TAMPA BAY, Fla., Jul. 7, 2015 /PRNewswire-iReach/ -- Amazon
Payments recently announced several fee changes for U.S.-based
merchants using Pay With Amazon, Login and Pay with Amazon, and
Checkout by Amazon: authorization fees will become nonrefundable;
cross-border processing fees will increase from 2.9% to 3.9%; and
merchants will be subject to a $20
fee when disputing chargeback claims. (1) Chargebacks911, a leading
dispute mitigation and risk management firm, warns that Amazon's
new chargeback fee will exacerbate the costs of friendly fraud;
consequently, the company advises online merchants to implement an
effective chargeback management solution as the best defense
against financial losses.
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While Amazon Payments protects its merchant partners against
chargebacks resulting from criminal fraud for transactions
identified as "unauthorized payment," (2) merchants are held liable
for all other chargeback reasons, including those commonly
associated with friendly fraud. (3) The term "friendly fraud"
refers to a form of online shoplifting in which customers dispute a
legitimate transaction and bypass the merchant to obtain a refund
directly from their issuing bank. In such cases, the seller not
only loses the merchandise, the original revenue, and the shipping,
handling, and processing costs, but must also pay bank-imposed
chargeback fees that typically range from $10 to $40 per transaction.
"Amazon's new representment fee underscores the rising costs of
chargebacks, but it can unfairly penalize innocent merchants that
are the victim of friendly fraud," stated Monica Eaton-Cardone, co-founder and Chief
Operating Officer of Chargebacks911. "When a customer initiates a
chargeback for an order the seller fulfilled in good faith,
virtually every scenario results in a financial loss to the
merchant. The retailer either forfeits the sale, merchandise,
shipping costs, and chargebacks fees or is forced to pay Amazon a
$20 'disputed chargeback fee' if
attempting to recover those lost profits."
Eaton-Cardone maintains that the new representment fee protects
Amazon's profits at the expense of merchants, and notes that
friendly fraud will likely continue to grow unless banks work
together with merchants to identify and halt illegitimate
chargebacks. She asserts that consumers should be required to
follow the proper procedures for disputes and refunds before being
allowed to initiate a chargeback, and sees this as the first step
toward long-term behavioral change that can help reduce friendly
fraud.
In the meantime, Eaton-Cardone urges merchants to take a
proactive role in preventing chargebacks in order to preserve their
bottom line. "If Amazon is going to charge you for each attempt at
recovering profits, you need to make sure you're doing everything
in your power to prevent those chargebacks from being filed in the
first place," she explained. "A good chargeback management strategy
can help merchants minimize credit card disputes and chargebacks,
retain more revenue, and achieve sustainable growth."
Chargebacks911's recent article on the Amazon Payments fee
updates provides an in-depth analysis of the new fees, policies,
and merchant implications. (4) For more information on
Chargebacks911 and its risk management solutions visit,
https://chargebacks911.com/preventing-chargebacks-ebook/.
About Global Risk Technologies and Chargebacks911:
Global Risk Technologies is most known for its role in payment
processing solutions that cater to each side of the value chain:
Chargebacks911.com and eConsumerservices.com. The firm is
headquartered in Tampa Bay,
Florida, with offices in Ireland and Atlanta. They have approximately 350 employees
worldwide and currently manage over 200MM transactions worldwide
each month.
Chargebacks911 is a division of Global Risk Technologies, and
was developed specifically for merchants to offer immediate aid
through proprietary technology and provide the necessary function
that gives merchants the freedom to focus on their core competency
and optimize their in-house skill set. Chargebacks911 focuses on
chargeback mitigation and risk management. They specialize in
servicing Internet merchants and acquiring banks, offering dispute
response solutions and deep analytics. Chargebacks911 works with
their client base to help them keep dispute rates down and retain
their ability to accept credit cards. For more information, visit
www.chargebacks911.com.
1. Amazon Payments. "Fee Updates"; accessed
June 24, 2015.
payments.amazon.com/feeupdates
2. Amazon Payments. "B6: Payment Protection
Policy"; Amazon Payments, Inc. Customer Agreement; last
updated March 9, 2015.
payments.amazon.com/help/201212430
3. Chargebacks911. "Chargeback Reason Codes
Associated With Friendly Fraud"; Chargeback Reason Codes;
March 11, 2015.
chargebacks911.com/knowledge-base/mastercard-and-visa-chargeback-reason-codes/
4. Chargebacks911. "Pay With Amazon Issues New
and Increased Fees for Merchants"; June 11,
2015.
chargebacks911.com/pay-with-amazon-issues-new-and-increased-fees-for-merchants/
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SOURCE Chargebacks911