By Jordan Malik, MBA/MS & Award-Winning Amazon Pro Merchant & eBay Top Seller


I Got in BIG Trouble by Winning Jim Cockrum's Contest

NOTE: This blog has moved to:

Renowned Internet Marketer Jim Cockrum recently held a contest to see who could sell the most copies of his fantastic new book, 100% of the proceeds of which goes to Hope Village in Detroit.

I won 1st place in the contest (I sold over 100 copies, and here's the proof). So a BIG 'thank you' to my subscribers here and at my other site,

I won because I made a RIDICULOUS offer to my subscribers, if they bought the book. I mean OVER THE TOP ridiculous. (I offered a refund of 1 month's subscription to, and a couple of other perks).

The refunds are what got me in trouble. BIG Trouble.

See, I processed WAY over 70 credit card refunds in about 2 weeks' time, and the stuffed shirts nice guys and gals at my payment processor (PowerPay) threw a huge hissy fit and shut down my site's ( ability to take credit cards. All with 1 week's notice, no negotiating. The worst part is, they were really sneaky about it. (They avoided my phone calls and gave me veiled answers to a lot of questions). To make it worse, PowerPay knows NOTHING about e-commerce (In 2011? What's wrong with them. Oh, that's right, they're in Maine).

Anyway, I was able to find another payment processor (which was a nightmare too), but I learned a few things I want to share with you, if you decide to take credit cards on your web site.

> Most payment processors haven't the slightest idea about ecommerce. They think everything sold online is a scam. Prepare to have them be very skeptical of your operation. They lump legitimate sites (like with stuff like

> Don't dole out credit card refunds like they're candy, like I did. Refunds are called 'chargebacks' and in the world of payment processors, that's a dirty word. Payment processors completely wig out. I should have given the equivalent of 1 months' access instead by just extending my members' renewal date for another month. I don't why I didn't think of that when I did my promotion. Duh.

> The payment processing industry is due a major shakeup. It's a stalwart business. Payment processors are stalwart companies, who have to partner with stalwart 'payment clearing houses', which process payments from stalwart credit card companies. Everyone managing the payment 'food chain' is watching you like a hawk. Thank God Paypal (by comparison) is progressive. This industry needs 100 more Paypals.

> It's easier to just take Paypal. In fact, I would have just used Paypal for memberships instead, but Paypal isn't fully 'inegrate-able' with my membership site's ecommerce platform. But Paypal is fine in most cases. Some e-commerce purists will balk at only accepting Paypal, but the benefits for smaller e-commerce outfits far outweigh the potential headaches.

Ok I'm done sounding off. Do you have a similar experience with a payment processor? Or PayPal? Post by clicking on 'Comments' below.

-Jordan 'J.B.' Malik
Founder, and

1 comment:

Eric S. said...

Hi Jordan,

Now I'm kicking myself because when you issued me that refund I was saying to myself, why isn't Jordan just giving us an extra (free) month instead of doing a refund? Too many fees, restrictions, red flags, etc. as you mention in your post. I guess I should've said something to you. I've had my own Merchant Account in the past and it's a big PITA, which is a big reason why I love selling on Amazon!

Eric Steinberg
The FBA Shipping Dude