Tips & Hints – Website Sales

Layman’s Version of New Visa Mastercard Requirements For PayPal Merchants

Posted on July 19, 2010. Filed under: eBay, Paypal, Tips & Hints - Website Sales, Tips - for the eBay Seller | Tags: , , , , , , , |

All ecommerce sellers who accept PayPal will need to accept the new Commercial Entity Agreement by October 1, 2010 in order to continue receiving Visa and Mastercard funded payments.  

Accepting this new Commercial Entity Agreement actually means that you are agreeing to accept each of the different commercial agreements for several banks.

  • Commercial Entity Agreement with JP Morgan Chase
  • Commercial Entity Agreement with HSBC
  • Commercial Entity Agreement with Wells Fargo
  • Commercial Entity Agreement with Wells Fargo – Pro
  • Commercial Entity Agreement with National Westminster Bank
  • Most of the Commercial Entity Agreements are very similiar but there are some differences.  While the agreements are obviously very complex, I have tried to boil them down into a short list of 5 Do’s and Don’ts that encompasses the highlights of various agreements. 

    1. WHO can and should give and get information?

    Ecommerce merchants must clearly identify themselves to buyers so that buyers know from whom they are purchasing.  This includes the requirement that sellers provide the address of their permanent establishment on their website if they are accepting PayPal payments on their website.

    Sellers cannot ask buyers for their Visa/Mastercard information (card number, expiration date, CVV2 number) and if for some reason the seller gains access to this information, either by design or by default, then the seller agrees to notify PayPal and the buyer promptly.  This is a major requirement because all sellers who accept PayPal must be compliant with the Payment Card Industry Data Security Standards.

     2. WHAT must sellers do in the event things do not go as expected?

    If sellers plan on limiting the return of their item, they must clearly indicate that to the buyer BEFORE the purchase (thus explains eBay’s requirement that all listings have a return policy stated).  If the seller does not want to offer a refund for the return of an item, they need to state something like “NO REFUND, EXCHANGE ONLY”.  Of course, the seller must always provide the item as described.  For example, if a seller offers a blue shirt but delivers a red shirt then Visa / Mastercard would expect them to give a full refund.  But if the seller delivered a blue shirt but the buyer decided that they didn’t want the shirt because it didn’t look good on them then the seller has a right to offer to exchange the item rather than refund the purchase price.

    In the event of a chargeback, sellers must work through PayPal to resolve complaints.  This is often a source of seller frustration because PayPal decides which chargebacks they will fight.  

    3. WHEN can an ecommerce merchant accept PayPal?

     Sellers can only use PayPal to accept payment for goods and services they have provided within a 30-day window (and the days are counted as BUSINESS days).  PayPal cannot be used to collect payment for any previous “debt”.  So, for example, if you are a service provider who offers payment terms (ie customers normally pay their invoices by check within 30 days)  and your customer doesn’t pay your invoice then you cannot agree to accept PayPal for the service you provided 6 months ago but never got paid for with a check. 

    PayPal also cannot be used to accept payments for any good or service that would be considered illegal.  

    Partial shipments can be billed separately so that means one shipment tracking number must be provided for each and every PayPal payment.  If  an eBay buyer purchases 3 items and makes 3 separate payments, each with full shipping cost, a seller who combines all 3 items into one package and gives back a partial refund of shipping for each transaction is at risk for 2 out of the 3 transactions since there will only be one tracking / delivery confirmation number available.

    4. WHERE can ecommerce merchants indicate to buyers that they accept Visa / Mastercard?

    Sellers can display the Visa / Mastercard logos on their own websites as long as the logos are not misleading.  Sellers cannot make it appear to potential buyers that they are accepting Visa / Mastercard directly unless they have their own merchant account.  So any ecommerce merchant who accepts Visa / Mastercard only through PayPal must make that clear by using appropriate logos and wording.    And ecommerce merchants cannot display logos in a way that would imply that Visa / Mastercard endorses the product or the website.

