NACHA's  2.5% chargeback threshold and what          it means to you.
  April 28, 2003

 
Dear wayne,

Hello.

Welcome to our inaugural newsletter (ezine). We hope you find it informative. Don't forget to visit the member tools site here to get FREE tools like routing number and phone number look up, public records and many many more.

Download our Free ebook on saving money using ACH processing here

NACHA Rule Change

NACHA the organization that governs electronic transactions recently adopted a new policy concerning chargebacks.

Chargebacks refer to a consumer or business "overturning" a transaction by going to their bank and complaining the transaction was done w/o authorization.

Most of you processing ACH transactions for any length of time have probably had at least one.

If so you probably also know that the consumer often times is flat out lying when they say they never authorized the electronic debit. Unfortunately the consumer's bank usually just goes along with them and reverses the transaction. NACHA sees that there are companies who push the envelope when it comes to securing the consumer's authorization to debit their account and their aim is to shut these people down.

Click Here to use the members tools site »

Return Codes

R07's, R09's, R29's are the return codes that must total less than 2.5% of your total transactions.

R07 means the consumer revoked their authorization, R09 means they say they never gave authorization for the debit and R29 is a company or business saying they didn't authorize the transaction. For a complete list of return codes and their matching reason you can click here.

What does it mean to you? If you get very few of the R07 or R09 returns it doesn't mean much at all but if you are close to those number you can expect to hear from the processor. If at or above the 2.5% you might face a higher $ return fee for these transactions and a warning to bring the % down. It is possible a reserve (or higher %) would be taken by the processor.

If your business is near or over this 2.5% threshold you can reduce it by:
* making sure people can get a hold of customer service.
* giving money back to the complainers. It just isn't worth the aggravation.
*implementing an automated follow up. You can use Autoresponders (find out more at the members tools site) to send a series of follow up letters that answer FAQ's.

I hope this info was of use to you. We'll be sending bi- monthly issues to start so look for the next issue in 2 weeks.

Visit the member site to view the tools and play the golf game-it's fun. Have a profitable week.

Sincerely,

Wayne
Cash Flow Technologies ACH-Payments.com
 

email: wakey@acheftproviders.com
voice: 518.580.0098 518.581.7662

 Dealing with Chargebacks

It can be very frustrating when you have an authorization from the customer or a voice recording. So what can be done?

Contact the customer's bank (you can get the bank's phone number on the members tools site)
Ask to speak with their ACH department and give them the customer's name. Let them know you debited their account and have the authorization or voice recording. Show them the evidence.

Depending on the bank they will re-reverse the transaction and you 1) get paid and 2) don't have an R07 or R10 to count "against you".

It is also a good idea to fax the authorization or e-mail a digital file with the VR to the processor's underwriter. Contact us to get this info or if we can help.

If you are doing telemarketing or higher risk ACH and are concerned about being able to continue processing we can help secure "high risk" ACH accounts and we can open a bank account and print and deposit bank drafts for you. Contact us.