CASE STUDY: “Money, Money, Money: Risk”


(This is a business case study. It will be used to guide discussions during the session: “Money, Money, Money: How the Paysite Pros do Billing – Risk” with co-hosts Mitch and Thierry of Vendo at the Paysite Meetup.)


Bill was reading a story in the New York Times about the latest conflict zone in the middle east and an idea struck him. The story detailed the strategy of the terrorist leadership of hiding out in hospitals. It was simple and effective. No government is going to launch an attack on the hospital.

The ratio was bad. You would eliminate 10 terrorists but kill 1,000 patients and staff. No general of any military would do that.

Bill’s insight was that the people who charged back on his site did exactly the same thing as the terrorists. They were bad people who could damage his company and they hid among the good people who paid for his service and kept his business alive.

If his only way to stop chargebacks was to get rid of all of his customers then he wouldn’t have a business. He had to find ways to identify the people who chargeback and eliminate them while removing as few good transactions as possible. How would he do that? “How can I do surgical strikes?” Bill wondered.

3 Questions:

  1. What is the right amount of risk?
  2. What are the main categories of risk?
  3. What factors influence risk?

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