

Chargebacks can kill crowdfunded businesses - vonnik
http://blog.airbriteinc.com/post/68281049873/chargebacks-kill-crowdfunded-businesses-you-can-avoid
Chargebacks are basically refunds. But they happen before you ship. Early-stage hardware makers and product design firms usually get hit during their manufacturing lag. If more than 1% of your total transactions result in chargebacks, credit card companies can refuse to let you process payments with their cards. And that&#x27;s game over.
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us0r
So much wrong with this.

"Chargebacks are basically refunds. But they happen before you ship. "

No they can happen at anytime (including past the 120 day point even though
that is supposed to be the cutoff time).

"Credit card companies generally cap the amount of chargebacks at 1-2 percent
of a company’s total transactions."

No Visa and MC set this and it comes with an AND clause. So you if you sell
100 of something and 1 person charges back - you are not going into a
monitoring program.

"If your chargebacks exceed that, they limit your ability to process payments
from their cards. Which means you won’t be able to sell online"

Also not true. Even if you have a TMF you can still find banks who will
process for you (assuming you are actually a legit company).

"you don’t have to worry about chargebacks shutting you down."

You always have to worry about chargebacks.

"lets you do take orders and avoid chargebacks"

Like any other merchant account? You have nothing special which “avoids”
chargebacks.

"There are two other solutions, both of them flawed. "

No. Several solutions to the problem. One option is a $0 auth to the card then
try to bill when you are ready to ship. Any merchant account will support
this.

"you can take all the payment and order information you need, sidestep
chargebacks"

Nothing "sidesteps" chargebacks.

