Last week at ASW I noticed that several publishers, merchants, and networks in my vertical were distraught over having their merchant accounts knocked out by the new arbitrary Visa/Mastercard policies. For those of you who aren't familiar with what's going on in the health and beauty vertical right now, allow me to enlighten you. This vertical is extremely luctrative yet attracts several neophytes that launch sites without paying heed to FTC regulations, i.e. the five flag negative option rules. So people have been launching sites selling acai and making a killing, only to get killed via chargebacks, FTC suits, and now automatic shutdowns by Visa/Mastercard. There is a way to do this thing right, make a killing, and stay in it for the long haul.
There are primarily 2 reasons why merchants were getting their rights to process pulled. First, they were using multiple MIDS to process a volume that they couldn't handle with their credit. Some of these merchants were younger players in the industry that didn't have a high credit. The second reason was unscrupulous billing practices. Look, not as many customers will convert if you place the billing terms clearly above the process order button, no doubt. Nevertheless, many will still convert with the terms placed correctly and strategically. Plus, if you have a good product to promote that calls for legitimate continuity then you're in there.
I don't have the continuity/rebill option on my sites, just a 14 day trial that leads into a 1 time membership fee. For one of my offers it makes sense because it is an fda approved OTC drug that must be taken for the rest of your life. So my customers legitimately need to take it for the rest of their life for it to work, it is not a cure all drug. Once the customer signs up the way to stay compliant is to make them pay for shipping on future orders for "free refills." So they pay 119 for the membership and then pay 12 bucks for free refills. This adds value to the customer and we still make profit on the shipping, although not as much as a continuity offer. But at the end of the day we are still in the game, i can pay my people, live in a mansion, and sleep next to my beautiful woman without one eye open.
If you guys need the new Visa/Mastercard regulation sheet that I received from another compliant company that Venable LLP reviewed let me know and I'll send it your way. Do this thing right and you'll make it big and be around for the long haul.
There are primarily 2 reasons why merchants were getting their rights to process pulled. First, they were using multiple MIDS to process a volume that they couldn't handle with their credit. Some of these merchants were younger players in the industry that didn't have a high credit. The second reason was unscrupulous billing practices. Look, not as many customers will convert if you place the billing terms clearly above the process order button, no doubt. Nevertheless, many will still convert with the terms placed correctly and strategically. Plus, if you have a good product to promote that calls for legitimate continuity then you're in there.
I don't have the continuity/rebill option on my sites, just a 14 day trial that leads into a 1 time membership fee. For one of my offers it makes sense because it is an fda approved OTC drug that must be taken for the rest of your life. So my customers legitimately need to take it for the rest of their life for it to work, it is not a cure all drug. Once the customer signs up the way to stay compliant is to make them pay for shipping on future orders for "free refills." So they pay 119 for the membership and then pay 12 bucks for free refills. This adds value to the customer and we still make profit on the shipping, although not as much as a continuity offer. But at the end of the day we are still in the game, i can pay my people, live in a mansion, and sleep next to my beautiful woman without one eye open.
If you guys need the new Visa/Mastercard regulation sheet that I received from another compliant company that Venable LLP reviewed let me know and I'll send it your way. Do this thing right and you'll make it big and be around for the long haul.
