You can be in the dog training niche. You can put in a hundred hours or more into developing the worlds' most amazing dog training videos. I mean these vids can be awesome.
They feature your pups and many many hours of footage you've used to train them, you've edited them down, you've paid attention to detail, you've really poured your heart into this... You're super proud of this... It's the best work you have ever done.
You can build a list. Generate excitement, and then launch at a HIGH TICKET price. However, your price is also lower than what it would cost to hire a dog trainer to come to ones' home to train their dog(s).
So, in the customers' mind they're like "this is a really good deal" (comparatively speaking).
Then... people will buy. They will pay your HIGH TICKET price and you'll high five yourself all over your home.
Then... You'll get the dreaded e-mail notification. "This payment has been disputed..." Oh boy... Then you examine the details and you see that the buyer states they never authorized the transaction.... "OH NO!"
You'll submit all the evidence you can get your hands on... IP address of the person when they signed up, e-mail open logs, etc. etc. Then, you'll get a notification later on that says "this case was decided against you..." Ouch...
It turns out you have attracted 2 types of buyers...
- The type of buyer who fully intended to chargeback before making the purchase.
- The type of buyer who had his dog sit in front of his TV and watch your videos, expecting the videos to do ALL the work for him while he / she were vegging out on Netflix.
I've been there, done that, and I have had enough! Product creators are being forced to either drastically lower prices to a point where they feel like "the price is low enough and the value is so high that they will feel guilty making fraudulent chargebacks.."
Or, they're being forced into unscalable business models that involve one on one coaching and support. Using the dog training example, you've been basically duped into training the persons dog for them. Less time for marketing. Less time for funnel optimization. No leverage in your business. No good!!
Why should great product creators be forced to sell enormous value so cheaply for fear of being terrorized by fraudulent chargebacks?
Why aren't platforms like Gumroad, Sellfy, and others doing more to protect digital content creators who offer high ticket goods?
I've been e-mailing every payment processor under the sun and have a catalog of fraudulent chargebacks to use as reference material. As a former fintech CEO, I was forced to read many many many pages of very boring things related to payments.
Finally... I've designed a solution I am comfortable with.
It's one you can copy (at your own risk of course).
This is the system I'll be using to sell high ticket intangible goods to my hearts' content starting very very soon...
1. I will have folks sign up for an account on my site and log-in to their email to click the link that says "verify account."
2. Using the PayPal API, I will verify that their PayPal account is VERIFIED.
3. If they are VERIFIED via PayPal, they will be allowed to checkout. If they are NOT verified, then they will get a "sorry" message.
4. I will ONLY allow non ach related payments. If they do not have an adequate balance in PayPal, or do not use a debit / credit card, then they cannot complete their purchase.
I've over simplified this stuff so I don't bore the crap out of you guys. However the workflow above achieves the following...
1. By only allowing folks with verified PayPal accounts to purchase I am leveraging the data that PayPal collects on its' users. If someone buys my dog training and says the neighbors' dog stole their credit card, PayPal will be able to see "well gee, you've made 193 other purchases from the same IP address, this is invalid!"
2. Users with verified PayPal accounts have LIKELY purchased an intangible good. I don't know of many people who have purchased an intangible good from me who have NEVER bought anything else. So, if they are the type of person who expects to do nothing but sit their dog in front of the TV to watch training videos, they know they will lose if they file a claim under "item not as described" as buyers' remorse for digital goods are not covered under PayPals' buyer protection policy.
3. NO intangible goods vendor will ever in 1 billion years win a chargeback if the money was drawn via ACH. By NOT allowing them to use PayPal to draw cash from their bank, I never allow myself to lose a chargeback that simply cannot be won without an army of attorneys.
The solution I have designed will drastically limit folks who are intent to chargeback from even buying. When they do, they'll have a very difficult time proving that the neighbors' dog stole their credit card...
Again, you can hire a developer to implement what I have designed - at your OWN risk.
Thanks for listening!