We offer a license-based service where the client purchases 1 or multiple license and pays on a monthly-basis in order to continue using the service. Currently we make them sign a credit card authorization which indicates: -number of licenses being activated -cost per license -total monthly charge amount -clearly states that we will automatically renew their service every month unless canceled by email or certified mail. Now what happens is after they sign the form they decide to either: -activate additional licenses a few days later through their web account (they can simply log in and purchase more licenses) -cancel licenses throughout the month For example, a single license costs $100/month, and the client purchases 3 licenses which comes out to $300. So on the CC form they indicate 3 for # of licenses, and $300 for total charge amount. Then maybe 10 days later they log into their admin and pay for 5 more licenses (which gets prorated based on # of days left in their billing cycle) so when this scenario occurs we currently contact them and ask them to send us an updated credit card authorization form with 8 for # of licenses, and $800 for total charge amount. Sometimes we run into issues where the client gets auto-billed the following month since they never canceled and they decide to do a chargeback. Or they don't need as many licenses as they did the previous month and decide to do a chargeback for however many licenses they don't need. We win 99.9% of our chargebacks because we always have an updated credit card authorization form on file which indicates the amount they get charged for. The problem we have with this process is that we need to send the client a new credit card authorization form every time they pay for additional licenses or cancel licenses and ask them to update it with the correct number of licenses and monthly charge amount. This way whenever we do get a chargeback we usually just send the bank a copy of the credit card authorization form and that's all we need to do. This has become way too much work because we are growing and it requires us to constantly chase after the client to get them to fax/email in an updated form. And if they don't send it in a certain period of time we suspend their service until they do. However all of this is just a big mess of manual work because it irritates our clients as we are literally stopping their service even if we have given the plenty of warnings and at the same time it takes up too much time for which we do not have the resources for (manpower) to constantly contact them and ask them for an updated credit card form. So my question and help that I need from you guys is the following: What language or how can we protect ourselves in a way where they sign 1 single credit card authorization form where it authorizes us to use that credit card to pay for any/all licenses that they decide to activate. I know there are plenty of companies out ther where there is no credit card authorization form to sign and they rebill the customer unless they cancel, however in our case we are dealing with b2b customers and our average rebill amount is over $600/month so it's not a small-ticket charge. Up until now we have done it our way to protect ourselves as much as possible, but I'd like to know if anyone has experience dealing with such a problem and what your process is like. Is it possible to have 1 single credit card authorization form which we then add to their account for them to log in and use to activate additional licenses at any time? Or are there any better ways of doing this? I would really appreciate any insight you guys might have on this When we contacted Visa they would not give us a clear-cut answer and Amex told us that our credit card authorization form needs to indicate the exact amount that will be charged every month, which is not true because we fought a chargeback for Amex where we didn't have the proper amount on the authorization form, but we still won after providing documentation. So more or less no one at Visa or Amex really wants to give an accurate answer because there doesn't seem to be one ?? I appreciate any help/advice I can get!
You're navigating a sea of gray when it comes to recurring charges. Here's visa's guide to recurring payments in case you haven't seen it, very basic though - http://www.visacemea.com/ac/selling/pdf/recurring_payments_bpg.pdf If you have a recurring billing contract with the customer, the most important thing is to send them a lot of emails letting them know the total to be charged, before you charge it. Also, make sure you include links and contact info so that they can modify their existing licenses before the card is charged. We use an auth form as you have suggested. It basically states that we can charge the customers card as needed, with the authorization from specific people in their company. When these people call in or place an order, we charge the card. Ours doesn't have, but you can also put a space for a max amount to charge without a separate authorization/signature. I'd be happy to email it to you. It's very basic so if you want actual legal protection you would probably need an attorney to write one up for you. If you do go this route, make sure to hire an attorney that understands the payments business. There's a number of firms that specialize in processing and bankcard.