Ever get hit with a chargeback for service or product provided? Are you tired of giving away your hosting services, other services, or products for free? Why not consider selling your chargebacks and NSF checks. There are companies, like CRB Company, that specialize in buying chargebacks and NSF checks. You get paid, upfront, a % of the face value of the chargebacks/NSF's and they are responsible for locating and collecting from the consumer. For those that are selling webhosting plans for $19.95 a month, this might not seem to be worth it to you. Now, with the help of Host Legal, we have come up with new TOS for your company which may allow you to add fees to your chargebacks/NSF's. You have to have the fees listed in your TOS to be effective. These fees will vary from state to state.

Once these fees are calculated, you might be able to get at least the money back for the services rendered as well as the chargeback fee imposed by the Merchant Account Processor (MAP) or Third Party Processor. While it will not help you on your chargeback percentage, it will help on your receivables. Each service, chargeback, and returned check is different – just like a merchant account. I recommend that you contact CRB Company for more information on selling your chargebacks and returned checks since they also have some minimum requirements, which vary from merchant to merchant. They primarily deal with United States consumers. And if you have a webhosting company, check out Host Legal for more information on TOS.

One thing to keep in mind, if the charge is known to be fraudulent, CRB or any other company, will not buy your chargebacks. The easiest way to tell this is if there was a police report filed. If so, CRB Company and most other companies cannot enforce these on the consumer. Feel free to contact CRB Company today for more information. If you provided the services or products to the consumer within your TOS and AUP, and they do a chargeback, chances are that you should be able to get your money back. For example, someone signs up with your hosting company and they use your services for one month. The uptime is well within your SLA. Yet, at the end of the month, they leave and decide to do a chargeback. Consider getting your money back. Or maybe you sell a script to someone. And maybe even help them install it. Then two weeks later - you get the chargeback notification. You know they are using it, but due to Visa's rules on chargebacks and the internet, you really do not have a leg to stand on. Consider speaking with CRB Company to get your money back for that script.

The extra charges that you are able to tack onto a chargeback or NSF check is state sensitive. Unfortunately, the resources to locate each of these numbers are very low. I recommend that before you update your TOS, to check with your attorney or State's attorney.

Now you are probably wondering what fees might be imposed? Well - to only give you an idea, let's say that you have a webhosting plan that is $19.95. After one month, the consumer cancels service and does a chargeback. What happens now? You get charged $15-$50 for that chargeback on top of the $19.95. So you are out $34.95-$69.95 right now. Now here is where it becomes tricky. What to "charge" exactly. You can charge the $19.95 and the chargeback fee. This is a start, but CRB Company and others are only going to give you a small percentage, so right now you are looking at probably only looking at $3-$7.00. Not too much so you will need to determine what your state might allow, possibly 3-5 times the amount of the chargeback along with a not too exceed amount. Let's say you charge 5X the chargeback, $60 recovery fee and your other chargeback fees ($25.00 from your MAP). This would be $204.70. And selling it to CRB could net you about $20.00. This is only an example.

Guess it is about time to update those Terms of Service. Good luck!

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Corey
Merchant Accounts | Toll Free Virtual Solutions | My Merchant Account Blog

Selling NSF checks and chargebacks backs can be an option, especially if businesses are trying to save time. This is not, however, always the best way to minimize lost profits. There are collection agencies that will work to collect the full value of any NSF check for a business, at no cost whatsoever. I work with one, NorthStar Technologies, that offers free NSF check collection plus a “bad check bonus” on each collected check ranging from $5.00 - $10.00 per check. If an agency like NorthStar cannot collect the full balance and bad check fee for free, a business may then want to opt to sell the uncollected checks to a service that buys bad checks. A good example of NorthStar’s returned check collection program may be found at www.bumchecks.com

[quote=Corey Bryant] "While it will not help you on your chargeback percentage, it will help on your receivables."

This will DAMAGE you.

After an unauthorized charge - and you can not enforce such a charge - you will get hit with, guess what? ANOTHER CHARGEBACK.

How will that help your chargeback %? Ever heard of the MATCH LIST?

If you hit 1% chargebacks either in volume or tickets, your account could be terminated.

Chargebacks are how unethical merchants get penalized.

If you do such things- repeated unauthorized charges - you could be placed on a MATCH LIST. Try 7 years of zero processing from anybody. How will that affect your cash flow?

Be very careful trying to "game" the system. We're talking about bankers here. Bankers do not like to be burned. This is the banking industry. Be more ethical, and reduce your chargebacks via better business practices.

We try to help our merchants avoid chargebacks by developing best practice solutions to their operational risk. Why not prevent them by doing things BETTER up front? If you are very clear on your policies, you can win the chargeback disputes.

If you have any questions, see us online at http://www.banccertified.net for more information.

Thank you,

Dean sorensen
Senior Account Executive
Banc Certified Merchant Services
877-861-5710 x2207