9 Year Anniversary + Dealing with Chargebacks

Business Brain, episode 526 for Wednesday, February 21, National Sticky Bun Day 2024. Greetings, folks, and welcome to Business Brain, the show where we take an idea or six, we dissect it, we analyze it, we use it so that we can each individually and collectively tune our business brains every single time we get together. Our sponsors for this episode include gosquaredaway.com contact squared away empowers these highly educated military spouses to become your trusted remote executive assistants. It's. I love this idea. It's brilliant. We'll talk more about it in a little bit. And now here two days later for the release but recording on the ninth anniversary of the inaugural release of Business Brain, here in Durham, New Hampshire, I'm Dave Hamilton.

And here in California, I'm Shannon Jean. Happy anniversary, Dave.

Happy ninth anniversary. Yeah, it's super weird. This show and Gig Gab both released their first episodes on the same day.

That's pretty wild.

I agree.

Yeah, yeah. So we're 526 episodes in. 525.

525. Yeah, we're. Yeah. Assuming the recording's working, we're 526. Yep. That's right.

That's right. And you know, we started the show, it was called DBA Doing Business as.

Right.

Later we changed it to the Small Business Podcast.

Small Business Show. Yeah.

Show wasn't podcast.

No, it was Small Business Show.

Small Business Show. Yep.

And.

And then. And then eventually change it to Business Brain as we kind of tried to expand this concept. And it's been an amazing nine years. When I tell people that we've had a podcast that's been published for nine years, and somebody recently told me, like, 99% of podcasts don't make it past the first year. Maybe the past.

Oh, not even past 10 episodes. Like, that's. Yeah, yeah, yeah, yeah.

Most shows I feel pretty happy. I love doing this show. I've learned a ton, you know. You know, we've written a couple of books.

Yeah.

You know, the mistakes book. The. Was it the hiring book? Was it the partnership Partnership Book Partnership. That's right. And so, yeah, it's great. I still love doing it. It's one of the funnest and most educational parts of my week every week.

Yeah, it, you know, like anything. It A lot like anything that you do regularly, it forces me to focus on this. Right. That. That which is monitored is managed. And I really believe that doing this show has. It helped me with all of my businesses and everything. It's great. Yeah.

And it's expanded my network tremendously. The people that I met that I've been able to help with some projects and some things or just advise and then also folks that have helped me. It's just a great opportunity we've had. You know, we've recorded shows about why every business should have their own podcast. Some great tips in there about marketing your products and getting your exposure out, if you. And, yeah, it's been. It's been great. I. I still enjoy doing it. I love the fact that even after, you know, eight years, eight and a half years, we switched things up, kind of got rid of agendas D, didn't do interviews so often.

Yeah.

Although the last two we've done have been terrific. I think that's a great.

That's a good detour.

Yeah, yeah, it's a good detour. But, you know, we. I think we went a year without doing an interview.

I think that's right.

Yeah, it was interesting. And then we split the show in half and did half on Wednesday. We record them at the same time, but then split it up two different topics on Wednesdays and on Fridays. And our engagement's been up.

And yeah, you folks seem to like it better. In fact, we have a backlog of. Of emails from you that we do need to dig into as well. So.

Yeah, terrific.

Yep.

Yeah. If you want to flood that feedback at BusinessBrain show. Yeah, I'll jump in there and help.

Thank you, folks. It's a pleasure being able to do this show, and it means a lot that we've been able to do it for nine years. That. Yes, sure, we can pat ourselves on the back and say, oh, we're bullheaded, persistence, blah, blah, blah. It's true. Whatever. But I don't like. I thank all of you for continuing to listen and engage in all of those things. That's what keeps us doing the show.

Absolutely. And this mantra that I've had for years and years is, how can I help? And I've tried to teach my kids that. Four most important words. And we would love to help you reach out to us. The podcast on whatever platform. Feedbackusbrain Show. If you want to email and let us. Let's keep working together to build our business brain.

Absolutely. Yeah. No, it's FeedbackusinessBrain show. And if you're wondering what to write us, you could say happy Anniversary. But you could also give us your answer to how can we help? All right, folks, you ever feel like your to do list is a hydra, chop off one task and two more sprout in its place. Take me, for example. Coordinating recording schedules for the podcast is like trying to nail jelly to a wall. Sometimes tricky and messy. And don't get me started on research. It's a time gobbling monster. Oh, and meetings. Without somebody there to take notes, I might as well be talking to my plants. They're great listeners, but not so hot on the follow up. Enter the cavalry. AKA our sponsor, Squared Away. These folks are on a noble quest to empower military spouses by turning them into your go to remote executive assistants. It's like having your own business, superhero cape and all. Imagine having a sidekick who's not just reacting to fires, but is proactive like a business savvy fortune teller. Squared Away assistants are ready to leap tall buildings, or at least daunting to do lists in a single bound. And because they operate in all US Time zones and are as much a part of your team as anyone else, you're not just getting help. You're expanding your business family. So why wrestle with your schedule when you can have a Squared Away assistant do the heavy lifting? Don't wait. Contact Squared Away today to find out how they can help your business thrive. Just go to GoSquareDaway.com contact that's GoSquaredAway.com contact here's to making your business life a breeze. And our thanks to Squared Away for sponsoring this episode. All right, Shannon. Well, we have. You had to give back, what, about $58,000? You were asked to give back $58,000 to the credit card companies.

