What is the difference between a refund and a chargeback? They both give the customer their money back, but there are substantial differences between the two. A chargeback is is a forced refund from a bank/credit card provider. Once a chargeback is issued, there is no way to refund a customer.

Probably the greatest difference is that when a bank/credit card provider intervenes on behalf of their customer, they charge the merchant a fee.  A refund, on the other hand is between you and your customer with no banking fees to pay.  Additionally, a refund is an immediate resolution to a customer’s needs. In many cases a customer will be satisfied with a credit toward a future purchase or a replacement for the item rather than a refund.

Too many chargebacks will eventually get a merchant account closed. In the case of 2Checkout, this means that our merchant account is the one at risk. To protect our merchant account standing, we do everything we can to lower the number of chargebacks we receive . Even though the bank/credit card provider intervenes, you still have the option to challence the chargeback. Since the process involved in challenging a chargeback can be quite time consuming and complicated, you may want to contact a customer about the chargeback to resolve any issues and potentially get the chargeback reversed.

As you see a refund allows you the opportunity to communicate with your customer, to come to a resolution, and to avoid additional banking fees.  This is one of the reasons why it is a smart business decision to include a clear refund policy on your website.

The Case Against Lower Prices -

In times of increased competition in a finite market, particularly when spending has been reduced, the question of how to increase sales arises. Economics and marketing provide us with many theories and strategies on how to make money - it is after all the basis of both areas of study.

There are different pricing models at odds here. One will tell you to offer the lowest price within your margins. This can result in higher short-term sales. That is, until your competition offers a lower price. What happens long-term with lowering prices? Does quality of the product/service lower as well? How about Customer Service and back end processes? If you eventually make only enough to just get by what parts of your business are you willing to sacrifice? Not to mention what happens when the economy stabilizes, how will your customers react when you start to increase your prices?

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For all you business owners out there relying on contracted help to run your businesses – which is pretty much all of you – it’s time to reevaluate the quality of your partnerships to ensure you are getting the most bang for your buck.

In times of economic uncertainty, the small business owner is often stuck in a position where they are at the mercy of a number of different businesses. Suppliers, distributers, and banks all need paid for their services. For folks selling online, web hosts, ISPs, and affiliates also weigh down the expense column.

As part of effectively running a small business, budgeting for the costs associated with “doing business” is a crucial job of its own that robs precious time from what most managers consider the most crucial business task — marketing and selling their products. So when one of your suppliers or business partners changes distribution standards or increases pricing, balancing costs versus revenue is an immediate challenge.

Within the vast e-commerce marketplace, we are proud of what we have accomplished. 2Checkout prides itself on the fact that in nearly 10 years of doing business, we have never increased our fees, nor cannibalized our service offering to make ends meet.

Businesses that opened 2Checkout accounts in February of 2000 pay the same fees today that attracted them to our e-commerce service nearly a decade ago and continue to benefit from the upgrades we make to our system. We have never added scaled fee structures or tacked on additional costs for the businesses enjoying increased sales and as a result are more reliant on the labor intensive portions of our service — such as our 24/7 customer care center and screening orders for fraud. Growth and the increase in responsibility for appropriately handling your increase in online sales, comes with the territory of being a service-centric business. And when your business succeeds, we are more than happy to grow to meet your needs and demands. That’s our promise.

You know the old adage — you get what you pay for! It’s very true. It’s important to note it doesn’t mean you need to expect an increase in fees to coincide with each year’s cost-of-living increase or be forced to manage more of the responsibilities associated with your online sales. In the world of business, you can compete on price or you can compete on service. Very rarely can you find a business that can do both. We are proud of the fact we have remained a consistent provider of quality e-commerce services at a steady price for nearly a decade. Dependability is a good quality in a friend, but crucial in a partner for your business!

Great news! Small business owner confidence is on the rise, and by no small margin.

According to a recent blog published by Small Business Trends, “the Small Business Optimism Index shot up by almost 6 points, to its highest level so far in 2009.”

The National Federation of Independent Business (NFIB) has been the nation’s gauge for small business owner optimism for years and even though overall optimism is still at historic lows, a six-point jump is a considerable increase.

At the least, the increase raises some eyebrows. If the boost in confidence is for real and not just a temporary spike, then small business owner confidence has risen above December 2008 levels and close to marks recorded in October and November. Most impressively, a significant one-month increase the size of April’s spike over March has not been experienced in well over five years. Of course, disclaimers are always in order, as a jump in confidence could very well be temporary, but regaining positive ground in times of economic uncertainty is always enlightening for small businesses, especially those who have invested in technology and positioned themselves to sell online.

The big question remains — what does this increase mean for a small online business like yours? If the indicators are correct, it means it is time to increase inventory, fine tune your advertising campaigns and prepare your site for an increase in sales from the “pent up demand” consumers are feeling from buying less and hoarding trillions of dollars in personal savings accounts that are yielding dismal returns.

The tide could very well be turning. It’s never too early to fine tune your online business to ensure you are ready to capture the business generated from a significant increase in confidence.

2Checkout.com is proud to announce that one of its treasury specialists and financial institution liaisons, Patricia Hull, will be a featured speaker at the 23rd Annual Windy City Summit, May 20-22, 2009 at the Hyatt Regency in Chicago.

The Windy City Summit features over 100 treasury management seminars for financial executives and treasury managers. This year’s session tracks cover banking, benefits and risk management, corporate financial and capital structure, fraud and compliance, collections, and payments, to name a few.

Hull will be speaking with Lynda Umbreit from KeyBank Thursday, May 21 at 3:55pm, in a session titled Creating Efficiencies Through Outsourcing the Payables Function. The session will focus on the efficiencies 2Checkout has realized by utilizing third parties to outsource its weekly payouts to vendors.