Re:Why was a scam company able to raise $76 Million Series B?
by borlak on Sunday September 30, 2012 @10:34AM
(#4592944)
Also, if 1-2% of your charges through a merchant result in a chargeback, the merchant will drop you completely. However, a good scam company will have a few merchants lined up just for this reason.
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Re:Why was a scam company able to raise $76 Million Series B?
by tisme on Sunday September 30, 2012 @11:51AM
(#4593126)
> the merchant will drop you completely
You mean processor/bank/merchant account, not merchant. In the parlance of the payment industry justfab is the merchant in this story.
And yes, there are scammers that have processors / banks lined up but they burn through them at a rate of about 1 every 8 weeks or so, and each time that happens they forfeit a large amount of cash. There are not that many merchants willing to play the game that way.
50 chargebacks or 0.5%, whatever gets hit first and you're in trouble. Reputation damage to the CC companies and you're out for good. Merchant account hopping is not a long term viable strategy.