A chargeback is a dispute between a customer and the business. In this video we explore what a chargeback is, and some of the reasons that chargebacks occur.
If you get too many chargebacks your merchant account can be shut down. In this video we explore what you should do to keep your account in good standing if you've been targeted by fraudsters and suddenly start receiving a lot of chargebacks.
Card testing is an increasing problem for #ecommerce merchants. Fraudsters are constantly looking for ways to test cards. It's even a problem for payment processors, Visa and Mastercard. In this video David explains what card testing is, why fraudsters do it, and how to stop it, in addition to advice on how to get some of the fees reversed when it occurs.
Hello, David here at Merchant-Accounts.ca. Today I'm going to tackle a very frustrating topic. Sometimes it's infuriating. What do you do when you get a chargeback and you lose it and it's completely unfair? What's left? Stay tuned, I'm going to do my best to help in one second.
In the past the best way to manually screen suspicious orders was to call the customer on the phone and ask them questions. Now, with modern web based video technologies it's possible to validate customers in a way that was never previously possible.
Visa is addressing some of the most common chargeback related complaints from merchants. Going forward, chargebacks are a thing of the past and will now be known as disputes.
A positive AVS result is an indicator of a legitimate transaction. In this short explainer video David explains what AVS is, how it works, and things to be aware of when relying on an AVS security result for any particular order.
David explains what two factor authentication is, how it works, and how it shifts chargeback risk for fraud onto the card issuer and away from the merchant.
How does Visa and MasterCard chargeback arbitration work? When a merchant has fought a chargeback and lost there is still one more chance to turn it around by taking it to the card brands for arbitration.
There is a strong argument that 3DSecure (version 2) is the single best anti-fraud tool available to any online merchant. In this video David explains what 3DSecure is, how it works, how you set it up on your website, and different ways that it can be configured.
Pre-authorizations are one of the best tools available to prevent fraud. A pre-auth will enable you to return security results for the order, such as AVS and CVV security checks. More importantly, it gives you a chance to evaluate the order and determine if you want to accept the sale. You are fully protected because you can't get a chargeback until you capture the funds from the pre-authorization.
Merchants have to keep chargeback percentages under the allowable Visa and Mastercard chargeback thresholds. (For more info on chargeback thresholds see: https://www.merchant-accounts.ca/visa-and-mastercard-chargeback-thresholds-2023.php). The problem is that some types of businesses simply get more chargebacks than others. David explains a strategy that some businesses can employ to lower their chargeback ratios, and prevent you from ending up on a Visa or Mastercard chargeback mitigation program.
The first in our fighting chargebacks series concentrates on fighting fraud reason code chargebacks. For e-commerce and card-not-present merchants fraud chargebacks are usually the hardest ones to win. The challenge is that you have to prove the cardholder is who they say they are, and that they actually ordered the item or service in question. It's a very uphill battle if you try to combat fraud it after the dispute has already been received. With this reason code, you really do need to take a preventative approach. The purpose of this series is to give business owners an idea on the best way to respond to certain types of chargebacks, but for fraud in particular - the battle is mostly won prior to you even shipping the order. Ultimately, if the cardholder didn't actually buy the item or service in question you can't win, so in this discussion David also talks about ways to validate orders.
What is shopping cart software for e-commerce?
(Slightly edited from video transcript for greater readability)
Key Takeaways
1
Shopping cart Definition
The shopping cart software powers the "Add to Cart" buttons on your website. It's what allows users to shop for things as they browse your website.
2
Features
Shopping cart software includes features such as product catalog management, order processing, and real time shipping quotes.
3
Pick the right type for you
Your level of technical expertise will determine what is a good choice for you. (Hosted, headless e-commerce or open-source options.)
Need help with this topic? Or a rate quote?
Whether its questions about this article, or you want to see how we can lower your costs. Don't hesitate to contact us.
Hello, David here at Merchant-Accounts.ca. Today I'm going to tackle a pretty simple topic. What is a shopping cart or what is shopping cart software? Stay tuned, we'll dig in in one second.
Shopping cart software
Shopping cart software is needed for an e-commerce website. If you've been on an e-commerce website and considering it's 2022, you probably have. You will usually encounter it when you're navigating and there's an add to cart button. Let's just work with the example of an online clothing store. You're buying a large t-shirt and the colors black, and you want two of them. There's probably a dropdown box for quantity, color, size, then add to cart. When you click that button the website remembers: "Hey, this guy wants to buy this shirt here", then you'll continue shopping. You'll click on a baseball cap or whatever else you want, then you will click proceed to checkout. The shopping cart is a software that's keeping track of all that information. When you click proceed to checkout, the shopping cart has a couple of jobs to do. See figure 1 below.
