Fraud + Chargebacks !!

[domainAddict]

Lets say you are (re)selling domains, and sell about 20 a day. Your profit is $1,7 per domain (after all fees are deducted - credit card processing, original price, etc). Im using 2checkout.com, and their chargeback fees are up to $15 as I can se from their FAQ. So one single chargeback, would cost me what I earn with about 9 domains. So 1 chargeback a day would cost me half of my profit, not to mention that I would have to pay for the chargedback domain myself, so at the end, one chargeback a day results in 0 profit to me.

How do you guys manage to avoid fraud and chargebacks that result from it? If you have any experiences in this field, or could give me some advice, I would be more than glad to listen
Thanks.

PS: I mentioned domain names, since there is less profit than in webhosting. Reg fee for the charged back domain is your expense, thus each chargeback is much more expensive to seller (not just $15 that cc processor debts you).

 

[DomainPairs]

My feelings are that unless you can get a substantial volume of registrations via the net it's not worth reg'ing for people you don't know.

To refer more directly to your question, you may be able to reduce the potential for chargebacks by requiring a pre-payment account. This would of course cut out the new impulse buyer.

 

[GiantDomains]

If you are using a payment solution such as 2checkout, and not a real merchant account, I would not charge less than $20.00 per domain, to cover yourself. At the $1.00 range of profit per transaction, you are taking a huge risk. If you sell 50 domains, and 4 of them are chargebacks, you are already in debt.

 

[domainAddict]

Thanks! Well, If I would be selling domains for $9.95 then my profit would be $1.7 per domain sold (when I deduct $6.95 enom+3% enom cc fee, 5.5%+$0.45 2co fee). I chose $9.95 price, since this is a price I think would still be able to make more than few registrations if marketed properly. I guess everything over $10 doesnt sell as well, since there are so many "registrars" offering for less. Am I wrong? Are there still lots of people not aware of this and buying domains for $20 and more at register.com and other shitty sites? Thanks.

PS: Any one here selling domains? What are you prices, and what cc processor you use?

Also Doberry, could you reffer me to some good merchant account provider, with good fees and service offcourse? Thanks. (ps: im about to incorporate an offshore company in state of Delaware, USA).

 

[ObtainADomain]

Charge back fees can really cut into your profit but to date I have only experienced one so far.

My reseller account for Godaddy (ObtainADomain.com) charges 8.75 per domain and this comes with all of Godaddy's free services like URL forwarding, etc.

My Enom reseller site is still being built as I do not know PHP.

ObtainADomain

 

[domainAddict]

obtainADomain: Thanks for your input. May I ask how many domains do you sell per month, and for how long have you been selling them? I like your 1 chargeback , but i dont thinks this is reality in most cases You are lucky I guess, or perhaps godaddy has some good way to trace frauds.. Also, how much do you make per domain (after you deduct all the godaddys fees - 25% of revenue and their reg fee)? thanks

 

[EM @MAJ.com]

Originally posted by doberry
If you are using a payment solution such as 2checkout, and not a real merchant account, I would not charge less than $20.00 per domain, to cover yourself. At the $1.00 range of profit per transaction, you are taking a huge risk. If you sell 50 domains, and 4 of them are chargebacks, you are already in debt.

Very nice suggestion from doberry.

I have this experience running my own merchant account (2checkout) with no fraud protection. Basically, every fraud transaction was billed to me, lost of business on my part. Just to lower my business overhead (operating cost) and protect future transaction. I've use PDQ of enom to transact domain name registration, this offer fraud protection. All I have to do is market my website and not to worry about fraud transaction..

cheers,
tw

 

[domainAddict]

Originally posted by TheWatcher


Very nice suggestion from doberry.