At one point, you just basically took it. Nobody calls you and says, hey, Shannon, do you want to give back that money? No. It's all of a sudden, you log into your bank and that money is gone. So I wanted to talk about chargebacks and fraud. You know, last year, I looked up this statistic. Last year in small business, owners got defrauded, you know, $1.8 billion in chargebacks, stolen credit cards, all that kind of stuff. So I'd love to share my experience, try to help you not have to go through it, and also get your feedback on how. How we could have avoided it. So.

So, yeah, so tell, tell me. I don't know that I've heard this story from you before. What happened?

Yeah, Norm, this was, you know, a number of years ago. Normally I wouldn't take a credit card for $58,000. It just wouldn't do it. You know, be like, hey, look, you got to do a wire transfer. You know, that kind of Thing, But.

I've done it too. Like, you know, a corporate client or whatever, you know, I want the money in house.

I do, too.

You know, so that was my first mistake. Willing to pay the 3%, like, all of those things. Yep. Yep.

Yeah. And so. And this was a trusted customer, right? Just, like over a million dollars worth.

Of product for me.

Yeah. And wanted to pay card. And I said, okay. He's like, yeah, I gotta, you know, kind of balance out. I said, all right, I'll do it. And I'm pretty sure he even paid the fees. So I was like, all right.

Okay.

Yeah. And so this guy did. We did the charge, we shipped the product. And about. I think maybe about three weeks later, maybe even four weeks later, I got an email. And the subject was, Shannon, I can't pay for these laptops. And I just looked at that. I said, what? I don't understand. You've already paid.

Yeah, it doesn't matter.

No, it doesn't matter. So then I opened it up, and there was a long sob story about, you know, cash flow, this cash flow. It didn't. You know, guy never called me or anything, and I go. I quickly look in the bank, you know, and it's like, okay, well, maybe if I. How can I deal with this? And sure enough, the funds had already been deducted. And, you know, typically back then, when the bank, you know, the merchant processor, they would send you a letter.

Yes.

Oh, by the way, you've. This chargeback's been initiated. We've deducted the funds from your account. Would you like to dispute it? You could try to dispute it. And so it was devastating, you know, as you can imagine. And so tried to, you know, get this guy on the phone, wouldn't take my calls.

Yeah.

It was just. It was just brutal. And he basically said, hey, I'm in trouble to get b. Millie back. I can't make. I can't make this payment. My cash flows, and, you know, this. And so I've had to do the chargeback. And so I. I call the bank, call the merchant processor. Listen, man, I said, I. I don't. I don't have the laptops. This guy hasn't returned anything. Yeah, I haven't heard that there's any problems. And, you know, the merchant services are really not on your side.

No, no, I have had them fall. I've had a few of these chargeback things over the years. Yeah, I've had, you know, some of those go my way. But most of the time, even if I feel like. Like, you in this scenario, you were 100. You didn't do anything wrong. There was correct and there was no return if you have post purchase blues clause in there. Right.

Like no, no, no. Yeah. So yeah, that's what I want to try to figure out too. Is, is I, I have some ideas in this post to how I, you know, we could have avoided it.

Did you wind up getting the money or the laptops back? Kind of. Okay.

So, you know, after he, this guy, it told the merchant processor, hey, these, the laptops are defective. Okay. I said, great, I'll send a truck, we'll come pick them up like today.

Yeah.

He says, oh, I can't do that because they're with my customer. So not only did he need my money, but he needed his customers money too.

Oh yeah.

So that's where it, you know, I really raised a stink and I said, this guy doesn't even have the product. Oh, I'm going to get it back. So all of it was this kind of gambit to bide his time while his cash flow, he was floating.

He was using you and others to float his cash flow.

The crazy thing, if he'd have called me and asked me to borrow $58,000, I probably just would have let him borrow it.

Yeah. If he was that good of a customer, sure, he was a great customer.

And I knew him. I'd been out to his place and all this kind of stuff, but he didn't go that way.

But there's a lesson right there. Like we always talk about how, you know, networking is important. It's one of the reasons we go to like conferences and those sorts of things. This guy had already won that game. Like he had already networked with you to the point where you would have helped him in some way if he had only asked for help. We just said it before, how can we help you? How can I help you? We actually mean it when we throw that question out there.

Absolutely.

Because tell us if he would have.

