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Beth Cox Report: August/September 2016

Dear Loyal Readers, Authors, and Publishers,

Time constraints delayed August's Beth Cox Report until it was no longer August, so I would like to celebrate the Midwest Book Review's 40th anniversary with the August/September 2016 Beth Cox Report!

I'll start by addressing a problem that particularly threatens people in the ebook writing and publishing business: chargeback fraud, also colloquially known as "friendly fraud".

Chargebacks occur when a consumer makes a credit card purchase, then requests a transaction reversal from the bank that issued their credit card. The bank refunds the consumer their money, and the merchant must pay a chargeback fee (which may be as high as $20 or more) in addition to the refund. Chargebacks can and do happen for legitimate reasons: for example, if a product the consumer bought was defective, and the merchant refused to issue a refund.

However, merchants can be hit with chargebacks even if they provide excellent customer service and did nothing wrong. If the credit card used to make the purchase was a stolen, the merchant still suffers the loss of the transaction plus the chargeback fee. But perhaps the most frustrating type of chargeback fraud is when the consumer deliberately keeps their purchase and demands a chargeback anyway.

Essentially, it's the same as having a thief steal a valuable item, only with the added insult of a chargeback fee and possible damage to the merchant's credit rating.

Merchants who sell physical items in person have a number of measures to protect themselves against chargeback fraud, such as requesting to see photo ID and recording a signature for credit card transactions. Online merchants are substantially more vulnerable. But the merchants at greatest risk are the ones who sell digital goods or services over the internet.

The sale and delivery of a physical item can be tracked. Ebay sellers are strongly encouraged to use a tracking number service when they mail purchased items. PayPal has a "Seller Protection Policy" designed to help sellers of physical goods in possible disputes. (There have been criticisms of PayPal's Seller Protection Policy, but those are beyond the scope of this Beth Cox Report).

However, PayPal's Seller Protection Policy does NOT apply to the online sale of any digital or intangible goods or services... such as copyediting services; web design services; digitally delivered computer software and video games; or ebooks. On PayPal's own website at

the requirements specifically state "The item must be a physical, tangible good that can be shipped."

Furthermore, PayPal is notorious for almost always siding with the buyer in chargeback disputes over intangible goods or services. If a fraudster buys your $5.00 ebook through PayPal, then hits you with a chargeback, you will very likely just have to pay the $5.00 plus the $20.00 chargeback fee.

If you sell through Amazon, it's also worth noting that Amazon's Payment Protection Policy does not cover digital goods, as described on their website at

"The transaction must be for the sale of physical goods, for example books, DVDs, etc. The Payment Protection Policy does not apply to transactions that include intangible goods, including services, digital content, or cash equivalents such as gift cards."

How can a small-scale independent in the ebook publishing world protect themselves from chargeback fraud? I wish I had a solid, helpful answer. I don't. All I have are few suggestions of limited use:

* Be especially wary of a vast multitude of transactions from one individual, or of particularly large transactions.

* The window for chargebacks can be up to 120 days, so to avoid an unexpected overdraft of your PayPal account, leave a monetary "cushion" in it. Don't count money for digital goods or services as money in your pocket until four months have passed.

* Chargebacks cannot be performed through a cryptocurrency such as Bitcoin. However, Bitcoin is an extremely impractical currency for the vast majority of merchants, and has its own liabilities. Most people do not own, accept, or use it.

* Some merchants use alternatives to PayPal with lower chargeback fees. But since PayPal is so widely used, abandoning PayPal completely can be disadvantageous.

* There are a number of business that specialize chargeback protection services on the Internet. If you decide to pursue this option, then do your vetting carefully - do a Google search and read customer testimonies, learn to what extent they protect against chargebacks for digital goods, etc.

One such chargeback-fraud-protection business is Signifyd. I cannot endorse them because I have no personal experience with them, but I would like to share their blog article of tips for "Detecting Fraud in Digital Goods":

and I'm designating their blog one of two Links of the Month

since it features an assortment of free, helpful articles for online merchants. The second Link of the Month is a website my aunt introduced me to, Medium

Medium describes itself as "a community of readers and writers offering unique perspectives on ideas big and small." My aunt shared three internet articles with me, two of which are from Medium, that will prove especially enlightening to authors and publishers:

"How I Wrote and Published My Novel Using Only Open Source Tools" by Gabriel Gambetta:

Gambetta also explains "How I Wrote My First Novel During My Daily Commute":

and in, "Self-Publish, Don't Write for a Publisher", author Jeff Geerling makes a compelling case for why self-publishing is almost always the best choice for a beginning author, and challenges publishers to convince him otherwise:

Time to wrap this up with a double header Book of the Month! The August 2016 selection analyzes the notorious and ongoing drinking water crisis in the city of Flint, Michigan:

Poison on Tap
By the Staff of Bridge Magazine
Edited by Bob Campbell
Mission Point Press
9781943995080 $19.95

The Flint, Michigan water crisis is the disastrous result of governmental mismanagement. When the city of Flint switched water sources to Flint River as a cost-cutting measure, the river water corroded Flint's lead pipes, contaminating Flint's drinking water with poisonous lead. This corrosion cannot be undone by switching back to Flint's old water source; Flint's drinking water will likely remain unfit for human consumption until all its river-damaged pipes are replaced, an expensive endeavor unlikely to be completed anytime soon. Worst of all, the government refused to admit that the visibly foul drinking water was hazardous to human health for over a year. Poison on Tap: A Bridge Magazine Analysis is an in-depth account of the extreme, arguably criminal governmental negligence and cover-up that destroyed the drinking water of Flint, Michigan residents and poisoned their children with lead. Chapters describe how state-appointed "emergency managers" made a foolish cost-cutting decision to switch their water supply, without consulting experts; how federal regulators failed to warn the public for months about lead in the water; and how a few brave heroes refused to let the status quo lie, fighting back and sounding the alarm. A handful of black-and-white photographs illustrate this "must-read", highly recommended especially for public and college library social issues shelves.

and the September 2016 Book of the Month recommends lifesaving policy changes to battle deadly fires:

I Can't Save You But I'll Die Trying
Dr. Burton A. Clark, EFO
Premium Press America
PO Box 58995, Nashville, TN 37205
9781887654579 $29.95

I Can't Save You But I'll Die Trying: The American Fire Culture challenges the status quo inherent in American culture that is getting both firefighters and civilians killed. Every year, 3,250 people in America die from fires. Changes in attitude and policy are desperately needed to reduce the death toll, but they are too slow in coming. "The NIOSH [National Institute for Occupational Safety and Health] line-of-duty death studies report that we [professional firefighters] do not follow our own safety SOPs, national standards, and training doctrine. We do not use our safety equipment. We do not hold firefighters, officers, or chiefs responsible and accountable when it comes to safety." I Can't Save You But I'll Die Trying addresses one example after another, and proposed ways to change fundamentally problematic behaviors. I Can't Save You But I'll Die Trying is highly recommended, especially for public library collections, and an absolute "must-read" for every volunteer or professional firefighter.

That's all for the August/September 2016 Beth Cox Report. I'll try my best to finish future Beth Cox Reports well before the end-of-month deadline!

Bethany Cox
Managing Editor
The Midwest Book Review

James A. Cox
Midwest Book Review
278 Orchard Drive
Oregon, WI 53575-1129
phone: 1-608-835-7937

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