Common Reasons for Chargebacks:

1. Requested Transaction Information Not Received.
2. Duplicate Processing
3. Fraudulent Mail/Telephone Order Transaction
4. Cardholder does not recognize – Potential Fraud
5. Fraudulent Processing of Transaction – No Signature Obtained
6. Customer disputes
7. Processing errors
8. Authorization issues
9. Nonfulfillment of copy requests (only if fraud or illegible)

For More Information on Chargebacks and Protecting yourself, visit

Keywords: chargeback fraud, preventing chargeback

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Frequently Asked Questions About Chargebacks.

Q: Why did I receive a letter asking for a copy of a sales draft?

A: A request for a copy of a sales draft is initiated by the cardholder or by the cardholder's bank. Common reasons for these requests are that the cardholder does not recognize the transaction or may need a copy for personal business or tax records. It is imperative that you respond immediately to these requests. If your response is late, we will lose our ability to contest the chargeback.

Q: What is the name of the cardholder who requested the sales draft?

A: The cardholder issuing bank is not required to supply us with the cardholder's name. We realize that the name may make your search for a copy of the draft easier. However, the standard sales draft request information contains only the card number, dollar amount, and transaction date. Because of this, we encourage you to file your sales drafts in transaction date order.

Q: May I have a "no return or refund" policy when accepting credit cards?

A: Yes, if the return policy is clearly printed on the signed sales draft or a store receipt in close proximity to the cardholder's signature. The return policy must appear in letters at least 1/4 of an inch high on a document that is signed by the cardholder at the time of sale. This only applies if the cardholder leaves the store with the merchandise. It will not protect you on shipped or delivered goods or with quality disputes.

Keywords: chargeback fraud, preventing chargeback

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Tips to Avoid Potential Chargebacks

  1. Do not complete a transaction if the authorization request was declined. Do not repeat the authorization request after receiving a decline.

  2. If you receive a “Call” message in response to an authorization request, call your authorization center. Be prepared to answer questions. The operator may ask to speak with the cardholder. If approved, write the authorization code on the sales receipt. If declined, ask the cardholder for another card.

  3. Make an imprint for all card-present transactions. If you have a point-of-sale terminal with a magnetic-stripe reader, swipe the card through the reader for every face-to-face transaction. If the terminal isn’t working or a card’s magnetic stripe cannot be read, key-enter the account information and make an imprint of the embossed information onto the sales receipt using a manual imprinter. Even if the transaction is authorized and the cardholder signs the receipt, if the receipt does not have an imprint of the embossed account number and expiration date, the transaction may be charged back to you for “no imprint” if the cardholder later denies participating in the transaction.

  4. Obtain cardholder signature. The cardholder’s signature on card-present transactions is required. Failure to obtain the cardholder’s signature could result in a chargeback for “no signature” if the cardholder denies authorizing or participating in the transaction.

  5. Ensure that incorrect sale receipts are voided and that transactions are processed only once.

  6. If your establishment has policies regarding merchandise returns, refunds, or service cancellation, disclose these policies to the cardholder at the time of the transaction. Your policy should be pre-printed on your sales receipts; if not, write or stamp your refund/return policy information on the sales receipt near the customer signature line before the customer signs (be sure the policy shows clearly on all copies of the sales receipt). Failure to disclose such policies at the time of the transaction will be to your disadvantage should the customer return the merchandise.

  7. If a customer requests cancellation of a recurring transaction which is billed periodically (monthly, quarterly, annually), always respond to the request and cancel the transaction immediately or as specified by the customer. As a customer service, advise the customer in writing that the service, subscription, or membership has been cancelled and state the effective date of the cancellation. Failure to respond to customer cancellation requests almost always leads to chargebacks.

  8. Keep customers informed on the status of their transactions.

  9. If the merchandise or service to be provided to the cardholder will be delayed, advise the cardholder in writing of the delay and the new expected delivery or service date. Do not substitute another item unless the customer agrees to accept it. By giving the customer notice and the option to cancel, you may help avoid a customer dispute regarding the merchandise and a possible chargeback.

  10. Ship merchandise before depositing transaction. Don’t deposit transactions with your merchant bank until you have shipped the related merchandise. If customers see a transaction on their monthly card statement before they receive the merchandise, it could lead to a preventable chargeback.

For More Information on Chargeback Fraud.

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Merchants Must Comply With Cardholder Data Security Requirements

With the Internet playing a major role in purchases, computer hackers pose a risk. Hackers are thieves. They cause problems and they can leave merchants holding the bag to face devastating consequences -- not to mention the injury that is done to the consumer whose information is stolen.

