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100k a month On merchant account AND IT WILL NOT SHUT DOWN!!!!!

Discussion in 'Business & Tax Advice' started by unitedsolutions, Sep 25, 2013.

  1. unitedsolutions

    unitedsolutions Registered Member

    Feb 21, 2013
    Likes Received:
    I have been in the industry for about 10 years now. My main focus is my coaching campaign (biz opp/real estate/etc), I do smaller things on the side (Merchant services/lead gen) and I just started getting into Pay per call.

    I have been through 8 merchant accounts (250k monthly limits/ $6,500 highest ticket amount) and a few I closed but the others were closed down due to charge backs. Most people think that a charge back is a charge back but there are two types of charge back calculations made which is used to determine if an account should be closed or remain open.

    There are charge back dollar amounts and charge back RATIOS! Very important to know this because VISA/MASTER/AMEX ETC require that a merchants charge back RATIOS remain under 2% (or lower). Now some providers will allow you to fluctuate up towards 4-5% in CB ratios ( I have gone up to 10% because I had a really strong relationship with that provider)but most want you at 2% or less in RATIOS. The other charge back calculation is the actual dollar amount, which is weighed much less than ratios.

    I have about 15 MAX new clients a week, which is about 20-30k a week on my terminal. In my case, even if I only have 3-5 charge backs that amounts to 3-6% in charge back ratios and my total dollar amount in charge backs could be 5-6k which is much less than my 3-6% in charge ratios and that is when you start getting accounts shut down.

    KEEP YOUR CHARGE BACK RATIOS LOW, DUH LOL. The questions is how!!??

    You purchase sales. Sales that you cannot charge back on, CLEAN sales, and tiny dollar amounts ($4.95) which run your CB ratios extremely low and they wont charge back. So even if your dollar amounts are high and your ratios are low you will be golden!

    Yes, I know what some might say? that is walking the line as far as merchant rules etc. It is only walking the line, IF YOU ARE running sales for a completely different product. If I am approved for golf clubs and I am running pharma then yes, possible TMF.

    I have had two accounts now for 2 years with zero issues and super low CB ratios.

    Did you know there are certain types of credit cards THAT YOU CAN NOT CHARGE BACK ON?
    • Thanks Thanks x 1
  2. jessica.lee

    jessica.lee Newbie

    Jun 25, 2013
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    Sure, your strategy might work. But there are other ways to manage chargebacks. I work for Chargebacks911 and we encourage merchants to be vigilant about two things - customer service and fraud detection. Yes, processors look at ratios. And you can get around their regs with your strategy. But your bottom line would improve significantly if you just prevented them from happening in the first place!
  3. Spawn


    Jun 20, 2009
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    Sounds like you work with high end clients closely. If that's the case why are your chargeback ratios so high. I couldn't spend my time on the phone with someone and then 10% of them go behind my back and chargeback. Seems like a shitty game. The profits look good tho. I'd maybe try to increase customer support to stop potential chargebacks or refund them right away if there not happy. Just some thoughts...