    5.  HOW are ecommerce merchants expected to accept PayPal?

    Sellers cannot establish a minimum or maximum transaction amount.  If a buyer wants to use PayPal for a $1  purchase, for example, then an ecommerce merchant must accept payment and must not charge extra (surcharge) to the customer who uses PayPal.  This provision applies to U.S. sellers but some countries do allow merchants to add a surcharge if it is disclosed in advance.  But this is strictly forbidden in the U.S. 

    Additionally, sellers cannot in any way try to discourage buyers from using credit card funded PayPal payments.

    NOTE that I am in no way giving any financial or legal advice, just doing my best to summarize all the lengthy legal agreements of the new Commercial Entity Agreements.

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    5 Things Every Mail Order Business Should Know about Shipping Insurance

    Posted on August 5, 2009. Filed under: Amazon, eBay, Tips & Hints - Website Sales, Tips - for the eBay Seller | Tags: , , , , , , , |

    In life, we face the possibility of a large loss if we own a car or a home or other valuable property.  Sometimes we don’t want to take the risk that we can “lose it all” so we purchase insurance where we “lose just a little” in the form of insurance premiums in order to protect ourselves from total loss.  It works the same way in the mail order business.  Any online merchant that ships packages to their buyers is faced with the possibility that the package will not be delivered to the recipient in the intended condition.  And shippers can decide to transfer the risk of total loss to an insurance provider in return for a small fee.  Deciding when to insure a package is not always easy.

    1. Don’t view each transaction in isolation.

    As an ecommerce merchant you cannot expect that all your packages will arrive perfectly every time.  It just isn’t realistic.  So, you need to think about how many times a loss occurs in your business and how big the loss is each time.  If you ship 100 packages a month and expect a $20 profit from each package then you would expect a total of $2000 at the end of the month.  But assume one package is not delivered as intended and you experience a $200 loss.  Instead of $2000 for the month you earned $1800 for the month, or $18 per each package shipped.  Past history is an important factor here, when looking at your business in the aggregate.  Assume you experience a loss about 24 times a year, or about twice a month.  In the above example, each package shipped would then earn an average of $16 profit.  If that is an acceptable profit level for your business then the losses are affordable for you and purchasing insurance from a third party provider may not be necessary for you.  But if you could purchase insurance on all 100 packages for less than $4 a package (the average loss per package) then you might want to consider purchasing insurance.

    2. When insuring packages against loss and damage with a third party, there is a cost to you that is more than just the amount of the premiums.

    If you pay for insurance for each and every package you ship then there is an easily identifiable cost that you pay to a third party provider for the cost of insurance.  But when a customer contacts you because a package was not delivered or was delivered damaged then there is a cost for you to deal with that issue.  If you “self-insure” then you can deal with the issue internally and the time to manage the “claim” is significantly less than if you have to file a claim with someone else.  With an insurance company, you have to fill out insurance forms, provide copies of documents, and submit the completed paperwork and then wait.  And most of the time you have to involve the customer in the process and get a statement from them and/or ask them to make the package available to the carrier for pickup or even to take the package themselves to the post office, if postal insurance was purchased.  There is time involved in communicating and coordinating with the customer to process a claim when an insurance company is involved.  All of the related costs associated with filing insurance claims may not be as easily identifiable as the cost of the insurance you pay but there are real costs to your company that are above and beyond the insurance premiums you pay. 

    3. The “law of averages” is important but always insure a package that you could not afford to replace or refund.

    If your past history shows that 99.99% of the time your packages arrive intact then you may decide that, as a general rule, you don’t need to purchase insurance on the packages you ship.  But you should also have an established policy whereby you place an upper limit on the amount of risk you are willing to take per package.  If your average package is valued at $200 then you might decide to insure any package where the value exceeds $400, for example.  If losing $400 would really hurt your business for the month then you should insure that individual package even though, as a general rule, you don’t pay for insurance on packages you ship.  Establish a “tolerance level” dollar amount, the amount of loss your company could take without materially affecting your operations.  Making those insurance decisions in advance prevents having to make decisions “on the fly” about each and every package. 

    4. Define each of the risks and assess the risks according to your business model.

    Most mail order companies face two significant risks: (a) the package gets lost in transit or (b) the package arrives damaged.

