2014: The Year Of The Chargeback?
 

I have been doing this crazy online Adult business for more than five years now so have data stretching back to 2009. I have NEVER seen the level of chargebacks like I am seeing this year. Every single day (it seems) I am seeing chargebacks, refunds, voids - wtf is going on? Is anyone else seeing this dramatic increase in their chargebacks/refunds for 2014?

Nothing has changed in my basic overall setup, in fact I've been ADDING features to my Members Areas and making overall improvements in "user experience" (faster downloads, better streaming, new features, etc). Rebills are growing (yay!) but then I see the dreaded CBs on almost a daily basis, and this seems to have started in early January of 2014 and has continued throughout February.

Anyone else seeing this?

Perhaps your tours are not a good representation of your members area?

I have not looked at your sites, but it does seem odd indeed you would see such a dramatic change. I guess I would look at how your sites used to be versus how they are now, and what has changed. That would probably be a good starting point.

:2 cents:

i have not seen one in a long ass time (kissing a lucky rabbits foot) too bad for you

:2 cents::2 cents:

I would contact each and every one of those peeps who charged back with a genuine email sincerely asking them to please let you know why they reversed the charges. Even just a few replies back should give you some insight to any patterns pointing to where the problem is.

I'd get this nipped in the bud posthaste.

The 40 million people who got their cards hacked at Target are having an impact on this too.

good point, i totally agree with you

As I mentioned, nothing significant has changed in terms of my sites this year, and believe me going over every single tiny detail is how I spent my weekend. LOL I've learned to investigate and do my due diligence before bringing something to GFY.



Now that is an excellent idea!! Thank you. :)


This is what my 3rd party billers reps tell me, and it makes sense. In fact, it's what I convinced myself was the "reason" for the CBs in January - and I'm hoping that's the case in February, too, and that it slows down in March. But to see a CB ratio more than double last year's ratio (and three times what Jan-Feb was last year) is highly unusual.

I'm going to check my stats... oh... wait... sorry... no time for that... the bathwater is running...

I will take a stab.

This site is new:

http://www.pornnerdnetwork.com/

Not sure if you are promoting that site for signups. It's put together pretty well but I have a suspicion that no members area exists in that type of tube format... making members have to log into each site differently.

If so, my suggestion is to dump all your vids into that site as well so members log into 1 site. You can create a channel for each site and it would be well organized, all in 1 place.

Or it could just be a select few people decided to chargeback around same time.

You will never know why a refund or void is made because unfortunately you still are not doing that yourself.

Welcome back.

There IS a Members Area for Porn Nerd Network and once signed in you can bounce around to the various 32 paysites included. That site gets little traffic, it's just the "network hub", the actual paysites get much more traffic (and they have their own Mem Areas).

So I don't think it's the structure of my sites (which hasn't changed in a long time) but some other factors.

he also changed his entire network name recently..

This is a good advice.

Also, check to see who is referring this to you. Maybe you have an affiliate trying to rip you off.

It might also help to get some more data if possible. Contact your billing provider or gateway and ask if they can help you to see what is going on.

Good luck!

I appreciate the acknowledgement. :)

PornNerd, good luck getting to the bottom of it, since you're open to the idea of contacting the chargebackers directly, a couple more suggestions:

I would not reward them or offer a freebie or anything for replying.
Let them know you are the owner and you are apologetic that your product did not deliver.
You are contacting them because a chargeback is a serious matter with the bank, there's a $35 fee on top of giving the money being refunded back and chargebacks are nicks against your merchant account. to keep on good terms with your merchant bank you are hoping to get feedback re: the issue that led to the chargeback o you can correct it.

when nothing else changes and your chargebacks skyrocket, look first to your affiliates.

do you have any new affiliates doing a larger volume of sales?

do you have long time affiliates who's sales have all of the sudden increased?

check those guys out and see if you have specific webmasters with really high chargebacks. In the last few years we've had some webmasters who promoted PimpRoll for several years with no issues turn to fraud, guys who's sales had declined over time, I am sure it is tough to watch your sales go down and a few guys are bound to try some shady things to get back to where they used to be.

(not knocking webmasters here, but over time as you get more and more, you are bound to get a few bad apples).

also, you use third party billers, do you let any other companies cross sell your sites from theirs? Because even if your site is better than theirs, if they get more aggressive on their sales tactics and pricing, it will result in more CB's to your site. When customers are pissed, they are likely to CB both sales, not just the initial, or not just the Xsale. (I see you have no cross sales on your sites, so this is likely not it, but definitely something that causes problems at third party billers).

That's a great approach and one I will definitely take when contacting the Members who charged back. :) Thanks again!!


