A new tool to reduce your chargebacks

[pennywize]

Hi CJ, Hi Oprano!!

Serge, you killed my account.. Oh, the pain!

CJ mentioned to me just before that she'd posted some info about Client Confirm here, so I just wanted to stop by and say hello.. it's been a while.

We've been working on this in-house for actually about 8 months now, and we've had it deployed on sites for 6 to 7. It really has made an enormous difference, to the point that these sites now process through a raw merchant account without any kind of scrubbing except Client Confirm. They are now well under the 1% chargeback threshold.

Just clarifying a few things :

Both ways a surfer can verify themselves are free. In the USA, canada, hawaii and mexico it's a 1-800 toll free number.
The rest of the world we use the SMS system, which is also free to RECEIVE an SMS message.

We are also establishing some infrastructure in europe, australia and asia now to allow free calls for surfers from those parts.


Also, the verification happens AFTER the join is done, so conversion rates are not affected. The obvious question is 'what happens to people who can't confirm themselves?'. Well, since most people have just payed money to join, over 90% go through and complete the verification stage. The remaining 10% is at your discretion on what you want to do.

I think as the year wears on, and the card associations clamp down harder and harder on processing companies, it's going to be imperative that people really manage their fraud control. Gone are the days where you can sit back and rely on simple card velocity checking and other automated credit card checks. Friendly fraud is now the biggest source of fraud and Client Confirm just about eliminates that.

I will be around to answer any questions you may have about Client Confirm. We are officially launching the service next week but feel free to stop by the website and check out the demo! We are already busy setting up Pennywize clients from our pre-launch, so please bear with me if I am a bit slow to reply!

We are also keen to partner with companies (eg. billing companies) who want to deploy this technlogy across all their clients and create an extra ongoing revenue stream from commissions.

Thanks

Steve Harris

[chodadog]

I think it's a good idea. But i think SMS for the rest of the world is a bad idea. Obviously, not everyone has a phone, so you're going to be missing out on legitimate customers.

I think it wuold be great if it only applied to surfers from countries that have the toll free number. Like, if you could use some sort of GeoIP script so that until you have toll free numbers in say, Australia, then only Americans, Canadians, and Mexicans would have to go through this confirmation. And then when you do get a toll free number setup in Austrlia, then add Australia to the list of countries that need to confirm.

You'll obviously still be making a little dent in chargebacks, but you'd also be minimising the number of surfers unable to join your site.

[Toolz]

Okay one issue about this in the midst of this piss I never saw anyone answer.... retention.

Given the amount of people who cancel before never seeing the site, 15-20% or higher, don't you believe a program like this could adversely affect that number and drive it even higher? I don't know about you but the last thing I want to do when I'm in jerk off mode is pause, call somebody, and tell them it's me. I'd be more apt to cancel, and go somewhere else immediately

[Carrie]

It all sounds great and I'm sure as it gets tested on even *more* sites with even more real-world situations being applied to it, it will be refined and modified so that it truly kicks ass.

My question is what happens when the customer doesn't call the processor or site owner, but instead calls Visa or their bank directly?
I've heard horror stories of amateur girls who had ip logs, access logs, chat logs, emails, and even pictures (sent via email) going as far back as 8 months for a customer trying to claim that he'd never accessed the site, but he got his chargeback anyway.

I can understand if the customer calls the site owner or processor, you can have someone tell him "we have your voice recording", but I don't see how this helps if he calls the bank or Visa directly?

I like Pennywize a lot. I think they are going in the right direction and with the best of intentions. The concept is good, but I think from what I see, it is a bit cumbersome and will scare off business when customers are asked to phone. I do believe it will certainly lower chargebacks, but at the same time, will lower profit. JMHO.

