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That's not the way it works. If you have a merchant account, and someone issues a chargeback, you won't ever see the money again, unless you can somehow prove

That's not the way it works. If you have a merchant account, and someone issues a chargeback, you won't ever see the money again, unless you can somehow prove the charge was legit. It's not like you can pump and dump a merchant account for $1 million and then skate on to the next merchant account. The way it really works is that merchant accounts don't get money for 90 days after the charge until it's really cleared.

smokinn 15y ago
Chargebacks can still come along up to 6 months after the charge date, not just 90 days. And yes, you aren't going to see any of the money from the chargebacks but that doesn't matter. A very small percentage of people know about or bother to charge back. You'll lose maybe 5-10% at most (a higher cb rate would surprise me but then again I've never run a scam op so it may be common) and you will get a lot of faxes but you can just ignore them, take the 90% out and let the bank shut down your account eventually. By the time the bank gets around to actually shutting down the account most of the money will be gone. I imagine they'll freeze the money at some point but if you're running a large operation you'll know at what point that will happen and will have stopped using that merchant account before then and have taken most of the money out. EDIT: I forgot another reason why banks don't like chargebacks: banks themselves have to stay below a certain aggregate chargeback threshold across all their clients' accounts or they get grief from the credit card companies and have to pay penalties/fines. If they're a small bank there's even the possibility that the credit card companies will drop you entirely.