A lot of merchants are losing potential sales because they simply will not accept any credit cards mainly because of the fear of charge backs. If certain steps are taken the possibility of charge backs are eliminated. A lot of this can be learned by reading the terms and conditions of any merchant agreement as well as the terms and conditions for the individual cards.

Many new merchants will simply sign an agreement giving them the ability to accept credit cards without ever reading the terms and conditions. I know this because I was one of them. I had to learn this information the hard way. I know of several companies, sell both tangible and intangible goods, who have never had a charge back because they simply follow certain steps.

In short;

1) Get a tracking number when shipping

2) Get the customer to sign an authorization form

3) get the customer to say ?I authorize so and so amount to be charged to my card for the following product? make sure that this is recorded.

Before going into the explanation of these 3 steps let me first give the examples of a couple of scenarios;

Let's say someone has a Yahoo or Ebay store. Numerous studies have been down that have shown that if you don't have some way of accepting credit cards that you are giving up over 90% of potential sales.

Some consumers say they are afraid to use their credit cards online because of all the threats of theft. Most merchant services require the card holder to not only enter their card number but also the expiration date and on the back to the right of your account number there is another number which is 3 or 4 digits depending on the type of card. With all this info the oonly way your card could be used without your permission is if the actual card had been stolen.

Eventually, along with your numbers will most likely be the requirement of either your fingerprint or a retina scan. This technology is right around the corner. In the meantime when using your card make sure that the site you are using your card with uses what's called SSL encryption.

Back to our 3 steps, with item number 1, even if you are selling a product that is not a tangible item, put some documentatiuon like maybe a welcome kit on CD and ship this product to your customer. Make sure that you use a service that uses tracking numbers and will show whoi signed for the product.. If you are selling something like an ebook then put a copy on CD and ship it to your new customer as a backup copy.

With a service like Paypal, if you can show a tracking number when you ship the product and Paypal can see that someone signed for the product when it was delivered then you will never get a charge back from a service like Paypal. Now if you combine this step with either step 2 or 3 then you have a better chance and winning the Lotto then you do of getting a charge back.

When you a buy a product from a merchant like Walgreen's or your local grocery store the reason that you are not able to dispute the item is because at checkout you actually sign a credit card authorization form. A friend of mine, who takes his orders via the telephone always faxes the customer an authorization for and has them sign it and return it before any product is shipped. Companies who are charging for a service would be protected if they followed this procedure.

I have talked with the actual credit card companies like Discover, Visa, MasterCard and American Express about this. I once bought a software product that was supposed to do certain things. I tried to dispute the charge but because I had signed an authorization form and because the company had shipped me a backup copy on CD I was not able to dispute this charge. Discover told me that all they cared about was that I received the product. I lost $500 for this software because the damn thing didn't work.

The final kicker would be if you had recorded this transaction. Before doing this you need to let the other party know that they are being recorded but if I were to charge for a $5000 cruise and the travel company let me know that the transaction would be tape recorded then even if I never went on this cruise the only way I could get reimbursed is if the travel agency decided to issue me either a refund or a credit.