[gregtx]

Originally posted by cj@Feb 11 2004, 04:39 PM


There's also the additional problem of affiliate fraud and not knowing which affiliate is creating the most chargeback problems. This system allows you to monitor exactly which affiliates are causing you trouble.

we can already see this via our epoch data... I can see exactly which affilates have chargebacks and credits... and we did a housecleaning a few months ago.. not only did it lower our cb rate.. but it raised our average retention..

also.. i'm not sure on the percent anymore.. but what about all of the surfers on dialup and only one phone line? I really do not see someone wiht a rock hard, .. lubed up dick in hand.. logging off.. calling an 800 number.. then loggin back on.. etc etc.. I think they would find another site...

just my opinion of course

[Rolo]

Whatever causes chargebacks to be less is good (just ask VISA/MC :-)))

Too slay the chargeback beast, then there is no magic weapon (unless you want to have fewer billing options) - instead you need to use an arsenal of weapons, which targets all of the possible areas where chargebacks can infest your business. The trick is too find the right balance without hurting your business.

I think a system like this would work well on some CC transactions, and with a few changes it could also be used to cut down the number of ACH returns.

[cj]

Originally posted by Toolz@Feb 12 2004, 08:14 AM
Okay one issue about this in the midst of this piss I never saw anyone answer.... retention.

Given the amount of people who cancel before never seeing the site, 15-20% or higher, don't you believe a program like this could adversely affect that number and drive it even higher? I don't know about you but the last thing I want to do when I'm in jerk off mode is pause, call somebody, and tell them it's me. I'd be more apt to cancel, and go somewhere else immediately

Toolz, quite simply, the customers don't cancel immediately and go somewhere else any more or less than they do normally. They've already signed up and paid for the service, the step is just a confirmation to let them into the members areas.

The type of people who cancel immediately are the type of friendly fraud customers we are trying to stop anyway ... at the end of the day, what you lose on the merry go round you pick up on the ferris wheel - less chargebacks is never a bad thing, even if a certain amount of signups needs to be lost to do that ... isn't that what everyone has been doing for 6 months? compromising on sales in order to reduce chargebacks?

and with the phone call, you aren't calling 'somebody' - you are calling an answering service to leave a voice recording ...

I just want to state right off the top, this is not piss but a genuine inquiry. CJ, I was just wondering if you had any financial interest or benefit from this new Toolz programme or Pennywize. I have no idea what you do, so I am curious. It is a good thing to know this when someone is recommending a product or service.

[cj]

Originally posted by Carrie@Feb 12 2004, 11:57 AM
It all sounds great and I'm sure as it gets tested on even *more* sites with even more real-world situations being applied to it, it will be refined and modified so that it truly kicks ass.

My question is what happens when the customer doesn't call the processor or site owner, but instead calls Visa or their bank directly?
I've heard horror stories of amateur girls who had ip logs, access logs, chat logs, emails, and even pictures (sent via email) going as far back as 8 months for a customer trying to claim that he'd never accessed the site, but he got his chargeback anyway.

I can understand if the customer calls the site owner or processor, you can have someone tell him "we have your voice recording", but I don't see how this helps if he calls the bank or Visa directly?

When you have your own merchant account (which realistically, this is what this is best used for) and the customer calls visa, visa contacts the bank and the bank sends you a notice which you have the ability to defend yourself against (quickly!).

What 3rd party processors DON'T do properly is jump in at this point and provide the information to their banks or directly to the customer. For whatever reason i'm not sure, but this is where having your own merchant account allows you a better control over how your customers are handled.

When most customers realize how much info you have gathered about them, usually they drop the chargeback request ... anywhere between 60% & 70% of people just drop it immediately - the rest may still become chargebacks, no matter what info you present - but 'friendly fraud' customers panic when they realize you can prove it was them.

Nothing is 100% going to stop the chargeback problem though, visa will still let them through - but it is up to us to put some protective barriers between our products and visa.

[cj]

Originally posted by J'sdude@Feb 12 2004, 05:41 PM
I just want to state right off the top, this is not piss but a genuine inquiry. CJ, I was just wondering if you had any financial interest or benefit from this new Toolz programme or Pennywize. I have no idea what you do, so I am curious. It is a good thing to know this when someone is recommending a product or service.

I don't have any financial interest in this product at all - Steve & I go way back and we always help each other out with what we can. I'm always one of the first to have these products installed on my servers as a test (although i still don't have a copy of bloody pennywize!!!) so basically Steve provides me with software and I help him explain his products to webmasters.

I've been testing this product with Steve since he started the idea & feel very passionately about *something* being done about chargebacks, whether its perfect straight away or not.

Originally posted by cj+Feb 12 2004, 02:44 PM-->