    In assessing each of the risks for your company, it is absolutely imperative that you evaluate the risks while considering all the relevant factors.  For example, it is not simply enough to have the item delivered to the recipient.  You must be able to prove delivery was made and the type of proof needed depends on what form of payment the buyer used.  For example, a business who sells a $25 item on eBay where the buyer paid with PayPal will only need to supply proof in the form of delivery confirmation.  But if the buyer paid for the eBay item with a merchant credit card, the seller would likely need to supply proof in the form of signature confirmation for this very same transaction.  Understanding the requirements for proof of delivery based on the payment method is critical in determing the extent of the risk for nondelivery. 

    Of course, different types of items shipped would have different risks when considering whether an item has a high likelihood of arriving damaged.  Obviously a set of dishes would be more risky to ship than a set of handkerchiefs.

    There are a number of relevant factors that must be considered when assessing risk and those factors would vary from business to business.  The time of the year may be a factor for some businesses who sell mostly during the holiday season as they will likely experience a much higher percentage of risky transactions during that time of year.  And a business who ships to international customers will surely face more risk than a mail order company that only ships domestically. 

    5. Understand the insurance coverage you buy BEFORE you need to file a claim.

    When you pay for insurance, you want to make sure you understand all the details of what is required of you to meet the eligibility to be covered in the event of loss or damage.  For example, if you ship a package via FedEx Ground to a residence and FedEx leaves the package on the doorstep but you do not request in advance and pay for signature then you are not covered by Fedex insurance if the recipient claims the package was not delivered.  (Refer back to point #4, though, because if your buyer purchased an eBay item and paid with PayPal, you would not face a financial loss because you would have enough proof for delivery in the event of a Paypal dispute.  However, there is a very real risk that your customer would be very unhappy and would leave unfavorable ratings for you.)  Be sure to read all the fine print about insurance coverage because it is a really disappointing feeling to discover after the fact that you didn’t take the necessary steps to qualify for coverage after you paid for the insurance.

    In conclusion, all online sellers ultimately bear the risk of failing to deliver the package to the recipient in the condition stated.  Ecommerce merchants can do everything right in preparing the item(s) for transit but we must rely on the carrier to do their part, too.   And when the shipping carriers fail the mission, it is the seller who is ultimately responsible to the buyer.  It is just one of the risks a seller takes.  And the cost of that risk should be considered in the seller’s pricing model, both in determing the price of the product as well as the price of the shipping and handling charge. 

    Any seller can choose to purchase insurance but third party venues, such as Amazon, Bonanzle, or eBay, do not require sellers to purchase shipping insurance.  Online buyers are not given the choice to purchase insurance because they bear none of the risk in the actual shipping of the item.  Insurance is to mitigate risk and because the seller is the one facing the possibility of loss, the final decision about whether or not to purchase insurance from a third party is a decision that must be made by the seller.

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    Vendio Free Webstore: A Bargain or a Bust?

    Posted on March 30, 2009. Filed under: Reviews, Tips & Hints - Website Sales, Uncategorized | Tags: , , , , , , |

    Earlier this month Vendio announced a FREE ecommerce webstore offering.  While I thought the news was “interesting”, it didn’t really grab my attention.  For 10 years I have been creating websites and I have experienced the spectrum of webstore offerings ranging from very good platforms (Miva Merchant) to very bad platforms(Prostores) so the Vendio news did not “WOW” me instantly.  My first thoughts were “well, you get what you pay for” and “free” isn’t what necessarily causes me to get excited.  I don’t mind paying for value.  And, honestly, I am averse to “disruptive innovation” and “change for the sake of change” so I have to be thoroughly convinced about a product’s potential before I’ll invest my time in learning a new system even if it is free.  While my first impression of Vendio was not great, I must admit that once I gave Vendio a second look and took some time to learn about them and what they have to offer, the WOW factor of their new webstore has me completely convinced to give them a try. 

    After I created a new Vendio account to take a look at their new webstore offering, I poked around the system for a few minutes.  I then logged out and figured I would come back later when I had more time.  A short while later I received an email from Vendio reaching out to me, letting me know that they were available if I needed any assistance.  Now, great customer service always gets my attention so I went back to the Vendio webstore and spent a little more time learning more about the system.  

    I learned quickly that the Vendio store has the basic elements needed for a good webstore including the ability to create a website with a different template other than just a basic standard template. 


