in a chargeback.
• There are many things that you can do NOW to protect yourself from chargebacks. In this report, you will find 19+ ways that you can put into effect NOW to protect yourself

Will I be affected by a chargeback?
ALL merchants at some time or another will be affected by chargebacks. It is virtually impossible to totally eliminate chargebacks. However, there are many definite steps which will significantly reduce the occurrence.

Will I be affected by chargebacks if I only accept payments through Paypal and/or Stormpay?
Almost definitely. If someone uses their credit card to pay you through Paypal or Stormpay, then they can easily ask their credit card company for a chargeback in the same way as usual.

Are chargebacks fair?
Chargebacks definitely are not fair to the merchant who has acted out of good faith. However, the power generally lies with the customer. The reason that this is so, is because although the merchant is charged 2-3% of the price of the goods, the credit card companies make their money out of the customers and not the merchants. If the customer does not pay their credit card bill, then they will be charged up to 2% of that money every single month! It is therefore in the interests of the credit card companies to look after the end-customers first.

How can I prevent chargebacks?
If you have been in business on the internet for a reasonable period of time, you will know how frustrating chargebacks can be. They are a violation of our rights to conduct business in a fair way. You probably write off up to 20% of your profit in reserve for when chargebacks will happen. You may lose even more than that to unsrupulous customers.

If you are fairly new on the internet and have not yet come up against a chargeback then trust me when I say that you do not want to. Not only are they expensive, but they are also a waste of time. You must start taking steps now to stop them from happening.


The internet created one of the most profitable professions on earth - Internet entrepreneurs. There are numerous ways for interpreneurs to earn a very good living online. You can sell physical and infomercial products, offer millions of services, sell ad space, start your own place to hang out, even create your own radio station....

The goal of this e-book is to let you know about the most dangerous internet scams and to help you avoid them. After all, when you become aware of these schemes, there is a good chance that you will not fall into the trap


Now Is The Time To Fight Back...

It is important that you are taking steps at all stages in your business to prevent chargebacks. This is before you have made the sale, whilst you are making the sale and also after the sale. The same rules apply to merchants whether they are selling physical goods or downloadable goods. You are not immune whether you are using a Credit Card Processor, Paypal or Stormpay!

Start to protect yourself today by finding out what these necessary steps are. $37 is a small investment to save yourself 100s if not 1000s of dollars during 2006.

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