I have this experience running my own merchant account (2checkout) with no fraud protection. Basically, every fraud transaction was billed to me, lost of business on my part. Just to lower my business overhead (operating cost) and protect future transaction. I've use PDQ of enom to transact domain name registration, this offer fraud protection. All I have to do is market my website and not to worry about fraud transaction..

cheers,
tw

But I dont like the layout of their PDQ website Its so boring and simple, and i cant customize it - cant add other products that i sell (ie: templates and stuff..) Thats why I dont signup for PDQ. If Im wrong, please correct me.

ALSO: cant you trace the IP and report those scammers to their ISP and police?

 

[EM @MAJ.com]

You are actually correct regarding the PDQ template, though you have ways to extend the template. Basically what I did is, use the PDQ and extend the site with my portal design, where I do extra business (products and services).

With the current setup of PDQ, IP was not shown during registration. Though the API, you will be able to add this feature.

Cheers,
tw

 

[ObtainADomain]

Domain Addict,

Thanks for explaining that you didn't intend the post the way I had interpreted it.

I hadn't taken my metamucil the night I read your post and I had read too much into it.

ObtainADomain

 

[domainAddict]

Originally posted by ObtainADomain


Ouch! I just got stung by the Domain Addict. Now I see why people like to blame him for things. The message he barely conceals in his post: "ObtainADomain: Thanks for your post (not!) but don't you ever post again, loser. You are either a liar or you don't sell any domains. You must have been only selling for 1 day. Your are completely irrelevant. Based on your price you don't make any money at all." Ouch!

Thanks a lot Domain Addict, your condescending remarks are so friendly. How to win friends and influence people: its called "tact." Let me demonstrate for you how you could have written this question:

ObtainADomain: Please explain, 1 charge back is very few in my experience and how much profit do you make after all the fees?

Ah that question is so much better and I still have my dignity intact. Let me explain:

Godaddy doesn't give you the freedom to set your price lower than 8.75 because they feel this is the lowest price where you can still make $: wholesale: 6.75, + credit card transac fee: .25 + Extra fee: .23, total cost to me: 7.23. Total profit: 1.52 per domain (not including charge backs). My profit is low but my plan was to leave my prices low for the first 6 months to build up a base of customers. I never claimed to be a major reseller and I'm certainly no "ult Search" of the Domain reselling world. I'm a Real Estate Broker who dabbles in domain names as a hobby. I get my Real Estate Customers, friends, co-workers, family, and acquaintances to buy from me and pass along that I'm selling and I suspect that this is why not many chargebacks as I'm not getting many impulse type of buyers. And no, I did not start my domain hobby last night.


ObtainADomain

ObtainADomain: Dont jump to conclusions prematurely.. My post wasnt meant to diss you or anything. Perhaps I could written it differently, but I like to ask what I need to know directly rather than around the corners. And even if you were selling just for one day, or perhaps sell only two domains per month, I wouldnt care (i know its not easy when already so many people are already doing this). Dont feel offended, I was really just curious to see whats the reason for your 1 chargeback. I just wanted to see the whole picture, thats why I asked you this. I wasnt aware you are so sensitive sorry..

PS: People like to blame me for things? Not sure what you are talking about, but if youve mistaken me for another member named "addictive" or whats his nick, thats not me..

Have a nice day, and go heal your wounded soul now (dont get mad again, just kiddin )

 

[ObtainADomain]

Domain Addict,

Thanks for explaining that you didn't intend the post the way I had interpreted it.

I hadn't taken my metamucil the night I read your post and I had read too much into it.

ObtainADomain

 

[GiantDomains]

Watcher is correct, with PDQ, you are basically an agent for enom. You should not receive chargeback fees.

If you use API, and your own payment solution, you are bound to the terms of service of that service, and chargeback fees can be as high as $25, OUCH!

 

[domainAddict]

Yeah. And not to mention the reg fee for domain. Just imagine somebody regs a crappy .tv for 10 years and it gets charged back!? SO WHATS THE SOLUTION? NOT TO GO INTO THIS BUSINESS AT FIRST PLACE?

 

[PACKERGARE]

when i did a business on e-bay i get him for a 400.00 cb from japan