Figure 1 Shoping Cart Software Example
It says, "Hey, this Dave, he has a large t-shirt and that's $20 bucks. And the baseball cap is $15. So he owes us $35". But wait, there's more, there is tax Dave's in Ontario and HST is 13%. So the shopping cart figures out how much tax is due. And then it says, oh, and he wants it next day, FedEx. He must not want to do laundries out of t-shirt it's okay. Overnight shippings another $20. The total is I can't do it in my head $52[$59.55]. I have no idea, but the whole point is that shopping cart software has figured out how much I need to pay for this stuff. Then at that point, the shopping cart talks to the second component of an e-commerce transaction, the payment gateway. So the shopping cart says, Hey, payment, gateway. I have this guy, Dave, he wants to buy this stuff.
The amount is $52 [$59.55]. Here's his credit card number. Can you go ahead and process it for me? And then the payment gateway receives the request, it approves the transaction is approved and the money is deposited into the merchant account. This presentation's not about the gateway and the merchant account it's about the shopping cart because the shopping cart is then in the same way, the shopping cart asks the payment gateway to process the transaction. The gateway responds: "Hey, shopping cart, we just approved that transaction, all in one second." Now this is where it gets interesting. The shopping cart has a whole bunch of jobs to do. It's doesn't just keep track of what you wanted to buy. You bought it, therefore it's gotta do stuff. It has to send the receipt out to the customer, has to send the order notification to the merchant. See figure 2 below.
Figure 2 E-Commerce Components
Order Fulfillment
Maybe you have an automated shipping system in your warehouse, it would possibly make a database query to your inventory management software for your business. It knows to take one t-shirt and one baseball cap out of the existing inventory. If you have an integrated accounting system, maybe the shopping cart then sends data to your accounting platform, maybe QuickBooks or similar. QuickBooks updates your bookkeeping records to show another sale has been made. I'm not intending to make this too complicated, but picking shopping cart software is an important choice. Going with the first one that you look at because it looks easy, actually is fine. If you're a young e-commerce business, but if you have a more established e-commerce business you'll know things that could be improved. You'll know there is room for improvement because you're probably pretty frustrated about some things, some menial tasks or chores that take up a lot of your time.
Also, something to keep in mind is I told you that when an order needs to be processed, the shopping cart talks to the payment gateway. Here we will talk about integrations or compatibility. That means the shopping cart knows how to talk to the payment gateway because the payment gateway listens. It is reactive in the transaction flow, which means the shopping cart has to be integrated to the payment gateway. The payment gateway sets the standard the shopping cart integrates into it. I don't want to make this complicated suffice to say that when you're picking a shopping cart software, you should already know what payment gateway you're using. This is a really important point that people overlook because sometimes people will set up an e-commerce website and then attempt to establish payment processing. Unfortunately it turns out that shopping cart software isn't compatible with many payment gateways. In fact, that's kind of a a real problem, and it happens more frequently than you would expect.
Conclusion
At Merchant-Accounts.ca, we do a lot of consulting on issues related to shopping cart platforms and integrations. For example, on our website, we have a list of approximately 150 compatible shopping carts, which is completely impossible to keep up to date. It's really impossible. My advice to any e-commerce merchant, unless you're very sophisticated and you just know your stuff, either you have a development background, or you've just been in e-commerce for a long time. If you don't have that expertise, you should talk to a payment processor. It could be us Merchant-Accounts.ca or another payment processor, but you want to make sure that your infrastructure will work together very well. And there's even other considerations such as I'm not trying to make this complicated, but on your shopping cart software, do you want to charge in Canadian dollars and US dollars and Euros or is all your pricing going to be in US dollars? I set out to demystify this and make it easy. I feel like I've just been stacking complexity on top of it, but I hope I've demystified a little bit of what shopping cart software is if you want any more information, if you want a free consultation, reach out to us at Merchant-Accounts.ca we'd love to help you out. Thanks for watching and have a great day there. Bye now.
If you're building an e-commerce website, you don't want to spend all that money and have it not work. That can actually be a legitimate fear too, because if your project is not well planned you could run into issues. In this video David explains the concept of shopping cart compatibility, and how the e-commerce software that runs on your website connects to your payment gateway.
David breaks down the current interchange rates for e-commerce merchants in Canada for 2023. These figures were taken directly from the Visa and Mastercard Canada interchange tables. These interchange rates apply not just to e-commerce transactions but also virtual terminal and other card-not-present type transactions.
Out of the box WordPress is not e-commerce capable. It needs special technology to enable e-commerce capability.and other card-not-present type transactions.
Do you want to understand how e-commerce works? David explains both the technical components, and also the most important business considerations when building an e-commerce business.
How do you choose the right shopping cart software when building an e-commerce website? If you choose incorrectly you might need to rebuild your website in the future. David shares tips on how to pick the right shopping cart software for your business.
Need professional guidance? Contact us for a free one hour consultation.
Can I Help Lower Your Processing Fees?
If you found this content helpful, will you give me the opportunity to quote on your business?
My name is David Goodale, CEO at Merchant Accounts.ca. I launched our business in 2001 and have over 20 years of expertise in the field of online payments. If you have a payments related question or project, and especially if it relates to multi-currency or international e-commerce don't hesitate to contact me. I'm always happy to help with an honest opinion, and enjoy chatting with folks from interesting businesses.