    So far so good.  But then I learned that not only can a user change the underlying template, but within the template changes can be made.   And, most impressively, these changes can be made quickly and easily by just using “drag and drop”. 


    So, someone designing their new Vendio webstore can quickly move the shopping cart information from the right side of the screen to the left side of the screen, for example.  No programming skills are necessary.  By this time I found myself focused intently on the screen, becoming considerably more interested in this “free” offering.

    But looking good on the surface (presentation) is only part of the equation.   The underlying “guts” of a webstore is the critical portion.  When I attempted to input shipping costs, I noticed that the option for domestic shipping was all that was available to me. 


    So I sent an email to Vendio inquiring about the availability of shipping costs for international buyers.  The very timely response sent to me was ” To add international as an option, go to Create Items, then open up the gear (view options) and add International Shipping.”

    I even received a screenshot to help explain: (below is a screenshot from Vendio):


    So, really, what I found is that Vendio puts the “basics” out in the open so as not to overwhelm a new user who is trying to design their store.  I like that.  I think it was explained very well to me in an email by Crystal, an employee of Vendio, who I happen to also follow on Twitter.

    “One of the concepts that is prevalent is discoverability…. And what this is, is that the more a user utilizes us, the more features he/she “discovers”. Not all the bells and whistles are needed by every seller, so we hoped with our set up that a user can get in and get set up..and then discovers we do offer additional features. It’s daunting to lay out a feast with 1000 dishes and expect someone to fill up their plate with everything they will ever need. We hope that as users gain more experience, they will add “dishes” to their plate.”

    What a great concept!  Give me simplicity, just the basics, and then let me make it as complicated as I want and need.  At this point in my review of the Vendio store, I was saying “WOW”.  I was really impressed which doesn’t happen too often.  But I had one concern.  The Vendio store is free and I know that nothing is really ever free in business and I wouldn’t expect it to be.  Again, I went back to Crystal and asked the question.  She sent me a rather lengthy email which convinced me that the Vendio FREE webstore offering is not a gimmick.  She even said something very telling: “We also have other free products that have been free a long time J..and others, like gallery, that we WERE charging for, but are now also free.” 

    Vendio does offer services which are not free.  My guess is that Vendio hopes that they can attract new customers with their free offerings, like a Free Vendio webstore, and that new users will eventually try other “pay for service” Vendio offerings.  (Note this is MY opinion only)  I think it is an incredible Marketing approach for Vendio as I, for one, would probably never have considered spending money with Vendio had I not tried their free webstore.  I am so impressed with the functionality and ease of use of the new Vendio webstore and Vendio’s customer service that I would definitely consider utilizing their other services which are not free.  I do not mind paying for value and given my experience thusfar with Vendio, I am sure they offer other (pay-for-fee) services which could help me in my business.  Once I get more familiar with the Vendio webstore I’ll be checking out the other services that Vendio has to offer.

    DISCLOSURE: I was not compensated in any way for this blog post.  

    More information about Vendio can be found at:

    Vendio_Crystal can be found on Twitter at:

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    TheBrewsNews Report: Volume II

    Posted on November 7, 2008. Filed under: .TheBrewsNews Report, Amazon, eBay, Tips & Hints - Website Sales, Tips - for the eBay Seller | Tags: , , , , , |


    Volume II of TheBrewsNews report is shipping November 10th and includes:


    Basic differences between shipping Fedex/UPS versus the post office and the different ways to generate shipping labels for postal shipments.

    How to use Amazon’s gift services options and an explanation of Amazon’s Performance Scorecard.


    An interesting and unique way to get FREE advertising to your website.


    A brief explanation of eBay’s mutual transaction cancellation and how it affects buyer’s ability to leave feedback.


    How eBay sellers can easily try the Free Shipping option on eBay without making any changes to the listing.


    Useful Tips for product sourcing for the home-based seller who doesn’t have a storefront.

    TheBrewsNews Report is an online seller’s guide written by the experts, other online sellers.  Those who contribute an article to any volume of the report receive that volume in the mail at no cost.  Otherwise, the report is available for purchase for a nominal fee and will be mailed to you.  TheBrewsNews Report is sent by priority mail and the cost is $14.95 delivered to a U.S. address and $24.95 delivered to an international address.  Note that the price includes the cost of priority mail shipping as well as the cost of the report.   

