Kim Forwood,
12-Mar-98 12:55:08, Kim Forwood wrote to Steve Stacher
 SS> On 11-Mar-98, Kim Forwood was avidly discussing Re:
 SS> Registration with Steve Stacher
 KF> To be honest, I've recently become a little suspicious of
 KF> credit card handlers. I signed a contract with a company in
 KF> the US called Albert's Ambry (http://www.alberts.com), who
 KF> handle credit card orders and supposedly propagate software
 KF> for authors, for 20-25% of all sales through them.
That is a very low percentage.  They have to be doing a large volume
to cover their overhead expenses at that rate.  Consider that many
retail store fronts have 125% mark up.  And many businesses spend
40% of their gross in marketing.
 KF> In the last year that I've been signed up with them I've had a
 KF> total of four sales... three of which were made immediately
 KF> after my software was first released, and the last just a
 KF> month ago. Unfortunately, I have only seen one of those
 KF> registrations to date. I'm supposed to be paid my registration
 KF> fees once every three months, but by the time I get them (or a
 KF> report on sales), there has been what they call a
 KF> chargeback... where the purchaser has supposedly purchased my
 KF> software with a bad credit card and so my fees aren't
 KF> forthcoming yet my software was still delivered. Now this may
 KF> sound plausible, but how do I know that I'm not being duped by
 KF> Albert's Ambry and they're keeping my registrations?
Have Albert's Ambry send you a copies of the official chargeback
statements they received from their credit card processor.
 KF> So you see, it's just as hard on the authors in this business.
 KF> We are for the most part people without a lot of money or
 KF> means to do business with people in other parts of the world,
 KF> other than to put our trust in someone else's honesty in order
 KF> to make this work for everybody. But when experiences like my
 KF> own show that using a third party to handle money transactions
 KF> may be a bad idea, there is little more we can do as
 KF> individual authors.
IMO you have not shown trust in Albert's Ambry.  Authors can help or
hurt their Reg-Sites in many ways.  You could have asked them that
question I answered above, instead of risk ruining their reputation
by mentioning their name in this public echo in what seems to be
part of your learning curve about normal business practices.  What
business do you think will make any effort to sell your product when
so few have sold previously and you act against them?  How much is
their or your reputation worth?  From what you've said they are not
exactly getting rich off of you.  If they hear of this they will
probably dump you.
 KF> P.S. If anybody else out there has ever dealt with Albert's
 KF> Ambry, please contact me.
I have not had any experience with Albert's Ambry nor even heard of
them.
But after 3 years of being a US Reg-Site for a couple of different
ShareWare and offering to accept 4 different credit cards, I know
from experience that there is IMO an extremely high percentage of
chargebacks.  Not usually 75% as in your case, but easily 10-25% on
the average with a much higher percentage around Christmas time. It
seems to come and go in spurts that last a few months.  The vast
majority of all stolen credit cards were used by their real owner
on AOL, before the thief tried to use it with me.  Some credit card
service providers such as Novis, Discover Card, have refused to do
anything to catch stolen credit cards and will give approval to a
card that they already know was stolen and have a policy that the
merchant is always wrong no matter how much proof the merchant
provides that the sale was made by the valid credit card owner.
Thus it is totally useless to attempt to refute a chargeback.  I
once spent the better part of a day organizing documents and logs
and sending dozens of Fax to Novis in a futile attempt to refute a
chargeback when it was obvious that it was not stolen and the real
credit card holder was wise to the fact that he could rip off any
merchant by simply denying he made the purchase.  I lost my money,
I lost my time and I lost paying LD phone bill to send Faxes and
verify real names, addresses and phone numbers.  Most merchants
will not go to that much effort.  In fact most merchants won't even
bother to verify the purchaser beyond the minimum required
approval.
The best way to avoid chargebacks is by the merchant going to great
lengths to verify the name address and phone number of the
purchaser (TeleCo "Caller ID" helps) compared to the credit card
holder.  That can be very time consuming and expensive making LD
phone calls to obtain verification that is not required by the
credit card processing company.  I use a 7-CD set by DeLorme "Phone
Search USA" and I paid to get updates of those every year.  I also
used DeLorme's "Street Atlas USA" to help verify real addresses.  I
always called the credit card provider and often the issuing bank
to verify the name and address of the real credit card owner.
Sometimes that was a free call but often it was not free and I
would get put on Hold for a long time while they checked their data
base and ran up my phone bill.  If it did not all match, then I
would make even more LD calls to be sure the customer did not make
a typo, before I would contact the security department of the
issuing credit card to investigate the stolen credit card.  I figure
my average expense was about $15 per $50 sales and 30 minutes per
sale, just to do the verifying to avoid chargebacks.  That does not
include the normal required processing fees and approval.
Although I may have only gotten hit by 10-25% chargebacks that
somehow slipped through all of my verification efforts, the ratio
of attempted frauds by credit card customers was much closer to
90%.  That meant for every 10 potential registrations only 1 was
valid while I had to spend time and money to avoid chargebacks from
the other 9.  And worse yet many chargebacks were not within a few
months of the sale, some were 9 months later.  Often that meant I
had already paid the author and even more paper work was required
to straighten out the mess.
