Inertia

Day 1: Welcome to the compliance jungle 

Doing a blog about artrepreneurship (that's art + entrepreneurship in case you were wondering ... I like to make words up) has been on my mind since I started ArtJamz in 2010. With each day comes the excitement, thrill and frustration of starting, owning and growing a company from scratch. Especially when you are bootstrapping like we are. After each day passed, I would say to myself, "man, I wish I would have documented what happened that day, I mean, even Ronald Reagan gave a few sentences a day and he was president. And that (whatever) that just happened was insane." Well (best Ronnie impersonation).... today is the day. Mainly, because sometimes the back-end compliance, finance, taxes, HR, licenses, permits, staffing, utilities, lawyers, accountants, contractors, social, digital, online, web, app accounts, and hundreds of other a sundry things keep you from doing what you actually got in to doing in the first place ... being an entrepreneur.  Why today? Here's today's fun dealings in business ownership...

MERCHANT SERVICES and Chargebacks

Ah, the joy of merchant services. Authorization companies. Processors. Here's a little diagram to help you:

Easy right? Now add in the fact you need one authorizer and one processor for online and one for card present. Oh, you do? And they each have a fee. (of course). And they hook you by saying your rates are like 1.9% - 2.4% per transaction. But, funny thing is, my card present are always 3.0% and my online are 4%. Call and ask them why? "Oh, that's because people are using affinity and reward cards". Of course, they are! Who DOESN'T use a reward card? File that under "The things merchant services sales people don't tell you...." "Well, yes, the rate is 1.9%, but really only if someone is using a debit card with their left hand between the hours of 500 to 515AM in the mountain standard time region, during a solar eclipse, on a leap year... then it's 1.9%. Otherwise, it's about 4." 

But I digress. Today, it was "the chargeback' that lead me to blog. We have a 48 cancellation policy. It's on the event ticket, it's on the order form before you order the ticket, it's on the order confirmation page, and it's on the ticket. Four places. Is this enough for Visa? No way! You have to have a separate page with a button for customers to click saying "I agree to the terms and conditions." even though it says it in 4 other places. Our first chargeback was reversed. I took the time to send in all our event screenshots and emails with the customer. Yeah! We won. Not so fast. The customer sent in another chargeback claim, on the same case. Now Visa tells us we need a terms and conditions button on our ticketing page. I guess they missed that last time when we got the chargeback reversed? So.... I call Eventrbrite, the company that we've been using for 3 years for our online ticketing. Since, I'm using our own payment processor (authorize.net), they basically wash their hands and say "Not our fault." I ask them... "aren't you in the ticketing business? I mean your website boasts 98,080,306 tickets sold. Wow. impressive. You would think somewhere in the process of selling almost 100 million event tickets someone in your hip and techy SF office would have figured out that Visa requires event organizers to have a terms and conditions button that customers click, in order to protect the event organizer from a chargeback; and that 'order form' you give us doesn't cut it." Eventbrite rep ...silence. Maybe by ticket 100 million they will figure it out. When I speak to my merchant services rep (who sounds like he's working for Visa.... I thought they were supposed to be on my side?) I ask him, how come I don't see these terms and conditions boxes when I buy a movie ticket or something. He calmly states, that those sites do so much volume that it doesn't matter to them. Great. So it's just the small businesses that it hurts. In our case, in this instance, we had a sold-out event with 50 spots. We pre-purchased goods, champagne and food for each person. We turned away lots of people since we were sold out. We had our cancellation policy in 4 different places. That person doesn't show up. We lose out of pocket for the stuff we had to buy for that person, we couldn't fill their spot since we held their spot for them, we put our cancellation policy in 4 places. We get hit with a chargeback that effects our credit. And we the small business lose money since according to Visa, our Eventbrite page didn't have a separate terms and conditions button ... which Eventrbite doesn't seem to know or care about, since, although we are using their service and spending close to $500-$1000 a month on them, and have for three years, we are SOL since we don't use their payment processor. Thank you Eventbrite, I do hope your Cappucino maker in your SF loft office is working. Really. Anyway, this is just one day in the life of a small business owner, entrepreneur and job creator. It's only 1:30. Lots more fun to go today. Still have DC Sales and Tax, Pepco and Comcast to call regarding bills and accounts. Welcome to the compliance jungle.