Chargebacks: The 411
The nutraceutical industry is prone to chargebacks for a variety of reasons, causing merchantA business that accepts credit cards for goods or services. accounts for nutra businesses to be considered high risk by banks and regulatory bodies.
The label “high riskA merchant that is considered a high risk based upon the credit, product, method, ticket size or volume. Examples of high risk merchants are telemarketing, adult and travel related industries.” doesn’t necessarily indicate unlawful or malicious activity; high riskA merchant that is considered a high risk based upon the credit, product, method, ticket size or volume. Examples of high risk merchants are telemarketing, adult and travel related industries. simply means that a merchantA business that accepts credit cards for goods or services. account needs additional supervision and management to keep the account healthy and active.
Chargebacks are a major detriment to the nutra merchantA business that accepts credit cards for goods or services. account, and can occur for a multitude of reasons.
Product not as described or defective
» Nutra products are not as regulated as pharmaceuticals and the health benefits are often unproven and commonly disputed
» Dissatisfied customers who dispute credit card transactions.
Fraud is common for all categories of card-not-present businesses simply due to the absence of in-person, cardholder verification
» Actual fraud, where someone other than the cardholder purchases a product
» Friendly fraud, where the actual cardholder makes the purchase and later disputes the transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account....
Cancelled recurring transaction
» A merchantA business that accepts credit cards for goods or services. charges a consumer’s card after they have requested a cancellation
» A consumer isn’t aware or forgets that their card was to be billed – as in cases with a free trial period followed by monthly billing charges – and wants a refund
Chargebacks can be detrimental to a nutra merchant’s business, but with the right tools in place, can be successfully managed. The experts at NMA have partnered with an integrated, comprehensive suite of services to help prevent chargebacks, as well as suggested business practices to minimize disputed transactions.
Merchants not actively preventing and fighting disputed transactions are doing their nutra business a disservice. Maintaining a low chargebackThe act of reversing a sale made by the merchant. This can happen for many reasons including procedural and fraud. The process usually begins with a dispute from the cardholder. ratio is critical to the long-term success and prosperity of a nutra business.
- Banks often terminate merchantA business that accepts credit cards for goods or services. accounts with chargebackThe act of reversing a sale made by the merchant. This can happen for many reasons including procedural and fraud. The process usually begins with a dispute from the cardholder. ratios higher than card brand approved thresholds
- Having a high chargebackThe act of reversing a sale made by the merchant. This can happen for many reasons including procedural and fraud. The process usually begins with a dispute from the cardholder. ratio can negatively impact future merchantA business that accepts credit cards for goods or services. account approvals
Fraud Wrangler™
NMA has partnered with Fraud Wrangler™, a unique dispute resolution system and accompanying fraud-fighting platform that seamlessly integrates with nutra merchantA business that accepts credit cards for goods or services. accounts to prevent fraud and mitigate risk. Through integrations with the merchant’s CRM, leading fraud detection partners, and the merchantA business that accepts credit cards for goods or services. account, Fraud Wrangler™ prevents inbound disputes from becoming full-fledged chargebacks.
Fraud Wrangler™ was designed for merchants of all types and is specifically tailored for businesses that depend on e-commerce and card-not-presentA merchant environment where the cardholder (and the card) is not physically present at the time of purchase. Typical card-not-present transactions take place in businesses focused on mail order/telephone order, business-to-business, and Internet-based transactions.... transactions. Each element of Fraud Wrangler™ provides a unique benefit that enhances its effectiveness and ensures increased security and protection for merchants. Along with improved safety measures comes Fraud Wrangler’s ultimate goal of reducing dispute occurrences, saving merchants more time and money than ever before. From representment to fraud shield, Fraud Wrangler is an all-encompassing package designed to keep MIDs alive and active longer. Learn More »
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