Welcome to Part 2 of our FAQ with Satwant Phull on his podcast, The Payments Show Podcast.
In Part 1, we talked about the shocking truths ofand how to prevent (or save) your business from getting shut down, suspended, or frozen.
Here, we’re taking things a step further and discussing what to look out for when considering chargebacks and what you can do to increase conversions.
1. The Chargeback Threshold You Should Never Reach
First thing’s first: we’re talking about the chargeback criteria set by. and other have similar criteria, albeit slightly different. In general, if you can aim to stay below ’s threshold, you’re all good.
sets the rules. Every processor that allows transactions through ’s network has to abide by ’s rules. The same goes for any ( , American Express, Discover).
0.9% and 100 Are the Magic Numbers
You need to remember both numbers, not just one or the other.
What they refer to are:
1. Having no more than 0.9% chargeback-to-sales ratio, AND
2. Having no more than 100 chargebacks per month.
Even if you have a ratio of 0.7% but have 105 chargebacks,will flag your account. Or if you have 20 chargebacks but a ratio of 2%, that’s a flag. You need to stay under both thresholds to shutdowns.
Your Processor Also Has Chargeback Criteria
As if’s criteria weren’t stringent enough, the processor you use will also have its own rules which might be the same or lower than ’s. For example, a monthly chargeback number of 95 or a ratio of 0.8%. It depends on the processor.
If you regularly experience chargebacks hovering closer to ’s thresholds, then work with a processor that mirrors ’s criteria.
Stripe Is Not a Processor
This is also why Stripe is so cut-throat about chargebacks,, businesses, and sales volumes.
It’s why Stripe is so cutthroat about chargebacks,businesses, and sales volumes. Stripe has one master and allows businesses to use part of that with a sub- . The chargeback ratio doesn’t apply individually for each business using Stripe, it’s for all Stripe businesses.
Stripe has a different rule than the 0.9%, 100 set by(they would have blown way over this every month). But what Stripe does is compares your typical chargeback quantity with your current number. So, if you typically have 3 chargebacks per month and for some reason you now have 6, Stripe will shut you down.
A lot of our clients are former Stripe users who have been shut down. The best route is prevention—you don’t want to get shut down and then find a solution in your panic. You want to prevent a shutdown from happening in the, and the best way to do that is by having your own .
With your own, you don’t have to worry so much about the month-over-month ratio. If you suddenly spike from 3 to 6 chargebacks, it’s not such a big deal.
2. Don’t Ignore Your Payment
How many times have you signed into your bank orand seen a charge you didn’t recognize? What was your reaction?
We’re willing to bet you panicked, thought there was a mistake (e.g., stolen card, charged too much), and you wanted to dispute it.
go through this far too often, and now it’s far too easy and habitual that they dispute the transaction instead of research it.
The fact is that, whileis real, from customers disputing genuine purchases is much more common. By fixing your payment , you can change the way customers see and dispute charges from your store. Your is a great measure.
Allow You to Set Up Custom
When you have your own set your own . You have 22 characters for the and 13 characters that can be used for the location. Make sure you put your in the , don’t leave it as some random string of characters. Your needs to be front and center., you can
If you’re an online shop, the best thing to put in the location section is your.
Forbusinesses, adding a location can actually harm you in the way of chargebacks and . Customers can see that, call the , and say, “I’ve never been to Miami, some must be using my card.”
Even though it isn’t a, the customer doesn’t know that.
If you add your business’, the customer can call you when they have questions regarding the transaction instead of their bank. A refund is always better (and cheaper) than a chargeback.
If you don’t have a, add a URL. The purpose is to turn that section into a fast and easy way for customers to either understand what store the purchase is from so they can have an a-ha moment, or so they can contact you and request a refund. Whatever you have, put it there.
This is one of the easiestmethods any business can do, even on Stripe.
Yes, We Encourage New Business Owners to Start Out with Stripe
Contrary to what you might believe, we actually advise startups and entrepreneurs to get their business up and running with a service like Stripe initially.
Until you start processing $50k per month, aggregators are a fast way to get some processing history. You don’t need to worry about adding value to yourand following the tips and tricks we often share because your concern is getting your running.
Because opening atakes about 2 weeks, it’s faster to open an account with Stripe.
Stripe won’t be keen to shut you down until your sales volume starts to increase exponentially. But that won’t happen in the first months of opening your store.
When you start to approach $50k or something less, that’s when you need to look into opening a. You’ll have the history to back up your application and you’ll get an account open before fears about being MATCH-listed arise.
3. Target the Low-Hanging Fruit to Add a Few Percentages to YourConversions
Now that you’re operating smoothly, you have chargebacks under control, and your payment processor and acquiring bank backs your business, you can start focusing on conversions.
Get Fresh Eyes on Your Sales Funnel
You need someone who doesn’t work with/for you to go through your sales funnel. Get a family member or friend to buy something from your site as a trial. Tell them to note when things really work and when things really don’t.
You already know how to navigate your own sales funnel. That’s why you need an unbiased view of how it works. The smallest details can really kill a sale.
An example Satwant gave goes back to the CD era. A business owner wrote “duplicates” on their site for customers to get a duplicate of the CD they’re purchasing. Yet people continued to write in asking how they can buy copies. And that was the problem. Once he switched the one, single word, “duplicate”, to “copy”, everything worked like a dream.
Understand Your Demographic
The customer experience needs to be designed for your target demographic in every way. You can’t slack off at thepage thinking you’ve already got the sale.
For example, we once worked with someone who’s audience was folks above the age of 55. By increasing the font size on thepage, that client saw a bump in sales.
You need to pay attention to the little things. Like making sure theinput box separates every 4 numbers so users can better avoid making mistakes. A frictionless experience always works better.
Understanding your demographic can also help you support or remove variousfro your page. Some businesses can run on , others use crypto. Most will need to support , and that means making sure your is secured with , ( ), and ( ). These help with customer when making .
Sell More of the Same
When it comes to upsells, don’t question it. A lot of people wonder what they should be upselling, but the best product to upsell is exactly what the customer is buying.
If the customer is getting a 3-month supply of weight loss supplements, sell them 6 months’ worth. You already know they want that product. Instead of making them come back in 3 months or riskfrom the every 3 months when the transaction goes through (if it’s a subscription), put it in the upsell.
AServes 90% of Online Businesses
We can’t say it enough. Most online businesses can identify with a processor’s or aggregator’s definition ofbusiness. From your industry to card-not- .
Don’t risk it. Open up a and save your business from the hassle of freezes, suspensions, and shutdowns. Speak with our team to open yours up today.