Chargebacks911: Why Banks Label Your Business “High-Risk” for Chargebacks

Chargebacks911 clarifies the traits that expose an online business to being branded “high risk” for chargebacks.

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Chargebacks 911

Understanding what puts you at risk for chargebacks allows you to implement measures that help control the number of chargebacks your business incurs

TAMPA BAY, FL (PRWEB) May 01, 2013

Online merchants have become increasingly aware of an issue that is affecting the livelihood of their business: chargebacks. (A chargeback occurs when a consumer disputes a charge on their credit/debit card.) Businesses that have a high percentage of chargebacks are considered to be “high-risk” by acquiring banks, resulting in hesitancy in granting a merchant account for that business. Chargebacks911, which handles chargeback disputes for online merchants, explains the cardinal rules that banks consider when determining a business’s risk factor.

The founder of Chargebacks911, Monica Eaton-Cardone, says that being at high risk for chargebacks can severely limit an online business, as too many chargebacks put online retailers in jeopardy of having their accounts closed, paying unnecessary fees and, in some extreme cases, losing their business. Some businesses are more prone to chargebacks than others, and banks analyze the traits of your business that may potentially jeopardize the bank’s reputation as an upstanding financial institution.

Characteristics that banks consider when labeling a business high-risk include:

●High-Risk/High-Chargebacks Payment Processing History. Your processing history will tell banks what they can expect from you. If you already have a payment processing history of high chargebacks and refunds, this will land your business in the high-risk pool. Having a terminated merchant account will also grant you a high-risk label.

●No Signature Payment Methods. Some payment methods are more high-risk than others, because they raise the risk factor of fraud or buyer’s remorse. Online merchants are typically considered to be high risk, because the cardholder is not present to sign the receipt for their credit card purchase. Since there is no signature required, it’s much easier to get away with a fraudulent, unauthorized purchase.

●Business in High-Risk Industry. If you own a business that has a long period of time between customer payment and delivery of goods, such as furniture sales or a travel agency, this fact will definitely raise your risk factor as well. The delay of delivered goods gives customers time to change their minds about their purchases and request chargebacks or refunds. (1)

While it’s possible to fall into multiple categories—one aspect of your business may raise your risk factor, while another may lower it—acquiring banks generally steer clear of high-risk merchants.

“Frequent chargebacks can indicate problems with a merchant’s quality of service, and the liability is too much for many banks to underwrite,” commented Eaton.

Eaton asserts that while chargebacks are a frustrating aspect of e-commerce sales, no merchant can expect to avoid chargebacks entirely.

“Chargebacks are an inevitable part of online sales,” said Eaton. “But understanding what puts you at risk for chargebacks allows you to implement measures that help control the number of chargebacks your business incurs.”

Although not every chargeback can be remedied, there is an answer, and many cases can be resolved without the loss of time and money—a solutions expert can assess the risk and handle costly chargeback disputes.

Chargebacks911 provides fast and reliable solutions that not only help recoup the loss of funds as a result of increasing chargebacks, but also help to curb future chargebacks so that merchants can retain processing abilities.

Chargebacks911 specializes in servicing merchants and the majority of banking institutions.

For more information, visit http://www.chargebacks911.com.

About Chargebacks911:

Co-founder Monica Eaton-Cardone established Chargebacks911 in 2012—out of necessity—after many years as a merchant struggling to find a solution to chargeback issues. Chargebacks911 was developed specifically for merchants to offer immediate aid through proprietary technology, and provides the necessary function that gives merchants the freedom to focus on their core competency and optimize their in-house skill set. Chargebacks911 specializes in servicing Internet merchants, and offers both response and resolution services for chargebacks and cardholder disputes. The company works with merchant clients to help them keep their dispute rates down and help retain their ability to accept credit cards. For more information, visit http://www.chargebacks911.com.

1.“Why Banks Label Your Business High Risk.” Blog.instabill.com. N.p., 9 May 2012. Web. 22 Apr. 2013. blog.instabill.com/why-banks-label-your-business-high-risk.


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  • Alyssa Kaplan
    JoTo PR
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