Guest Posted June 19, 2003 Posted June 19, 2003 I just had a very interesting meeting with my bank manager with regards to setting up a merchand ID - this is so I can interface a store more directly with the bank, as opposed to using a service like WorldPay. The % rate charged and the period that funds will be held, depends on the results of a risk assessment on the business as a whole. One area in which the bank had quite a strong opinion on, was the selling of Gift Vouchers, online. They view this as extremely risky - in terms of fraud, and also liability in the event that the company were to fail. I see this as a real shame - gift vouchers are a great 'viral marketing' tool - the sender is basically introducing new customers to the site for you - but in the face of advice from the bank - I am electing not to feature them - for the time being. I wonder, how many people feature Gift Vouchers on their sites - are they successful - are they worth the risk - have they had similar feedback from banks etc ...? BrianD
Guest Posted June 20, 2003 Posted June 20, 2003 Brian, Quite some time ago another user contacted a merchant account provider and had a similar problem only they wanted to have the gift vouchers have an expiration date. (Which we found out was illegal in most places) I am curious as to why they find the GV so "risky"?
Freedom Fighter Posted June 20, 2003 Posted June 20, 2003 I just had a very interesting meeting with my bank manager with regards to setting up a merchand ID - this is so I can interface a store more directly with the bank, as opposed to using a service like WorldPay. The % rate charged and the period that funds will be held, depends on the results of a risk assessment on the business as a whole. One area in which the bank had quite a strong opinion on, was the selling of Gift Vouchers, online. They view this as extremely risky - in terms of fraud, and also liability in the event that the company were to fail. I see this as a real shame - gift vouchers are a great 'viral marketing' tool - the sender is basically introducing new customers to the site for you - but in the face of advice from the bank - I am electing not to feature them - for the time being. I wonder, how many people feature Gift Vouchers on their sites - are they successful - are they worth the risk - have they had similar feedback from banks etc ...? BrianD We offer gift vouchers on our store.. We haven't sold many.. Extreme Alterations
Guest Posted June 20, 2003 Posted June 20, 2003 There seems to be two main areas of risk that the bank is considering - the first obviously being fraud - ie a customer uses a stolen credit card to purchase the certificate, then uses the certificate to purchase goods - six months later there is a chargeback on the credit card purchase - the second area, was more directly related to the performance of the company - and as you mentioned, expiration dates. The bank was not comfortable with a long (six months or more) expiration date. The problem seems to be that if the company sells $1,000 of gift vouchers, then uses that income for the business, and the business goes on to fail, the customers who bought the gift vouchers have a claim against the company. To be honest, I don't really see a difference between a gift voucher and any other product - although I wonder if there may be an issue with the credit card companies themselves - currently, if goods aren't delivered , a customer can claim a refund from their credit card company - perhaps this doesn't apply to gift vouchers? BrianD
Guest Posted June 20, 2003 Posted June 20, 2003 We offer gift vouchers on our store.. We haven't sold many.. The store I am currently building is gift/home interiors orientated - gift vouchers would have been, I think, a great addition to it - I've told the bank that for now, we'll leave them off and 'review the situation' in six months time - don't want to let the bank have the final say of course! BrianD
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