AuthorizeNet Merchant Service - Question

[Compworld]

We use AuthorizeNet for all foreign and domestic sales through the net. Most of the time, the charges are anywhere from 3.00 - 18.00 per charge. If, for some strange reason, a customer charges back lets say a charge for a few bucks, then finally admits that it was a legit charge, would AuthorizeNet still charge me the 25 dollar charge back fee?

Anyone know?

Thanks,

CompWorld

[Morocco]

Yes they would

[Corey Bryant]

A lot of times, the chargeback fee comes from the processor & not the gateway. Most processors also usually send out a retrieval request depending on what you sell.

Corey

[Morocco]

The chargeback fee will usually be retained even if you win your appeal.

Some websites may recieve 60 chargebacks a month and win every appeal, but they will still be stuck with the fees applied to each chargeback.

[Compworld]

Wow. At $25.00 a pop adds up. Isn't this kinda like free money by the Merchant services people? I am surprised no one has complained to the FTC or DOJ about this.

CompWorld

[Morocco]

It may not always be $25 a pop.

But it is a horrible thing. Everyone makes money off chargebacks except the merchant. The Issuing back slaps on a fee, then the Merchant bank, then maybe the processor, and who fronts the bill? The merchant, its complete robbery on all fronts.

Why can't Issuing banks take some responsibility for their cardholders? I mean they are the ones who gave them the card in the first place. If you are willing to set up a both in every college town and give away a free hat if you sign up and buy a card atleast have some compassion when that kid goes out and buys a plasma TV and suddenly forgets about the charge when the bill arrives.

[Corey Bryant]

Visa has implemented this. If you sign up for Verified by Visa - it will prevent the "I didn't do it" chargeback. If the consumer uses that, then it is up to the issuing bank & the consumer. But the merchant keeps his/her money.

Corey

[percentages]

Do Authorize.net really charge $25 per chargeback?

I use those sharks.....glad to say they have been totally superb in the last 4 years, but, I must read the small print more carefully.

In over 100,000 transactions I ain't seen a chargeback yet, so I don't worry about it.........but $25 does sound a little steep!

The regular transaction processing fee would seem more reasonable IMHO.

[Corey Bryant]

It depends on who your processor is. For example, if it is authorizeit, then your chargeback fee is $15: [authorizeit.com...]

If it is US Merchant Services, it could be anything that they had entered on the application: [usms.com...]

A lot - you just cannot find on the processors website

Corey

[Morocco]

Corey,

You are the man. I use VbV and SecureCode, and they work. My previous post was just a rant concerning the way banks still function with all these merchants these days. I see it all the time, and its the same song and dance.."I sent the TV on time and it what they ordered..It passed AVS and my useless fraud screen software...What will I ever do..Boo Hoo Hoo."

You run VbV you can't recieve a fraudulent chargeback on your visa's...23,61,75(the big one I used to get), and 83

[Corey Bryant]

:) Thanks Morocco.

One thing that probably should be pointed out, that VBV does not work all that well on recurring charges. It needs the consumer interaction. Meaning that the first charge would be fine since the consumer hit the submit button. But the recurring would not because those charges would be on the gateway (LinkPoint, Authorizenet.com, etc) only. So now one would need to ask, do I ask them to renew their subscription every month or maintain recurring billing?

-Corey

[Morocco]

That's a good point. I don't do reocurring billing.

I see your problem though, because if the first transaction is chargedbacked you would have no knowledge of it with VbV, which means you would continue the recurring billing...

Just a side note...Corey, I saw one of your posts in another forum when I was evaluating these programs(VbV/MCSC) several months ago. You gave it a thumbs up, and because I so highly respected your input you were one of the reasons we went with it. It was the straw that broke the camel's back. Thank you so much it has changed the way our company does business online. Thank you.

I am proof that these forums really do help people, and Corey is one of the people to thank.

[Corey Bryant]

Once again - thank you Morocco. It seems I spend a lot of my time on the net. :) I have learned a lot on these forums as well. I am very happy to see that VBV has worked out quite well for you.

-Corey

[wackal]

do you have to do real time processing in order to use vbv? what if I collect the info but don't charge the card until later?

[Morocco]

No, you don't have to do realtime.

[digitalv]

Don't know if this was said or not, but Authorize.Net doesn't charge you a charge-back fee. Authorize.Net is the gateway - they facilitate the transaction between your website and your merchant account.

They are not your merchant account, and have no way of knowing if a customer charges back their purchase or not. The $25 fee you're paying is being paid to your MERCHANT BANK, not Authorize.Net.

[Morocco]

Digital,

That is correct, but most merchants assume that fee is coming from Authorize.net.

You are right though, the bank does dictate those charges.

[digitalv]

Morocco,

That's kinda why I made the post :)

It would be stupid to start switching gateway's to avoid charge-back fees, since one has nothing to do with the other.

[Corey Bryant]

I think I also said that digitalv on the first page & pointed to a few processors whose chargeback rates were different.
-Corey