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I have since dropped them and moved on, as their service is just completely random and quite unexplicable.
I am now considering rather than bothering playing games, simply thinking to send a message to all my customers saying that they are welcome to ask for a chargeback from their CC company and register again with our new service if they wish to continue to use our product.
Given that this product is used often, this will probably cause over 100 chargebacks on this account alone.
Has anyone ever done this with a 3rd party CC processor?
Those 100 chargebacks could cost you - the merchant - anywhere from $1,000 - $3,000, depending on how much you are charged for a chargeback. Plus there are some 3PP that actually report to the TMF - and if you do get on this list, chances are very slim on getting another merchant account (especially with low rates).
I've never had a problem with any merchant account or otherwise.
I have a 100% feedback rating on Ebay for several thousand transactions.
In over 5000 transactions on PayPal, I have had 0 chargebacks.
The only 3 chargebacks I have ever had have been on the 3rd party system mentioned above, which is why I'm just dropping them.. My guess is their system has very poor fraud detection.
The chargebacks wouldn't be charged to me, as they already have my money. However, the TMF list sounds nasty and makes me glad I asked.
Still, I wish there was something that could be done about these people. I don't think they are stealing money, they are just terribly terribly incompetent.