Melanie Stout

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About Melanie Stout

Melanie Stout began her career at Synapse Group nearly 20 years ago, blazing the trail for continuous service magazine subscriptions. After Synapse Group, she successfully built and launched the first direct-to-consumer recurring revenue stream at Prior to PLC, Melanie was Vice President of Marketing and Communications for a SaaS-based healthcare IT company. She has combined her knowledge of the subscription economy with B2C, B2B, and B2P marketing, to help companies of all sizes increase conversions, improve retention, and reduce operating costs. Melanie has participated as a panelist at the CNP Expo and as a moderator at the Subscription Insider event, Mastering Payment Processing for Recurring Revenue.

Discover’s New Excessive Chargeback Program

It looks like Discover is finally getting on board with the other major card brands for how they will measure merchants for the excessive chargeback program.  In the past, they have evaluated dispute dollars over net sales within a month, with the limit being over 2%.  Beginning October 13th, however, they will be monitoring chargeback transactions over net sales transactions within a month.  Similar to Visa, the maximum limit for Discover will be 1% and 100 chargebacks.

Here’s the major difference – there will be no monitoring and workout period with Discover’s excessive dispute program.  Each chargeback over the threshold will immediately incur a $25 fine.  Be sure to know where you stand with your Discover disputes!Discover Card

By | 2017-09-07T16:07:47+00:00 September 7th, 2017|Categories: Blog Post|Tags: , , , |0 Comments

The Impact of the AMEX Costco Shift on Approval Rates

It has been just over a month since all Costco branded American Express cards transferred to Citibank’s Visa portfolio.  The Costco cards accounted for about ten percent of all AMEX cards in the world, with most of those residing in the U.S.  The impact of the AMEX Costco shift can already be felt by many.

In the past, we have seen major portfolio shifts – USAA, the ninth largest issuer in the U.S., recently switched from MasterCard to Visa, e.g.  The AMEX Costco shift, however, is different.  Since American Express cards operate separately from the Visa/MasterCard network, they don’t participate in the same Account Updater pool, usually relied upon by recurring merchants to help get new card information and retain their subscription customers.

PLC reviewed the impact to our clients, and it wasn’t pretty.  The AMEX Costco cards became invalid on June 20th.  In looking at the data, we can see that the declines in the last ten days of the month brought down the overall AMEX approval rates to the lowest in at least 18 months, averaging about 18% lower than previous approval rates:

AMEX Approval Rates After Costco Shift

As we evaluate July data, we are seeing continued decreases in approval rates, with many of our merchants having July include their first renewal event since the portfolio change, rather than June.

This is one case where the only means of retaining these customers is by old-fashioned customer contact.  American Express did not identify a specified set of prefixes affected, nor did Costco allow these to participate in Account Updater, leaving merchants scrambling to reach out to their customers and request alternate methods of payment – much like recurring […]

By | 2016-07-25T20:53:33+00:00 July 25th, 2016|Categories: Blog Post|Tags: , , , , , |0 Comments

DHS and FBI Data Breach

As recently as a few weeks ago, we laid out predictions for payment trends in 2016 during a webinar with Subscription Insider.  One of the key areas of concern we outlined for 2016 that continues to plague us is security and, unfortunately, it looks like our predictions are being realized quite early in 2016.

The Backstory:
Data breaches come in many flavors and can include credit card data, health information, other personally identifiable information (PII), or more benign information including contact details.  Once exposed, credit card data can be sold on the black market, or criminals can use other PII to steal identities and open new credit card accounts in the process.

The Data Breach:
This week, the media is buzzing with the news of the Department of Homeland Security and the FBI being hacked by political activists.  The information compromised apparently contained directory listings of personnel, such as names, titles, email addresses, and phone numbers.  While the data leaked may not be damaging immediately, it can open the way for spear-phishing tactics to further compromise the systems at these government agencies.

What You Need to Do Now:
As breaches and hacks continue, we can expect regulations for security and protection of all data to become more stringent.  We should also be looking for new, improved methods of securing data – from credit cards to health information to personnel files.  As an e-commerce company, it’s more important than ever to ensure your systems are PCI compliant or better, and that your security is as tight as it can be so you can avoid being the subject of the next headline.  If you are unsure of your current status of compliance, contact your merchant processor immediately to get […]

By | 2016-02-09T20:07:44+00:00 February 9th, 2016|Categories: Blog Post|Tags: , , |0 Comments

New Visa Chargeback and Fraud Monitoring Rules

Effective January 1, 2016, Visa has changed their fraud (also called the RIS) and chargeback monitoring programs.  This may come as good news for some merchants who were worried about an increase in online fraud as EMV is rolled out across the U.S.  The chargeback side of the fence is essentially the same for domestic chargebacks, but now international rules will match those that have been in existence in the U.S. for some time.