    Click  HERE to order

    Add’l note: The new logo for TheBrewsNews Repot comes from Mechelle.  Thanks!

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    Website Tuneup: Make Sure Your Website Uses the EASY Button Approach

    Posted on October 13, 2008. Filed under: Tips & Hints - Website Sales | Tags: , , , |

    There is no question that the online market is competitive and that website owners need to do everything possible to make it EASY for customers to communicate with you once they find you on the web and to place orders quickly.  Online shoppers, often in a hurry, are not likely to go searching through your website to find how to contact you or how to place an order.
    1. Make sure you have your contact information someplace easily visible on EVERY page of your website, not just the Home Page or the Contact Us / About Me Page.
    2. Make sure you have an email signature with COMPLETE contact information that you insert at the end of every outgoing email, such as the order confirmation email.
    3. Every postcard, newsletter (online or offline), sale flyer, and catalog needs to have contact information easily visible.
    Enlist the assistance of a friend or family member.  Ask them to sit at your computer and pull up your website.  Ask them (a) to locate your contact information and see how long it takes them and (b) ask them to place an order for a specified product and watch how easy or difficult it is for them to do so.  The K-I-S-S approach of keeping it simple is an incredibly important concept for website owners. 
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    TheBrewsNews Report: Volume I

    Posted on October 6, 2008. Filed under: .TheBrewsNews Report, eBay, Tips & Hints - Website Sales, Tips - for the eBay Seller | Tags: , , , , , |


    TheBrewsNews Report is an online seller’s guide written by the experts, other online sellers.  Those who contribute an article to any volume of the report receive that volume in the mail at no cost.  Otherwise, the report is available for purchase for a nominal fee and will be mailed to you.  TheBrewsNews Report is sent by priority mail and the cost is $14.95 delivered to a U.S. address and $24.95 delivered to an international address.  Note that the price includes the cost of priority mail shipping as well as the cost of the report.   

    Volume I – October 2008 issue

    This professionally bound 22-page report includes a wide variety of information.  There are 11 different articles in this volume.  Included in this report is information on a free email mailing list service for online sellers who send out 200 emails a month or less; the mailing list service is low cost for those who send more than 200 emails per month.  Also included is information about a great low-cost service for sellers to send out snail-mail advertisement mailings (like postcards with a coupon, for example) to customers without ever leaving the comfort of the computer.  No more printing out mailing labels and/or printing postcards for your advertising campaign — now there is an extremely low-cost way for you to upload addresses and with a click of your mouse, have someone else do all the work for you.  Both of these low-cost services are great for the online seller with an established presence on the internet getting ready for a holiday advertising campaign or for the eBay seller who is establishing a presence outside of eBay and needs to notify existing customers of their change in venue.

    This report also includes a section titled “Things You Might Not Know about Paypal” which could save you lots of money by just knowing when you are at risk. 

    One of my favorite articles in this volume is titled “How to Improve Buyer Satisfaction and Increase Sales Without Spending Money or Giving Up Profit.”  This is an outstanding article, well worth reading.  And for anyone who ships boxes, rather than flats or envelopes, there is a useful article titled “How Strong is Strong Enough.”

    For the eBay seller, a few great tips for the new eBay Fixed Price 30 sellers is also included in this volume.  Also, there is information about how to get your View Item Template into the eBay sandbox.  And, for the eBay seller, there is an article titled “Great eBay Marketing Ideas from an eBay Powerseller.”

    For any online seller who is not familiar with Prostores, this volume of the report includes a brief introduction and a quick review of Prostores.

    An important topic for online sellers is knowing how popular your ecommerce website is and this volume of TheBrewsNews Report gives information about one of the free tools website owners can use to monitor traffic.   And, to close out the volume, is a great article about recommended steps website owners should take to convince shoppers visting the website that the owner is trustworthy.

    Click  HERE to order

    Add’l note: Coffee cup, coffee, computer, and monitor are NOT included in the price.  The price is for the professionally bound manual only.

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