Everyone has heard about reputable vendors who have lost their customer’s valuable credit card information. To put it simply, businesses and individuals who make credit card transactions with a merchant expect that their information will be kept private and secure from hackers and individuals on the “inside” who try to steal information for fraudulent purchases.

Visa®, MasterCard and other payment cards such as Diners Club, Discover Card and American Express recognized the need to protect their client’s information. Visa® and MasterCard were the first to create cardholder data security requirements which all merchants must come in compliance with. Diners Club, American Express and Discover Card soon followed their lead and endorsed these standards.

The cardholder data security requirements address issues that will keep credit card records and cardholder data private and secure. To keep this information safe, merchants must build and maintain a secure network, having access-control measures and implement an information security policy. Any merchant who captures, processes or stores credit card data must comply with the cardholder data security requirements.

Some of the cardholder data security requirements which must be met include:

  • Credit card data and cardholder data that are stored in a computer system should be protected. With the rise of card not present transactions, if a hacker knows the cardholder’s name, address and expiration date than the thief can go on a shopping spree.
  • A secure network should be used that has a firewall. The network and firewall should be used, maintained and updated regularly by merchants to protect credit card data.
  • Security should be tested regularly and anti-virus software should be maintained and updated regularly.

  • Transmissions across public networks should be encrypted. Encryption reduces the threat of a hacker obtaining personal information.
  • There should be different levels of employee access to credit cardholder data. Each employee who has access to cardholder records should have their own identification and password. Access should be limited and only given to those who “need-to-know.”

  • A policy should be maintained that address the security of information.

All merchants are required to be in compliance with cardholder data security requirements. If a business is found to not comply with the standards, or if they fail to rectify a security problem, they can be fined and/or prohibited from accepting certain credit cards.

Years ago, merchant accounts were generally through banks. With the rise and popularity of the Internet, many individuals (especially small businesses) are choosing to go with third-party companies. It is important to keep in mind that fraud is the responsibility of the merchant. You should carefully scrutinize your needs and choose an effective and reputable merchant account.

Keywords: free pci compliance, scanalert, verepay, website security

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What is a Virtual Terminal?

In today’s society, companies are choosing to conduct business transactions online. This has increased a number of concerns regarding security issues. With the increase of merchant payments online, companies need software that will insure that credit card processes are conducted with the highest degree of security. This is where virtual terminal transactions come in to play. Virtual Terminal transactions allow users to complete computer transactions processing credit cards over the Internet as opposed to using separate stand-alone applications. There are many benefits to using Virtual Terminal transactions. The first benefit is convenience. For companies that conduct merchant payments online, using virtual terminal transactions will enable you to check and process credit card transactions anywhere that you have computer and Internet access.

There are many benefits for using virtual terminal transactions to handle merchant payments online. For instance, convenience is the first benefit. You can save time by checking and verifying credit card payments from any computer with Internet access and a web browser from any location, 24 hours a day. Small businesses will appreciate the cost effectiveness of using virtual terminals. You can immediately check and approve any merchant payments online, and you will discover that virtual terminals are quick, easy, and an efficient solution to handling your financial business needs.

Virtual terminals are also an effective tool for handling and dealing with credit card fraud and charge backs. Charge backs occur when someone purchases something on their credit card, then later disputes the credit card transaction. Various credit card companies have their own set limits as to how many charge backs a company may incur, however recognizing the potential for charge backs can help prevent any permanent results from having too many. With virtual terminals, you can recognize some signs of potential charge backs and take steps to ensure that you will prevent these transactions from completing.

For more information visit Virtual Terminals.

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OsCommerce - Free Open Source eCommerce Solution

There are many people that work on this software, since it is a free open source software, and this allows for many people to share the knowledge they have and to exchange ideas to help make it better. Some people work with osCommerce as a software hobby, while others work on it to help make a software that meets the requirements of their own online marketing needs. All of these people come together to make osCommerce an online shopping cart that offers a variety of choices to those who use it. If you are looking for a free open source that offers the ecommerce solutions you need for your online store, then osCommerce is a great free way to help run your online store.

For More Information on osCommerce Free Open Source eCommerce Solutions.