Add to all that the normal percentage fees per sale and in my case
lease expenses for the credit card processing terminal and printer,
and even during times of a high number of sales, it cost me about
$20 per sale to handle credit cards more than it does US Postal
Money Orders.  During times of few sales I was literally taking
money out of my pocket to pay the credit card processing company.
Hence as of the 1st of this year I stopped accepting credit cards.
It gets worse, for several years my local county politicians have
been planning to change the local laws to require a business license
fee of several hundred dollars and take 5-10% of gross sales on top
of that.  I just received a letter that they not only have passed
those laws but added to that fees for zoning and administration
expenses.  All that is in addition to State retail sales tax and
State and Federal income tax.  Such substantial taxes and fees make
it especially hard for small businesses.
At this point I have to re-evaluate several issues.  Are the authors
of the ShareWare I have been acting as a Reg-Site for, going to
produce new versions or new programs to generate new sales enough to
cover operating expenses?  What retail price will the market bear?
If both of those numbers are low, then it quickly gets to a point of
no financial returns.
From the author's perspective there may be alternatives.  Look for a
Reg-Site that handles hundreds of different ShareWare registrations,
such as BMT-Micro, Thomas Bradford.  Although he may be catering
toward OS/2 software.  Perhaps there is some other very large US
Reg-Site for DOS/Win95 prgms.  Another alternative is to setup an
electronic Reg-Site that handles almost all foreign credit cards.
Steve Stacher can probably tell you more about processing US credit
cards from the UK.
Another thing a US based Reg-Site has to deal with in paying a
foreign author is the foreign currency exchange rates and bank
service charges in addition to the amount of money owed the author.
Those fees vary widely depending on the Reg-Sites local bank and
method of payment.  A check in foreign currency may cost as much as
$50 regardless of the amount of the check.  A Bank Wire Transfer may
only be $25 in addition to the amount in British Pounds Sterling.
And using an international currency exchange company not directly
associated with the local back may provide considerable savings in
the foreign exchange rates.  In some cases that might involve 3
countries, such as the USA, Canada (where the exchange service is
located) and the UK.  In any event it is much more economical for me
to pay a large amount, rather than pay a smaller amount more often,
since the service fees are not based on the amount exchanged.
Another thing the author should be concerned about is how much
effort is the Reg-Site putting into marketing and support.  That may
involve such things as establishing special file echoes in the IFDC.
Or providing free technical support and having the expertise and
attitude to provide accurate quick help to customers and potential
customers.  Or writing additional T/S documentation and/or prgms for
free to support the author's prgm.  How well is the Web site laid
out and updated.  Customer feedback.
Perhaps this does not effect you, but it does me as a Reg-Site, I
busted my butt establishing effective distribution chains and
providing free T/S only to find that I was in competition with the
author selling to my customers through his Ele-Reg-Site easily
accessed within the software, and a Reg-Site in Canada accepting US
dollars and selling for much less than I can, but who never
provides any T/S.  In fact he would refer his customers to me to
get T/S.  More than once I had customers "demand" a refund from me,
when they had not paid me, but paid my competition for the prgm I
offered.  Sometimes they wanted all their money back, sometimes
they wanted a refund for the difference they paid when they found
out the additional foreign exchange and service charges for using
the author's Ele-Reg-Site.  I had another author insist I could
only sell a commercial version of his software that included an out
of date printed manual for $49.95, while he sold that software
without the printed manual, which was included in a text file in
the software, for $30.  Basically too much competition from authors
and other Reg-Sites can cause rather low sales.
I know of 1 author who had a tendency to "burn his bridges".  By
that I mean he would say 1 thing and do another or go back on his
word or contracts with his Reg-Sites.  For instance he told a
Reg-Site that he would release a bug fix version that included info
about registering at the new Reg-Site within a month, but 6 months
later that Reg-Site was still unheard of beyond their own efforts,
and the former Reg-Site in the same country was still accepting
registrations.  Another time he suddenly raised his price to the
Reg-Site when a large contract was about to be signed based on the
word of the author and previous written Reg-Site prices.  He had
already had a very high turn-over rate of Reg-Sites in that country
and some of the former Reg-Sites said they would never do business
with that author again, although they were very successful with
other authors.
Although you might suspect the Reg-Site of fraud, they can provide
proof as I mentioned above.  And in any event I suggest you not
accuse them of any wrong doing unless you are very sure.  From my
discussions with Reg-Sites in other countries, I am led to accept
that the US has what must be close to the highest rate of frauds and
stolen credit cards.
In summary, I am not trying to stick up for Albert's Ambry, which I
never heard of, but I can certainly understand potential problems
such as chargebacks and low sales they may have.  My suggestion to
you is to try to find a super sized Reg-Site.  And above all deal
with all of your Reg-Sites honestly and fairly.
     Thanks and Good Luck,        Andy Roberts
                                  andy@shentel.net
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