You bring up many good and interesting points. I will check out my affiliates since I've been advertising here on GFY since January and that IS a "change" (one I hadn't factored in before posting this thread). I am now checking those new affiliates, including existing ones, to see if I can track down what's going on here. Also, I do some Upsells in my Members Areas and have a few affs who Upsell my sites in their MAs so will contact them, too.

Thanks everyone for the great feedback!! :thumbsup

I have been analyzing stats and dealing with chargebacks for 5 years now, it's the main thing I do.

I see you noticed the target thing. That's good. I noticed it too and there was a dramatic spike of affiliate fraud in my network but I was ready for it and dealt with it.

Also be aware this about the time people are trying to get their CC balances down from the Holidays and at the same time are preparing for tax season and statements are being looked at closely. Buyer's remorse is, in my opinion the #1 cause of chargebacks.

I am going to assume, since I am not sure, that you have enough joins coming in to make your stats meaningful. That means at least 10 a day. Even that is pretty low, but any less than that and fluctuations in your stats are likely to be random and not meaningful at all.

All the tweaking you do onsite is going to affect your conversion and retention, but chargebacks will generally stay within the same basic parameters regardless of anything on your site, outside of pricing itself. (I have seen that anything over 24.95/mo can cause chargebacks to rise all by itself, regardless of other factors. - I see you are doing 29.95 which I believe SHOULD be the new 24.95 with inflation and all but consumers may not be on board with me yet)

To reduce chargebacks you need to do a combination of the following which I have ordered from most effective to least effective based on my experience:

1) Eliminate the affiliates who bring you chargebacks. Look at affiliate stats over a 30 day, 60 day and 90 day period and determine your base CB rate, then get rid of anyone operating at a higher rate. Start with the worst offenders and if you can get your CB's into the acceptable range then stop there, if not continue pruning till the problem is solved.

2) Analyze your joins and declines daily. Look for repetetive patterns in your joins. Repeat IP addresses, billing addresses, fake or strange emails. Look for commonalities in fraudulent transactions. This is another thing that's hard to do with 3rd party billing.

3) Increase the scrub settings on your biller. Unless you have a huge problem don't go too hardcore, baby steps. Remember every fraud scrub filter you put in place is going to raise false flags with legit purchases at the same time it shuts down thieves, so only scrub as much as you have to. If you use netbilling its easy. For CCbill you will need to contact your rep there. Probably the same for Epoch. There are some things they can do for you, not a lot but in general you are going to need to take control of that sooner or later by going private merchant.

4) Engage your customers. Be in touch with them. Make sure you are easy to reach in case of problems or questions. Make sure they know you are aware of them. I get very few chargebacks from people I manage to engage via email or telephone.

There is one more technique I have found to be pretty effective that I can tell you about but I won't post it on a public board because I think its too valuable for the unwashed masses to know about. You have me on IM so hit me up sometime and I'll tell you about it.

We can help you with this. Please go to ChargebackHelp.Com and take a look at our services. You can reach me at raja(((at))))chargebackhelp.com and we can get on a call.
Looking forward to speaking with anybody who needs help reducing their chargebacks.

This! If you get chrgebacks, the first thing to check it is: who bring the guys who chargebacked? Is that a specific traffic source? Normally it is.

Totally agree with this

This thread like all the others he makes is just a front so he can talk about how rebills are getting better and all the stuff he has added and people do not see the big picture about these threads he makes all the time.
How many threads are you going to make that start one way but go on and on about how you have been doing this for years and it is all getting better and better.
BULLSHIT

The Porn Nerd consider signing up for Post Chargebacks Recovery - No Upfront Costs!

If that were the case, then that would not exactly be the most sensible approach since catching higher cb ratios is essentially a really huge red flag for any site.

Of course creating a thread saying you have cb issues in the first place to me doesn't seem like a good idea either so who knows... :2 cents:

Thank you for the very excellent advice! I will hit you up via ICQ to discuss this other option tho I have an idea what it may be. LOL



YOU are a fucking tool so PLEASE go fuck yourself ASAP.
WHERE in this thread did I start talking about CBs then switch to how great everything is going?
Whatever your problem with me is I usually don't care but this thread is a serious discussion and you are chiming in with your usual BULLSHIT (as you put it).
Are you an Affiliate of Porn Nerd Cash? Do you promote any of my paysites?
If not then STFU since you know ZERO what you are talking about.
</Troll Bash>


I admit that I am not like your typical Program Owner in that I share what's happening as often as possible. Meaning: I don't do "PR" and bullshit this way or that; if things are going great (rebills increasing and higher payouts to affs) then I point it out. If something is NOT going well I point that out, too.

