Harmonie Lewis

HW# 2

The easiest way for a customer to pay for a product or service is with a credit card. Businesses prefer it
over a check and many people find using their credit card makes it easier for record keeping if purchases
are made for both personal and business use. From the customer's point of view, it offers protection, if
they are dissatisfied with their purchase because they can request a chargeback.

If you’re a business improve your customer service. Communicate clearly what the customer is buying.
Make sure that the customer understands what they are purchasing including any warranties and
guarantees associated with the product. Make sure that all company policies are explained and clearly
written.

With PayPal one of their biggest problems is chargebacks. When you claim your bank that you did not do
purchase and your bank chargeback PayPal full amount and VISA/MC network charge +15-25$ fee for
each transaction.

The Merchant Risk Council (MRC) is a merchant-led trade association focused on electronic commerce
risk and payments globally.  They lead there industry networking, education, benchmarking and advocacy
programs to make electronic commerce more efficient, safe and profitable.

The Merchant Risk Council is a group that seeks to significantly reduce merchant exposure to online
fraud and promote the growth of e-commerce. American Express is one of the founding members of this
group, which includes Barnes & Noble.com, ClearCommerce, Expedia, Starwood, and First Data.

Their goals are as follows:

Helping to identify, evaluate, and recommend fraud prevention solutions based on merchant needs.

Helping Network members stay ahead of the fraud curve by sharing fraud trends and news on an ongoing
basis.

Helping limit merchant exposure to fraudulent credit card transactions through improved security of all
online merchants, large and small.

Helping e-commerce grow by increasing consumers' confidence in the security of their personal
information and their ability to shop safely online.

For online merchants, another solution to the chargeback problem is to subscribe to services such as
ChargebackPrevention.com and the Chargeback Bureau chargebackbureau.org. For a small membership
fee, members can access the site’s database of credit card numbers, e-mail addresses, and postal
addresses used for purchases that resulted in a chargeback.

Among the other reasons for chargebacks is credit card expiration, double charging, and bank errors
(Transaction gateway/server problem). Chargebacks cannot be completely eliminated, but merchants can
take some preventive measures to keep them in control. With increasing number of transactions,
chargebacks can come back to haunt the merchants severely.

If a merchant keeps getting repeated chargebacks, then there is a possibility that he/she will lose the
merchant account. Most credit card companies will take a notice of increased chargebacks and could
(most likely) put the merchant on their blacklist. The major credit card companies have access to
a match list that will have the merchant’s name written all over it. This means that the merchant will not
be able to accept credit cards through a merchant account. It will take several years before a credit card
company will re-issue a merchant account taking in account the bad history of excessive chargebacks. If
your business involves shipping items to a customer then it is absolutely vital that you collect signatures
on the delivery. This simple step will turn out to be your biggest proof in case of any discrepancies. Retain
the copy of the signature as a proof of delivering the item to the customer.