If he would have called me after the purchase or whatever, I could have worked with him and said, okay, I tell you what, how much do you need? Let's figure it out. Let me give you back some of this. Let's, you know, we'll pay it off. I mean, there's ways to make it work. I didn't want to lose him as my customer.

Right.

And he, I know, did not want to lose me as a supplier, which, that's what happened. We, you know, we didn't couldn't continue the relationship. I did eventually get Back some laptops. We, we had to go fight back and forth because a lot of them didn't match what I'd sold him.

Okay.

This guy eventually went out of business.

I'm not surprised to hear that.

Yeah, yeah, he was, he was a great guy. And, and I, I, I realized that. Okay, so now doing this post mortem, where did I screw up? Number one, I never took a credit card payment for anything that big, anything over 10 grand. We just, hey, this is, Forget it, forget it. Take it or leave it. Yep. Number two, I think I would put up in here. Oh, this. So I created this form that I required them to sign in anything, even like 10 grand. And it was so.

Punitive, it caused.

A lot of friction.

Yeah, right.

And the purpose of it wasn't really even to get them to sign it and initial everything. The purpose was to get them to just send a wire transfer.

Right.

It's like, okay, if you have to use a credit card, you have to go through this, you know, five page form, initial everything, sign here over and over and over and agree that this is. And even though I don't know whether I could have enforced. Worked pretty well. It got. Most people said, we can't sign this thing. And I said, okay, send me a wire transfer.

That's okay. Yeah, send me a wire transfer. Right.

And you know, I've had, I've had a lot of responses on this post that, you know, people had created funnels on the website with check boxes that you must agree to this.

Yes. And a lot of that can be, can be used for the purpose you did to create friction. But the other way that that can work is if you essentially make the person agree that they are responsible for this, you know, five times before they actually charge the card in their head. They have committed to you. Right. This isn't just, here's my credit card and I might just pull it later. It's fine. This is. Now, wait a minute, I've, I've put my word on the line five times. Like people generally, I mean, there's sociopaths out there and whatever, but generally people will not walk back on their word as easily as they would just if, if there was no personal guarantee, you know, that they had made.

And I don't think it's something you can, this is like a business to business.

Yes.

Solution. Not to consumers, because they're never going to do that if you go, no.

No, this is, yeah, this is B2B examples. That's fair. Yeah.

B2B.

Yeah.

And so, you know, it's just. And we recovered. You know, we. We dealt with it and moved on and didn't dwell on it, but we did change procedures and. And ultimately it was my fault. I wanted the cash quick. I wanted to make the sale. I don't recall if it was the end of the month, end of the quarter or whatever, but, you know, I get those dollar signs in my head and I start thinking, man, a $58,000 sale right now is going to put us over the top.

Yep.

I'm pretty. I'm sure of it. Even though this was, you know, a number of years ago.

Oh, yeah.

I'm sure I was the driving force.

But that's taking the credit card, but you can't. I mean, there are going to be those moments where that driving force creates a scenario that you would prefer to have avoided. But yes, that driving force is also what kept you in business after this happened to you. Right.

Like, it's a balance.

It's a balance. You take it and you're like, okay, yeah, I got ahead of myself on that one. But it is good to post mortem it and say, okay, what would I do differently? And in this scenario, you realized, okay, well, I would probably create this friction. You know darn well that this sale that wasn't a sale in the end, would not have happened if you forced this guy to do a wire transfer.

Correct. Yeah. He didn't have the money. No, clearly.

Right, right, right.

Yeah, yeah, it's true. And so, yeah, it's just, you know, you got to be super careful now. Fraud is crazy. I'm reading about, like, some of this AI Phishing voice things coming up, and you just got to be diligent. You know, we've been burned. Back in the day, we used to do COD shipments and we've been burned. Get this, they were real travelers checks. But because they were stolen, we got. They sucked the money out of our account. And, you know, I had never. I mean, I wasn't even in. In the. The realm that how would this would work. It wasn't that they were fake travelers checks, is that they were stolen from like an American Express office or something. And they said, oh, they're not real. They were stolen. And, you know, that. That was a tough one. We eventually got FedEx to reimburse us.

I was going to say, because they're the ones that, that collected payment.

The transaction. Yeah, they paid it and all this kind of stuff. And so. But I would love to hear what you've done with your business to combat fraud. How do you deal with this st. I do wrong. Tell me. You know, help us. Help us learn more and so. So we don't get scammed out of the. Out of the cash that we work so hard to make.

So hard.

Yeah. Brutal.

Well, I'm sorry. Thank you for sharing that story. I'd never heard that one before. That's a. Yeah, that's an unfortunate one. But there's always lessons. We call our mistakes our tuition. And now maybe you begin to understand why. Thanks for hanging out with us, folks. Like he said, feedback@businessbrain show. Make sure you check out our sponsor, gosquaredaway. Com. Contact, but please do send us that email feedback@businessbrain show. Keep living that charmed life. We'll see you on Friday.