Now since I have begun advertising here on GFY I have noticed this CB issue so wouldn't it make sense to discuss this issue with the (possible) very people who may be signing up via my ads here? Maybe not, maybe yes...as I said, I do things my own way and have survived and grown for 5+ years so I will continue to honestly communicate the best I can, even if that makes my program seem....what exactly? The "everything is great it's all awesome!" approach is what asshats like Brian837 accuse me of doing anyway. LOL

No, it's better that I come here to discuss issues like this since this very thread has provided me some excellent approaches to dealing with this issue I would not have gotten anywhere else. We Webmasters tend to be isolated little islands, all running our own businesses the best way we see fit. So it's a good thing, I think, to reach out to others with more experience, expertise and insights. Call me crazy (many do). :)

Same Here
 

I have noticed the same phenomenon... I hardly ever had chargebacks but now I am seeing them every month...

I am not saying you do not have more chargebacks but how many times do you make a thread and use it to go on and on about how fucking great your shitty sites are?
You have done the same exact shit before and I laugh each time.
My 2 sites probably do more sales then 20 of yours and if I ever get around to redoing the other 4 I bet all of yours.
I will make sure to post a thread about it like you

You REALLY are a fucking moronic tool, aren't you?
I love fucktards like you dude, who obviously do not possess the ability to think, reason or calculate. I'll explain to your little brain what I mean in a second.

But first: as a Program Owner, trying to get affiliates to work with me (something you obviously do not do), it would behoove me to make threads touting my Program. As I responded to Far-L tho: when things are great I say it. When things are NOT great I say it, too. You would think this would earn me some credibility as I DO NOT always paint a rosy picture. Perhaps you miss those threads/posts and only see what you want to see?

Now let me explain, not just for your dumb ass but for any other idiotic fuck on here who thinks I (and my affiliates) do not make money:

I run 32 paysites. I have been in business for 5+ years now. My affiliates are earning higher payouts now than they ever have before with my Program. I recently raised my prices, not lowered them as many are doing. I also advertise right here on GFY. I attend Trade Shows both in the US and in Europe. I am about to launch an entirely new Affiliate Program and Network of HD paysites.

See? I'm a broke-ass loser just like you say. Maybe you need to tell yourself that in order to keep trolling like you do so this will be the last time I respond to anything you say ever.

Now go away and bother someone else.

I guess I never bothered to pay attention and notice this pattern you reference.

It sounds like he's doing well.

What's your site Brian?
I was a former affiliate of The Porn Nerd so I have a rough idea of his numbers. I can give you an honest opinion.

Although I agree that having 2 sites and focusing efforts on those, is better than spreading your talent too thin

Former? That's not good. When did you stop promoting my sites and which ones were you promoting? I believe I have joymii.com set to debut in my new Members Areas next week as an Upsell. LOL

The last three months I have been focusing on my new Affiliate Program and upcoming HD Network so have not added much to Porn Nerd Cash. This will change shortly so hopefuly you can start promoting us again OR (I think a better move) start promoting the new "erotic" Network when it launches in a few weeks. Everyone will know about the new Program when I begin promoting it here on GFY. :)

So anyways, what's the verdict?

Even using CCBill you can see the chargeback email right? And with that email is it associated with an affiliate?

We're going through the affiliate sales right now and should have a report by tomorrow. No CBs since Sunday...

I'm thinking of putting a menacing line or two in the Welcome Email that says: "Chargeback this purchase and you will be BLACKLISTED and unable to join any other websites. Your information will be posted online for all merchants to see and they will BLACKLIST your name, IP address and credit card number. Plus, we will take out Craig's List ads in your area saying what a cheating, lying motherfucker you really are and how you watch DIRTY NASTY PORN then post all your personal info with the line 'Contact me tonight for BDSM fun! Got anal beads!' DO NOT CHARGEBACK THIS PURCHASE YOU WEASEL FUCK. Enjoy your Membership."

Think that'll work? Let's test it!

I mean the following constructively, not personally:

As someone who's seen the members areas of your sites, I'd recommend you focus on creating a quality customer experience that doesn't leave subscribers saying "I paid my hard-earned money for THIS??" after browsing for 10 minutes. Because for 75% of those sites I'd be surprised if they had any other reaction.

Maybe even consider contracting the network into a smaller collection, so you can focus on presenting a quality product.

I'm going to say this nicely as well because you do work hard, at least from what I can see.

Chargeback issues are NEVER regarding the content. If someone paid 20 bucks, 30 bucks, and was disappointed they just cancel real fast.

Chargebacks are ALWAYS those that forget to cancel and see charges months later and call their bank or card institution.

And when I say Never and Always... that is about 99% of the time.