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UltraCart - Premier Hosted Shopping Cart Solution

UltraCart also makes it easy for online merchants to find the best credit card processing company since they support many credit card gateways. This enables merchants to find the processing company that offers the best deal and the features they need. The UltraCart premier shopping cart system is also easy to integrate into your existing website, since there is no software that you have to install yourself. You can choose the way your checkout looks, but all without the headache of installing software on your own server. UltraCart makes e-commerce easy for online merchants.

For More Information on UltraCart Hosted Shopping Cart Solutions.

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KwikCart - A Revolutionary eCommerce Business Tool

No matter if you are involved in sales among businesses, or if you sell to clients, you can find a KwikCart package that can be made to fit the needs of your company. KwikCart ecommerce business tools are easily customized to fit the needs of your online store. If you are unsure about how this system will work for you, you can actually set up a time to walk through the features the site has to offers. E-commerce is big business, and big business needs a great solution to provide the tools that lead to success, and KwikCart has the tools you need.

For More Information on KwikCart Shopping Cart Solutions.

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StoreFront - Shopping Cart Software

StoreFront works as a plug-in for Microsoft FrontPage and Macromedia Dreamweaver, and allows business to easily customize their websites. There are many benefits that StoreFront offers as well, such as an affiliate program that is already built in, and commissions are easily set up. You can also use the discount and coupon features that are available with StoreFront shopping cart software. StoreFront even comes with the tools to help you manage your website, and also keeps your website secure. If you are already working with FrontPage or Dreamweaver, then StoreFront is a great shopping cart software to choose for your online store.

For More Information on StoreFront Shopping Cart Software.

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Sell Online with Yahoo! Stores Merchant Solutions

YAHOO! Stores offers a variety of tools to help you build your site, and there are many ways that you can customize your web site to your needs. You can even have a professional design your site and help you build your online store. YAHOO! also helps you to build pages that are easily found by a search engine. YAHOO! Shopping Carts are also available for you to use on your online store. You can decide whether you want to have your checkout on one page, or several pages, and the page layout is customizable as well. YAHOO! Shopping Carts also allow your customers to save the contents of the cart for as long as two weeks.

For More Information on Yahoo! Stores and Shopping Carts.

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ZenCart Shopping Carts - The Art of E-Commerce

ZenCart offers enhanced security to merchants as well. You can use it to make your website more secure, and when it is installed you can choose a username and password to help keep it secure. There are even a variety of customer relationship tools that are available to help you improve your e-commerce, including gift certificate programs and referral programs. You can even set up this system to send confirmations by email.

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What does a virtual terminal do?

VIRTUAL TERMINAL maintains the history of these payments, batch reports, declined cards, statements, and the “profile” administration list for easy access and management.

One time payments may also be made with all 3 of these options.

Authorization codes are sent to the merchant. Deposits are made to the merchant’s bank account in the normal 24 to 48 hour time frame.

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Costs to process payments through recurring billing services?

The regular merchant processing rates apply.
The discount range 2.25 to 2.75 + 30 ¢ per transaction.


$385 monthly payment x 200 participants = $77,000 recurring payment monthly.
$385 x 0.0225 +30 ¢ [discount rate+transaction fee] = $8.97 x 200 = $1794 monthly discount fee.

The processing fees may be taken as a business expense at the end of the tax year.

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What happens when a card is declined authorization?

The merchant may wait a period of time, such as 24 hours, and select the declined card for re-submission for authorization. Should card receive a decline again, the merchant can request another form of electronic payment a different bankcard or debit card or proceed with their normal collection / late payment procedure.

Keywords: Authorizations Declined, Credit Card Authorization, Declined Credit Cards

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Recurring Billing Services Equipment and Cost

There are two choices for equipment.

  • Installation of the processing software in an existing computer . The computer becomes the terminal and uses the modem to connect for the card authorization. COST is $39.95/mo. x 36 mos. leased, or $499.00 retail purchase.

  • Installation of a Virtual Terminal on a computer with an ISP [Internet Service Provider]. The ISP needs to be one other than The transactions are done on a secured internet payment link. COST is $399.00 set up fee and a $15.00 monthly network access fee.

Keywords: recurring billing, virtual terminal

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One Time Payments on Recurring Billing Systems

Yes! The computer accepts the swiped card and processes the transaction the same as a stand-alone terminal on a counter top. It requires a “card reader” – the gizmo that accepts the card swipe. COST range is $29.95/mo. to $49.95/mo. X 48 mos. leased. Retail purchase range is $399.00 to $800.00.

Keywords: card swipe, transaction processes, stand alone terminals, card reader, retail credit card transactions, recurring billing services, recurring payment services

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