Adult Site Broker Talk Episode 29 with Suresh Dakshina

0 (8s):
This is Bruce Friedman of Adult Site Broker and welcome to Adult Site Broker Talk, where every week we interview one of the movers and shakers of the adult industry, and we discuss what's going on in our business. Plus we give you a tip on buying and selling websites. This week, we'll be talking to Suresh Danshina, CEO of Chargeback Gurus.

1 (34s):
Adult Site Broker is proud to announce ASB Cash, the first affiliate program for an adult website brokerage. With ASB Cash you'll have the chance to earn as much as 20% of our broker commission referring sellers and buyers to us at Adult Site Broker. Check our website at asbcash.com for more details. First of all, today let's cover some of the news going on in our industry. Today is day two of the three-day virtual YNotSummit today's featured sessions include two times for speed networking, finding help for your coding and its challenges by Fillip at Quantox. A panel on bankable tactics for affiliates, a state of the industry panel, maximizing revenue with your own adult affiliate program, building a culture of diversity and inclusion and adult how to get leads from Facebook by social media expert, Jason Hunt, and a live movie screening and interview with star Anna Fox and director Ricky Greenwood.

1 (1m 42s):
Yesterday, I was honored to do a session on buying and selling websites. You can view the session in the archives area of the why not summit website, which is located@whynotsummit.com, where the summit is being held. The summit concludes tomorrow. The free speech coalition has updated its response to the new COVID-19 safe at home. Public health orders issued for LA County that recently went into effect. This is from the FSC statement. The new restrictions do not directly address adult film, production and film permits are still being issued. However, adult film producers should use caution when shooting and review guidelines issued by the FSC and other health experts to help mitigate the risk of transmission on adult sets.

1 (2m 30s):
The surgeon cases is only expected to intensify in the coming weeks and should the spread not slow, more dramatic restrictions could be issued. Please continue to be vigilant about following the COVID-19 production, health and safety guidelines screen everyone for COVID-19 symptoms before allowing them on set, maintain six feet of distance among everyone on set. And that should be interesting to pull off wear a face covering and other appropriate personal protection equipment at all times, have all people on set, tested for COVID-19 as close as possible to the production date and report any potential onset COVID-19 exposures to the FSC.

1 (3m 16s):
As soon as possible. Jackie and Michelle group has announced the implementation of my 18 pass protection across its suite of adult pay sites. Following months of internal development, my 18 pass is currently being implemented on the entire group's network and will be available to every operator in the industry who would like to benefit from a handy and reliable protection system. A rep explained the system will be able to check as soon as users arrive on a site that has adult content. If the user is old enough through credit card based verification, the rep noted plans are in the works to add ID based verification to the process.

1 (4m 2s):
My 18 pass is based on open ID protocol, which allows users to authenticate themselves on several websites without having to remember log-ins for each one of them, by using a unique user ID every time by never recording or transferring any personal data, it guarantees a total protection for the users said the rep, thanks to this technology, the Jackie and Michelle group benefits from an additional tool in order to ensure that no miner can easily access sensitive content, visit my 18 pass.com for additional information about the service. Now let's feature our property of the week.

1 (4m 43s):
That's for sale at adult site broker, we're proud to offer for sale, a novelty manufacturer and website with pop culture, theme, silicone products, their products are niche yet relevant to mainstream audiences and are incredibly sharable as evidenced by the hundreds of articles written about the brand on outlets, such as Playboy, vice Buzzfeed, Mashable, penthouse, lad, Bible, Cosmo, Nerdist refinery, 29, pop sugar, and more. They also have a diehard community of more than 40,000 social media followers. In addition to their email list of over 10,000, all traffic to the website is self-created no ads have been purchased.

1 (5m 29s):
The traffic has all organic social and direct. This company can and has been run by two people part-time and it could be scaled up or merged with a much larger company with very minimal effort. The company has incredible potential for expansion, but it also has a solid four years of history of year over year growth and a huge community of dedicated fans. All manufacturing equipment is provided with everything needed

2 (5m 58s):
To continue running the business, including all product molds and related materials also included as about $50,000 worth of product stock. You get all this for only $675,000. Now time for this week's interview, I guess today on adult side, broker talk is Suresh the president of chargeback gurus, Suresh, thanks for being with us today and adult site broker talk,

3 (6m 26s):
Thank you, Bruce, for having me on your podcast. Looking forward to answering your questions today,

2 (6m 31s):
Need to a Suresh is a certified e-commerce fraud prevention specialist payments, professional and charge back management professional, who knows firsthand the challenges business owners face, especially when it comes to chargebacks and fraud. It works closely with card networks, such as visa and American express on chargeback process optimization and policies. Chargeback gurus has been in charge back management over 16 years. They create custom chargeback prevention and management solutions. They work with many fortune 500 companies, as well as some companies and adult and have a staff of over 200 charge back and fraud analysts.

2 (7m 11s):
They identify the root causes of chargebacks eliminate future fraud and recover lost revenue. Now, Suresh, we were just talking casually and you were talking about how you came to the country and, and all that. So why don't you give us that story?

3 (7m 32s):
Absolutely. I came to this country in 2000 to do my master's at the university of Southern California. And in 2003, me and my partner started a business, helping businesses actually create revenues who are selling products online. And throughout the process, actually we were helping them, you know, identify that payment pain points, identify how they are losing money. And we were actually helping them fighting their chargebacks, helping them actually also determine how their fees are being built by the banking networks. And we used to help them optimize it. And slowly we graduated into having a revenue call center, where we were taking calls and identifying the areas where we can bring in more revenue for e-commerce merchants.

3 (8m 22s):
And chargebacks was off course the biggest pain point for a lot of our merchants. They didn't know how to solve the problem. And they were approaching us to solve the pain point. And at that time there was no documentation available. You know, there was no information available online and we took the painful process of solving the problem. And we've had a very successful in recovering the money that merchants were losing beautiful fraud and disputes. And because we were so good at it, a merchant said, Hey, why don't you start this as their own business, rather than you providing a customer service support because are a dime a dozen customer service centers. We thought, you know, what if the market is there, why not? And we found that actually it was a multimillion dollar problem at the time, and now it has become a multi-billion dollar problem.

3 (9m 8s):
It's constantly growing. So in 2014, we started charged by groups and started offering chargeback prevention and recovery solution as a unique product. And we have been constantly growing and just in the pandemic, we grew 250% and steadily growing. We are very happy that we have the opportunity to assist a lot of merchants who are bleeding money due to chargebacks and fraud.

2 (9m 32s):
And you did this just a few years out of college.

3 (9m 35s):
No, actually I graduated in 2003, but I was actually ha you know, me and my partner started our own venture. We've added the payments industry at the time. And in 2014, we started charged by gurus, but I was being an entrepreneur since 2003.

2 (9m 51s):
Got it, got it. Okay. Now you've been in the industry now for over a decade. Do you have any crazy chargeback stories you can share with me?

3 (10m 0s):
Absolutely. One of the fascinating stories that lot of you know, people find it so interesting is we had a diamond merchant and he was actually selling a $30,000 diamond online. The customer actually purchased the diamond and he returned the diamond and he called the bank and said, Hey, I written the diamond. The merchant is refusing to give the money. So the bank thought the merchant is actually trying to scam the customer, but the merchant was not, the customer was a scammer. He here because he returned it with a fake diamond. And

2 (10m 33s):
So when you said diamond that I saw that coming a mile away, by the way.

3 (10m 38s):
Yep. It was a fake diamond Ireton, but thankfully he reached out to chargeback Bruce at the right time. So we were able to actually prepare all the right evidence and then convince a bank that actually the customer is at fault here. And he returned a fake diamond. And we also had a certificate from one of the vendors who rated that this is a fake diamond. And thankfully we were able to record the money. And the merchant said, if they would have lost that money, he would have filed bankruptcy because he said he cannot roll $30,000 at a loss when he's just starting his business.

2 (11m 12s):
Oh, wow. Did the guy go to jail? Do you know?

3 (11m 15s):
No. Unfortunately the laws are so for online, online scam, I mean, you can actually go to a retail store. You can actually, you know, if you happen to steal, you know, a small item, you can go to jail, but you can actually steal multi-billion dollars online. And because you are in a virtual location, it's very tough to prove the case and send you to jail. Unfortunately, the loss of so weak when it comes to online purchases.

2 (11m 41s):
Well, that has to change. Yeah.

3 (11m 44s):
Oh, organized network. As you know, it's very challenging to trace the real person.

2 (11m 50s):
Oh, absolutely. Absolutely. Of course. If the laws did change, that would be bad for your business. Wouldn't it. Now. Now why should merchants fight chargebacks in the first place? Great question.

3 (12m 4s):
So I give a classic example. If somebody is actually coming to your house and they're trying to actually get something out of you, you know, that is, that is, you know, legally yours, what will you do? You will try to fight it, right? You will actually, you will call the police or you will actually try to prevent the guy from actually taking the money out of you, right? Or 80, any valuable that you have in your house, you are going to try to protect yourself. It's the same thing happens, you know, on the online space, when e-commerce businesses asked me, why should I even consider fighting a chargeback one? You are sending a message to the fraudster. That if you try to actually, you know, defraud me, I'm going to fight it and I'm going to get the money back so that it prevents him from doing it again.

3 (12m 51s):
And the second thing is actually, the cost of running a business online is increasing every day, right? There is more and more competition. Adult space is super crowded. Your customer acquisition costs is constantly increasing and merchants, especially are looking for creative ways to add, increase their profitability. And one way for you to do that is by you fighting the chargebacks so that you can actually prevent the revenue loss from happening. Chances are when you have a competitor, they might not fight the chargeback, but guess what? If you fight the charge back, and if you're able to recover the money, you can use that money to actually acquire more businesses are more customers.

3 (13m 33s):
If you let it go, chances are this frosted is going to keep coming back over and over. Try to defraud it because they know that you're not going to do anything about it. One, you can prevent the fraudster from committing the same mistake over and over. Second thing is you have an opportunity to get your money back. You're going to lose the revenue there because you already paid for the customer acquisition cost. You have paid for the video streaming that incurs a cost when you provide a streaming service to a customer. So this is a great opportunity for you to recoup your losses.

2 (14m 2s):
That's right. And you've also paid, you also pay the chargeback fees as well.

3 (14m 7s):
Absolutely. You have paid your charge back fee. So you might as well fight it. And you know what? I covered your money and send a message to the fraudster.

2 (14m 15s):
Absolutely. Now what are some of the best practices for merchants with subscription or streaming sites?

3 (14m 22s):
So there are two components, right? One is actually the prevention component. I always tell merchants, if you can prevent the charge back, that's the best thing you can do. So we actually created a solution where we partnered with a lot of banks. And unfortunately in the payments industry, you cannot exceed a certain chargeback threshold. You know, you have to be between a less than 1% chargeback. If you charge back, then they shut your business down. And with that,

2 (14m 49s):
That keeps going down by the way that it

3 (14m 52s):
Exactly, you know, it keeps going down every year because the card networks say, Hey, now that there are so many fraud prevention tools available, we expect you to keep your chargeback ratio less than 1% previously. It was up to 1%. Now it's actually 0.9%. So we worked out with a lot of banks where they notify us prior to a customer filing a dispute. And what we can do is we can issue a refund to these customers so that we can eliminate a potential dispute from happening. And this is a great service for a lot of other businesses who are exceeding that 1% threshold in order to save God their business. They say, you know what? I don't want to actually go through a chargeback for a $20 or $30 subscription.

3 (15m 36s):
They will just say, Gordon, issue them a refund. And we will issue the refund and we'll prevent them from filing a dispute in the first place. That's the first solution. That lot of our actually merchants in the adult industry utilize. The second solution that I call it as the golden thing is fighting the charge. Back when I know that the merchant has provided the service, we have all the right evidence to prove that we have delivered the service. And we have a digital proof that the guy actually downloaded the video audience, watch the video. Then we will fight those bogus chargebacks and we can help them get the money back. So we offered it a company solution. We also offer a prevention solution that is much needed for the merchants in the adult space.

2 (16m 20s):
Now you told me what it's done for your business, but how has COVID-19 impacted the fraud landscape?

3 (16m 28s):
Oh, great question. And as you all know, we have seen a spike in the transaction, especially in the adult space. Y lot of people are at home. They are not at the office. They are at the Liberty of watching porn when they are actually sitting in their home. Right? So the amount of transactions have significantly increased. And so does the fraud. You know, people think, you know what? I can actually pay for the subscription, but I can get my money back by calling the bank. Unfortunately, the banks don't do a great job in asking follow-up questions. I can call a bank and say, I never authorized it. This is a fraud. And they won't even verify or cross check anything with me and they will simply accept the fraud.

3 (17m 10s):
So we have also seen a spike in fraud. Why? Because unemployment rates were extremely high during the month of March, till June. And lot of people who are thinking of, you know, scrambling for money, they thought, okay, that can get the money. Okay. I cannot make more money. Let me see where else I can do it. So they thought, you know, calling the bank and telling them that I never opted for this subscription can help them get the extra money. Some of them also filed a dispute for six months up to eight months of transactions. And the banks never asked them a question. Hey, what were they doing for eight months? Oh, I never checked my credit card bill just now I'm looking at it eight months, I've been built for this.

3 (17m 51s):
And now I notice that this is a fraud. So we have seen customers filing a dispute up to eight months prior. So we have seen a big spike and fraud charge backs, especially during the COVID season.

2 (18m 3s):
Well, and let's face it. It's always been the case for the banks. Don't seem to care if it's a fraud coming from porn.

3 (18m 12s):
Absolutely. But what we have done is actually we have fought with the banks. We have fought with the credit card networks and we have convinced them that, you know what? I understand that it could be mistakes on both ends. There could be a bad merchant, that it could also be a bad customer, but we have convinced them to accept certain evidence as valid evidence that can prove the innocence of the merchants. And especially in the adult industry, it can be tricky, right? Because everything is online. There is no physical product being shipped. So now the partner networks and the banks are willing to accept digital proof as a valid evidence. So V on, in a position to use the evidence that adult merchants normally have as a digital footprint.

3 (18m 54s):
And we collect those evidence, we put together our own package, and then we prove the innocence so that we can actually convince the banks to reverse the transaction. What we have also seen in the past is when you are proving your innocence, right? When you are, for example, chase bank, when chase sees that there is a merchant who is actually disputing the transactions, but they are disputing the chargebacks on they're proving their innocence. They are more likely to approve your recurring transactions for other customers. Because now they know you are a legitimate business, then merchants actually constantly write off chargebacks as a cost of doing business. What is the message? You are sending these banks.

3 (19m 34s):
The banks are going to think, Oh, this must be a notorious merchant. They must be doing something bad. And that's why they are never disputing a chargeback,

2 (19m 42s):
Right? So it actually, it acts on its own. So not having charged backpack. Chargebacks actually helps your throughput

3 (19m 48s):
Absolutely. By you quite charged, you can prove you're in a sense, and that can also help you with your subscription billing as well. Because banks are going to look at who you are, you know, and they're going to ask, what are you hiding behind the carpet that you're not telling me anything about your business? Your customers are filing a dispute and you're not doing anything about it. So it will have an impact on your recurring billing. Some issuers can blacklist you if they blackness and you will be able to accept credit cards from anybody. Yeah. And you're presumed guilty. Absolutely.

2 (20m 21s):
Yeah. You don't want to get on one of those black was I, I had a client who got blacklisted and lost this processing and he came to me and wanted to sell his website. And yeah. And so he had no processing. His sales went down to zero from a very high level. It was a bogus fraud claim. It wasn't about chargebacks, but as he still got blacklisted and it took him about a month to get off the black list. So he could acquire processing again and not from the bank he was with. They wouldn't take it. So that's just a, it's a mess. You get on one of those blacklists, good luck, your business, your business just lost a huge percentage of its worth.

3 (21m 7s):
When the merchant is approaching their chargeback threshold, sometimes banks will tell them, Hey, you need to give me a plan on how how's it you're planning and reducing the risk right now. What triggered to this risk? Why was the chargeback so high? So we work with actually merchants in the adult space when they are exceeding the chargeback ratios or when they are getting closer, we will put together a plan that they can actually submit to their payment processor as to the salt. We can help them lower the chargebacks. And we can also actually closely monitor them to ensure they are best practices to actually prevent some of these chargebacks. So, you know, we work with their banks and helping them continue their business. Because the last thing you want to do is receive a letter from your processor, stating that they can no longer accept, you know, your did it.

3 (21m 54s):
They can no longer accept you as a merchant. That's can be very disastrous for your business.

2 (21m 59s):
No, that's a, that's not a good, not a good letter to have a wire besides the, what we've just talked about. Why do you think charge chargebacks, chargebacks are such a big problem in adult?

3 (22m 11s):
Well, as you know, you know, mostly I would say men are the ones who are subscribing for this. And when their partner looks at the credit card statement, and then the descriptor vast, we call it as it's not identifiable. And they ask this person, Hey, what happened to this? Most of them? And I can say, we'll say, Oh, I don't even know. I don't know what this is about. And then they don't want to admit that they have subscribed for this. So their immediate thing is the partner will say, okay, call the bank and file a dispute. And they will do it. You know, you are in a space where people don't want to openly admit that they are the ones opting for the subscription. As a result, you're going to see a lot of chargebacks.

3 (22m 53s):
We call the adult industry, the high-risk industry, because a lot of people are going to be filing for chargebacks. And there are ways you can prevent them. And there are ways you can recover from it. And that's where companies are. You know, a lot of companies hire us to do the work for them. Because at the end of the day, you have a business to run, right? You are experts at running your adult business. You're not experts at controlling fraud and chargebacks. That's where we come in and we are going to help you, you know, do your job better so that you are protected.

2 (23m 23s):
The best thing they could do. I would think even as if they're a new website or if they don't have a charge, backs, problem is bring you on and have you come up with a plan for them, right.

3 (23m 33s):
You're just chilling, right? For example, you buy a car, you get insurance, right. From the first day, you don't say, Oh, let me actually drive it for three months and then I'll get an insurance. But you know, that's, that's not going to help. So you want to have the insurance right from the beginning, same applies here as well. You want to have a chargeback protection on the chargeback company, right? From the ghetto so that you are protected because what fraudsters are going to do is they're going to actually go after the merchant, where are the weak spots, right? Because they are an easy target. They can actually attack you immediately. They know the big ones are going to have the team and they're going to have all the fraud prevention tools in place that can eliminate the fraud. But they're going to go to the smaller and the midsize merchants.

3 (24m 14s):
They know that they are the weak spots. So you don't want to give them that opportunity.

2 (24m 18s):
Yeah. They're going to test you. They're going to test you for sure. Yeah. How would someone decide on whether or not to hire a chargeback management company like yours?

3 (24m 30s):
Great question. So when it comes to prevention, right? Unless, and until you have a dedicated person who can provide you the advice and the strategies, I know the tools, it can be challenging for you to do the prevention by yourself. And if you have an educated person to do that, then it's going to be expensive because you need to look at the cost versus benefit. You know, if you have, for example, $10,000 in chargeback losses, I'm just throwing in a number in a month. You don't want to pay somebody $7,000 to manage your chargebacks. Because having a full-time person who's experienced in this industry is going to be expensive. And you might be paying anywhere between 7,000 to 10,000.

3 (25m 12s):
At the time you made that sort of just face the fraud rather than hiring the person. So that's when companies decide to hire companies like us, because they don't have to pay the premium, but they get the best advice and the strategies, because we don't have to spend a lot of time for you to pay that full time price. That's where they see the benefit. And as far as actually, the recovery is concerned. That is an art and a science, right? Every bank reacts differently. When you send a dispute package to them, proving your innocence. So you can have your in-house team, but under what costs, you have to train them constantly. And you cannot get a certified person because they are very expensive. You hire a lot of blue collar workers, and there is a high turnover for these kinds of jobs.

3 (25m 57s):
So at one end, you wanted to run your business. And if you are going to be managing the chargebacks, then where are you going to have the time to run your business? And I always use a classic example. If you have a plumbing leak, go and hire a plumber as a consultant to come and fix it, don't make them a full-time employee.

2 (26m 16s):
That's right.

3 (26m 18s):
Plumbers, full-time to fix the plumbing leak,

2 (26m 21s):
Right? Sometimes

3 (26m 24s):
It's better to outsource because at the end of the day, your time is going to be well spent and growing your business and not to actually deal with the fraction of the problem, which is the chargebacks and fraud and let the experts do it. Because at the end of the day, we are going to actually help you prevent more. We have the tools and the strategies, and we are also going to actually be less expensive than your in-house staff.

2 (26m 47s):
Now, do you think anyone can eliminate a hundred percent of their chargebacks?

3 (26m 52s):
Absolutely not. The industry that we are in. We cannot eliminate a hundred percent, but we can minimize at least 50% of the chargebacks. If you have the right tools and the rest of the chargebacks, which are happening, we will help you recover the money by fighting them. So we will prevent what we can and whatever we cannot prevent, we will fight it and we will get the money for you. So at the end of the day, we are going to actually get you the maximum recovery for chargebacks and fraud.

2 (27m 21s):
Okay. And what are some simple things merchants can do to protect their business against charge backs?

3 (27m 28s):
So in the adult industry, I always actually tell the merchants that when you are sending an email confirmation to the merchant, that these are the terms of the sale, this is when you're going to be built for recurring billing, save a copy of those order confirmation emails, because that is going to be the golden evidence. You need to win them to recover the chargebacks. And the second thing is use of fraud prevention tool. You know, if you are accepting massive amount of transactions, I would say, if you are accepting more than 5,000 transactions a month, you definitely need a fraud prevention tool that can eliminate some of the fraudsters from using a stolen credit card. And the third one is the simple thing is in your payment gateway, use the AVS and the CVV filters that can actually help you eliminate some of the stolen credit cards from being used.

3 (28m 14s):
So these three strategies can give you some kind of actually recovery and prevention, you know, on your transactions.

2 (28m 22s):
Well, don't the banks all pretty much require 3d verifications. Now,

3 (28m 27s):
Unfortunately they don't enforce it really? Yeah, they don't enforce it. Some, you know, because in the adult industry, we considered the high-risk merchant space, right? When you work with a payment processor, those in the hightest space, they don't enforce these policies that you need to accept. AVS. You need to have AMIA's filter and CVV filter. They let the merchants decide. And whenever there is a new player in the adult space, they don't know all these things. You know, they are going to simply accept the transactions, thinking they are secure, but they end up in a fraud and leading to revenue loss.

2 (29m 2s):
Okay. Excuse me, excuse me for being ignorant here. But wouldn't logic say that risk merchants should be more likely to be required to do this stuff.

3 (29m 14s):
Great question. So a lot of merchants think if I have to enforce CVV and AVS, the address verification, then I might have to decline some customers. So they don't want to take that risk because they think my cost of customer acquisition is going to go high. So I'm going to go ahead and actually, you know, disable those filters so that I can accept everybody until it's too late for them. So, you know, you gotta be careful with that when you're starting your business, or even if you're an established merchants, you need to look at your chargeback ratios. If your chargeback issues are controllable, I can tell you with guarantee that at least you need to have one, one, or, you know, I would recommend both.

3 (29m 55s):
But if you think you don't want to activate both the filters, at least have one filter on. If you disabled, both the filters, that's actually a disaster waiting to happen.

2 (30m 4s):
Oh yeah, they can. They can pro bots can probably get you at that point.

3 (30m 9s):
Absolutely. And if you're paying, you know, affiliates, you know, in the auto space, we have seen a lot of affiliates generating sale. These affiliates can also create bogus transactions.

2 (30m 22s):
There's a lot of fraud that you help with that as well.

3 (30m 26s):
Absolutely. We help them track their fraud. So we had actually one of the merchants in the hightest space, they hired a lot of affiliates and there was one particular affiliate network, which was creating more than 4% chargebacks. And we actually won them the much and didn't want to let them go. I told them, you have, you have an option here either. You can actually accept 4% chargeback, but your business will be shut down by next month. What do you want to do? Finally, they let go of the affiliates. So we also help them track affiliate fraud.

2 (31m 1s):
Good. That's that's really good. You know, when you talk about the security of credit card transactions, it never ceases to amaze me how you feel walking into a store and they don't require a signature, a good deal of the time now. And I, you know, they, they talk so much about security and identity theft and this and that, but I don't think the card companies are really helping themselves.

3 (31m 26s):
Well, right now, actually you might have seen in the credit cards, we have a chip integrated in the card, right? So if you will have, you're running a retail store and somebody walks to your store and you ask them to insert the card rather than swiping, then the merchant is protected from fraud liability. Because according to the card networks, they're saying nobody can clone a chip card. You know, it's very challenging

2 (31m 53s):
Can clone it, but they can steal it.

3 (31m 56s):
Well, they can actually clone a card, but they can only use a magnetic Stripe to process the transaction. And that's why they are telling all the merchants don't accept magnetic, Stripe swipe. They are saying, Hey, could they call it an EMV terminal? Very, you have to insert the card and they are making it mandatory for all the merchants to have an EMV terminal. And that's why a lot of this fraud is shifting online now because it is very difficult for a fraudster to use a stolen credit card in a retail store. So they are shifting.

2 (32m 30s):
Yeah. And I understand all that. And I certainly know what the, what the chip technology is, but it still amazes me that they don't it with a signature anyway, because somebody could still steal your credit card and do a bunch of shopping. But anyway, that's neither here nor there. Now. Now chargeback management is obviously a booming industry. There are other companies in the space. God forbid, why would someone choose chargeback gurus over one of your competitors?

3 (33m 2s):
But you know, you definitely want to work with a company who has been in the payments industry. Obviously, lot of people actually, I mean, quite a few have been in this industry thinking, Oh, I can even actually put together a chargeback package, open a chargeback company, and I can start offering the solution. Chargeback management is way beyond putting together a package and fighting a chargeback. If you truly want to work with a chargeback management company, work with a company that has been in the payments industry. They know the three 60 degree view of payments. That is very, very crucial. Why? Because they are the ones who can get you the best recovery. For example, you hiding the best lawyer versus a lawyer who just graduated out of college.

3 (33m 45s):
Why? Because experience counts for itself. They know the ins and outs of how to defend your case. So that's a classic example I use when somebody asks you, why should they go with you? And also, you know, we come from a computer background and a data, data analytics background. If you have particular a solution such that it makes Ottawa sense. I tell my clients every month you will see the ROI on how many chargebacks we have prevented for you. How much money we ever covered for you. If what you are paying me is more than what I'm recovering you, you can walk away. We have one is to one guarantee that nobody is offered in this business so far, because I always ask myself, will I hire my own company?

3 (34m 30s):
If I am a merchant right now? And if my answer is, no, I wouldn't be in this business.

2 (34m 36s):
And you know what, and you know what, Suresh, there's so many people who don't look at it that way, what they look at it is everybody's a dollar sign and I want sales. And most people look at their companies that way. That's, that's, that's the crazy part. And as a, as a marketing guy from way back, it drives me nuts. So I'm glad to hear that.

3 (34m 57s):
Absolutely. I value the relationship more than anything else. Audit reputation, you know, goes a long way. And we are hired by fortune 10 and fortune 500 clients. And the reason why they're hiring us is because they have done all the due diligence they have compared our company with the rest of the players and they have chosen us. And obviously we all know enterprise companies go through a vigorous, you know, vendor selection process. They don't make selections like that. Sometimes it can be even six months a year and we have been their favorite so far it's because I tell them I don't actually go by emotion. I go by data.

3 (35m 37s):
If the can prove that I'm doing a great job that will speak for itself. And I tell my merchants that look at my data, don't look at me.

2 (35m 45s):
Yeah, yeah, no, absolutely. Absolutely. It should all be based on facts, unfortunately, that isn't the way the world always works. Now, how has the chargeback landscape changed in the time you've been in it and where do you see it heading in the future?

3 (36m 1s):
So when I actually started in the, I mean started when we opened, charged by gross in 2014, the chargeback at that time, the global chargeback volume was anywhere between five to 6 million, five to 6 billion, sorry. And now we are actually approaching close to 30 billion. You can see the growth actually in the seven years. And it's because the e-commerce transactions and mobile transactions are increasing, you know, increasing at a rapid pace. And even the traditional brick and mortar companies right now who have never thought of e-commerce are forced to think e-commerce because the COVID has actually changed the landscape.

3 (36m 46s):
And we all predict actually the COVID situation is going to continue until the end of 2021. So a lot of companies cannot withstand this kind of downtime and they have to think online, they cannot be just relying on brick and mortar store anymore. So the online transactions have tremendously increased and we have seen a 20% spike in chargebacks, just during the COVID period.

2 (37m 12s):
Yeah. I know you mentioned that. What is it now? I'm kind of curious, what's your revenue model? How, if, if someone does business with you, how are you paid for your services?

3 (37m 25s):
Our services are very straightforward. We actually charge for every charge back. We prevent, I show them a proof that I have prevented a charge back on. If they have prevented, you pay me for it. And for every charge back that I touch, I actually, I recover. Then you pay me for it. It's very true.

2 (37m 45s):
So what's, it's like on a percentage basis,

3 (37m 49s):
Actually, we go by a per chargeback basis for every chargeback. We prevent you pay a fee on for every charge back that I defend for you. You pay a fee, but the guarantee that we give you is a dollar, $2 guarantee, which is for every dollar you pay me, I guarantee I will at least get your dollar in return. But oftentimes clients have seen 200 to 400% get Ottawa when they hire themselves.

2 (38m 14s):
And even, even when you do do collection, it's on a it's on a fee basis. Not a percentage. Yes. Correct. Wow. That's, that's a great deal.

3 (38m 25s):
Absolutely. You know, a lot of us find it very valuable. And oftentimes actually in our merchants don't know that is, there is a solution out there that can help them prevent and chargebacks, because for all e-commerce businesses, this is one of the biggest checks.

2 (38m 42s):
Absolutely.

3 (38m 43s):
We have so glad we have helped. Lot of businesses prevent bankruptcies. You know, when I hear stories where I get calls from merchants saying, Hey, you know what? You guys have helped me prevent bankruptcy. That makes her date that makes her fight even more meaningful.

2 (38m 57s):
Oh yeah, absolutely. I had an interview yesterday with the gentleman in the billing space and I asked him what the biggest challenge. I said, I remember when I was immersion way back in the olden days, the biggest problems were fraud and charge backs. I said, what are the biggest problems? Now? He said, fraud and chargebacks. Yes, it doesn't change. Yes. Yes.

3 (39m 20s):
It's always the same. It's an ever-growing problem. And merchants have to think creatively to solve the problem because the landscape is not going to be the same. We all know fraudsters are very creative. They are very smart. They try to outsmart the system and the strategies you have in place. So you need a team who can constantly think for you so that you can think on growing your business, not solving fraud and chargebacks.

2 (39m 45s):
Great. So we're actually, I'm sold. How can someone get started with chargeback gurus or just find out more about your business?

3 (39m 52s):
Absolutely. They can always visit our website, chargeback goose.com, or they can email us VIN dot com, which is w I N a chargeback gurus.com. And they can, you know, let us know what the challenges are. And we get back to them within one business day and we'll put together a team to solve their payment, pain points.

2 (40m 13s):
That's awesome. So rash, I'd really like to thank you for being our guest today on an outside broker talk. And I hope we'll get a chance to do this again. Really soon.

3 (40m 22s):
There was fat. Oh, you know, I want to thank you for having me on this podcast. I really enjoyed it and look forward to assisting your merchants and, you know, continuing our relationship with you.

1 (40m 32s):
My broker tip today is part seven of how to buy an adult website. Now, last week we talked about the agreement and escrow. So now you own the website. What do you do? Now? The first thing you should do is make sure you understand everything about the operation of the site. The previous owner will hopefully be available for a period of time to help you with this. As I mentioned last week, you should establish what the former owners participation will be after the sale, you'll need to deal with production of new content processing, paying affiliates, and many other things. If you don't have experience in these things, you may want to consider our general consulting firm, adult business consulting.

1 (41m 14s):
You can get more information on what this company does@adultbusinessconsulting.com. We help website owners, project manage and guide them to the right vendors. Maybe the previous owner had all the right elements, processing, hosting, payments, production, scripts, et cetera, or maybe they didn't. We can help evaluate that for you. Let us know if we can help. Anyway, you'll now be operating the website. If you don't have someone like our general consulting company to help evaluate all of these items and everything. This side is spending money on and using to operate the website, make sure you're getting a good deal.

1 (41m 54s):
And that these companies are providing the right service and check to see if you can do better. Hosting is a great example on something where people are often both overpaying and not getting the right service. Many times the server is just too slow. If you have any questions about any of this, feel free to reach out to us on our website next week. We'll talk about how to sell a website. And next week we'll be talking to Jason Maskell of Maskell limited.

0 (42m 24s):
And that's it for this week's adult side broker talk. I'd once again, like to thank my guests, Suresh Dakshina of Chargeback Gurus. Talk to you again next week on Adult Site Broker Talk. I'm Bruce Friedman.