The other 1% is the people that are just anal and affiliate carders. Well that's not true either... cross sales will put you into an entirely new category. And Porn Nerd did say he was into that so I am putting my money on cross sales from other sites is his culprit.

Use coinbit.

Hey, welcome back beaner.

And yeah, I've gotta respectfully disagree with the "ALWAYS" part, even with the 99% qualifier. Some types of people do indeed use chargebacks as their primary option when they're really unhappy with a service. I've done paysite customer service in some capacity or another for over a decade, so my opinion comes from some experience but it is just an opinion. Agreed that what you describe is the majority though.

I only posted that because for some - not all - sites in that network, when I saw the members area I immediately thought "This is something people might actually chargeback for" - between the virus warning and both quality & quantity. That was a year or two ago, so maybe things have improved. But yeah, just my opinion and I'll leave it at that.

Interesting you would have this reaction - and I have a couple questions for you in a sec - because rebills are on the rise and customer feedback (via emails) is very positive. So I'm wondering when you saw the Members Areas because the latest design has been in place for about six months now. Not all the Members Areas are the same either, as twelve still remain from my 'amateur' days. LOL They are due to be re-designed in March so that all 32 Members Areas have the same basic templates (I don't know how many sites were in the network when you last saw them).

Finally, I have limited content so must therefore rotate what I do have. This has always been a limitation to some degree but I bolster my MAs with 2 seperate HD feeds which daily update and that's the first thing Members see when they login. I think this is why rebills are growing. Anyway, I would add a cool CMS, all kinds of features, more updates etc IF my rebills would go up and my CBs go down (makes sense, right?). But websites with KILLER MAs have the same exact rebill/CB ratios I do (generally) and I've explored this issue in many other threads. The days of the 6-8 month rebills are over no matter what anyone does. Yes we have members who rebill for months and even years but the MAJORITY of Members rebill 2-3 months. So instead of chasing non-existent rebills I instead focus on ADDING more and more to give Members value. By year's end PNN will have 40 websites and by end of 2015, 60 websites. :)

(I appreciate the feedback!)

Sorry I just missed this! OK that explains everything. LOL A year or two ago I was hit with a nasty virus that shut down my entire network for over a week. I had no backup then and learned the hard way. It took about a month to clear the virus warnings from search engines and security software!

Since then the MAs have been totally overhauled and about 14 new websites have been added. :) I would love to have you take a new look at them when the latest versions (with updated Sponsers upsells and cam white labels) hit next week. :)

Our chargeback ratio has gone way up just in January and February. Don't know what happen in coming months... nothing has been changed like you said. We are closely monitoring every single transaction but still no luck.

Lol!

.... and true

You guys seeing a difference with Visa or MC? Or about the same % more CB's for both?

You're probably getting banged with affiliate fraud or BS transactions from an unfriendly competitor.

Brad

Still waiting for the report from CCBill then I will post the results here.

These fraud report things take time apparently. :(

CB's are going to climb for some time and it's a direct affect of all the security breaches at retailers. Millions of cards are stolen and are now changing hands for profit online.

This is about the only real reason i can find for the higher CBs this year so far.

The results of the CB analysis:

Nothing strange (!) They're not coming from any one affiliate (in fact only 2 out of the 16 came from affs). They're not coming from any one paysite (16 were spread out over 11 sites). 3 of them came from joining what I consider 'bonus' sites which only receive maybe 50 hits a day. In fact, when I got those sales I thought 'Yup that's a mistake...' LOL

So I guess we'll wrap it up to bad timing, Christmas hangovers, the Target fiasco, etc. Still waiting for comparisons with last years Jan-Feb CB rates but the fact remains chargebacks are (this year) up 250% or 2.5x what they were for all of last year.

Bummer.

13 Visa, 3 MC.

How many came from outside cross sales?

Yes but how does that compare to other months, this is saying nothing ;)

Sorry you are right. :)

Jan-Feb has seen 2.5x the number of CBs from any previous 2 month period going back to 2012 so i was focusing on the 'large number' issue. Breaking it down to Visa vs. MC previous CBs were:

85% Visa
12% MC
3% other (debit etc)
(This is for 2012 & 2013)

So the 13-3 Visa-to-MC ratio I mentioned for Jan-Feb 2014 is about average.

Beaner: Only one came from cross-sells.

Porn Nerd,

It would be great to talk to you about what you are doing for scrubbing, handling cancellations, disputes and who you are using for processing and what control you have over everything.

Let me know if you would like to do a call.

email me directly. mitch (at)netbilling.com

Thanks, Mitch

Fair enough and not going "by the book" is usually the best remedy for avoiding many problems.

For what it is worth, I guess GFY would have a lot of experts on the subject... :winkwink: