Forum Moderators: buckworks
So the idea occurred that I could set up a "club" (along the lines of the record clubs, etc.) - we would offer a huge discount on the first "installment" of colors, following it every month with an additional block of colors (also at a discount, but not as huge) until all have been shipped, probably over the course of 10 to 12 months. There would be an agreement up front that includes a fee for early cancellation of the membership, pro-rated by the number of shipments that have been made.
My worry is in regard to the recurring charges and the possibility of someone cancelling their membership early and disputing the cancellation fee, or (worse yet) disputing the charges on their credit card after the first couple of shipments.
I could see a customer getting the first shipment plus maybe one or two more, then disputing the charge - at that point, because of the discounts and incentives, I've probably not broken even on the deal and a chargeback fee would really put the icing on the cake. Fortunately, we've had absolutely zero fraud in our business to this point so it's not a high risk but still need to be considered.
Any ideas how to minimize my risk on such a club membership scheme? Any "gotchas" to be aware of before we launch something like this?
Like most everything else, we probably handle our club differently. Our members pay the first month to become a member. They receive the product on the next available shipping cycle. We don't have enough member to make this a big task, so we manually bill them prior to shipping. Any that aren't billable are notified, and dropped as members where applicable.
In our situation we aren't out anything, the product is simply placed back into existing inventories. If you have to stock extra inventory for your club then you do have to take that into consideration.
As far as chargebacks, it hasn't happened yet. Most of our club members come from a core of already satisfied customers, so they aren't surprised by receiving something that wasn't expected.
instead of subscribing what if they get a cumulative discount for each subsequent purchase.
ie: if they buy a red widget, the box ships with a coupon that says "if you're a collector, register online and save 5% off your next widget".
they buy a blue widget and they get a 10% discount (or whatever)...
anyhow, the idea is to give a progressively steeper discount for registered purchasers.
It doest commit me to buying all teh rnage just when I want too,which is going to be every month anyway.
With the discount id feel pretty good about buying from you too.
Good idea ole bean!