So what’s new?  Merchants globally will enter the chargeback monitoring program if their ratio of chargebacks to sales reaches or exceeds one percent in a given month AND if the chargeback volume exceeds 100.

The fraud program has increased the allowable dollar amount threefold to $75,000 USD in fraud sales AND 1% ratio of fraud dollars to sales dollars within a month.  The ratio has been reduced, but the allowed dollar volume increase is substantial.

Visa chargeback and fraud rules

Also, rumor has it that any merchant who entered the program in Q4 of 2015 will be forgiven and able to start fresh with the new program in 2016.  Discuss this with your account manager at your merchant processor if applicable.  And if you reached the thresholds in December, sit back with a sigh of relief and focus on January.

By | 2016-01-07T17:38:44+00:00 January 7th, 2016|Categories: Blog Post|Tags: , , |0 Comments

EMV Card Reissuance Update

With only one week to go before the EMV liability shift takes effect on October 1, Visa has recently reported that only 18% of their 720M US cards have been reissued with the chip technology.  That means 590M more cards will be reissued for Visa alone within the coming months.  PLC’s clients have seen an increase in the volume of new expiration dates received by our merchants through account updater, to the tune of nearly double what they had been receiving the year prior.  Considering only 18% of Visa’s portfolio has been reissued, the risk to recurring merchants of losing large amounts of their customer base due to involuntary churn is massive.  On top of the incredible volume at risk, the old rules for updating expiration dates aren’t as effective these days.  Issuers have been changing the month as well as the year on some of the new chip cards.  The result – advancing the year on the expiration date before attempting an authorization is not as likely to be successful.

The key to retaining these customers is a multi-pronged approach, encapsulating all of the tools available to recurring merchants to help them crush the unnecessary churn.

By | 2015-09-24T20:22:09+00:00 September 24th, 2015|Categories: Blog Post|Tags: , |0 Comments

Data Breach Volumes in First Half 2015

In the first half of 2015, an astonishing 245,919,393 data records were compromised, either by being stolen or lost, according to a recent report by Gemalto.  Of those, 161,577,865 were breached from either the healthcare or government industries.  A full 80% of the incidents occurred in North America.  The next largest geographical region was Europe, coming in at only 10%.

For CNP merchants, the type of breach plays a role in the ensuing processing headaches.  With 53% of the breaches resulting in identity theft, merchants can expect to see either an increase in “potential fraud” declines upon authorization, or, as identity thieves are establishing credit cards in another’s name, they will eventually see a spike in “did not authorize” chargebacks.

One Day Event to Master Payments Processing

Come join PLC and Subscription Insider this October, 22nd in Boston for a one-day event to help recurring billing merchants master payments processing.  We will feature a keynote presentation by Paul Larsen, discussing the most current trends that are impacting your subscription business.  The rest of the day will include panel discussions from industry leaders and case studies highlighting what you can – and must – be doing to reduce involuntary churn and increase lifetime value of your customers.

PLC Clients will receive a special rate.

To register for this event, visit Subscription Insider.

Is EMV the Solution to Recurrent Data Breaches


There has been a recurring theme over the past 12 months as major retailers across the U.S. are continually hit with malware attacks to their POS systems, compromising tens of millions of credit and debit cards, costing consumers and the industry hundreds of millions of dollars.

Recurring merchants are especially hit hard. Adding to the normal 30% annual churn rate of credit cards, recurring merchants can expect significantly more accounts to be closed. Tools available to help combat churn include account updater from Visa and MasterCard, and updater program from Discover, and a comprehensive decline recycling strategy combined with well-timed submissions to account updater programs can save scores of subscription customers. However, it will add to the overall cost of processing and there will remain some fallout with those issuers who don’t participate in the updater programs. Businesses who are not employing those tactics stand to lose about half or more of their customer base.

Beyond the immediate impact of card reissuance, card-not-present merchants are at risk of experiencing increased fraud down the road. Why? The proposed solution that is moving forward – and being pushed into play by many retailers more quickly than the October 2015 Visa and MasterCard mandate – has proven to drive up fraud for online merchants. EMV cards (aka chip cards or smart cards) have been in existence in Europe for many years. Since their rollout in the EU in 2002, fraud in card-not-present channels increased by more than 100%. While offline fraud was reduced to almost nothing, the fraud itself did not decrease; it merely shifted to less secure channels. This same pattern has been seen everywhere EMV technology […]

By | 2014-10-21T15:05:42+00:00 October 21st, 2014|Categories: Blog Post|Tags: , , |0 Comments