Wednesday, May 6, 2015

10 Tips on Avoiding Chargebacks

Chargebacks are something all businesses try to avoid at all costs. Have too many chargebacks (as little as 1% of the total amount of your sales) and your merchant account might be terminated. That would mean you no longer could accept credit cards and that would hinder any business.

What is a chargeback?

There are a few possibilities for a chargeback but the most common cases are:

1) Customer is unhappy with the product or service they were given.

2) Customer is disputing the charge because it was never authorized (I never bought this!).

3) Clerical- Customer is double billed or billed incorrectly.

4) Insufficient funds.

There are variations of this theme such as the customer does not recognize the name of the biller (which is why you should always try to keep the name on the bill the same as the business type).

In most cases a customer can have up to 120 days (depending on the type of card) to chargeback a transaction and/or they have an issue with the product purchased.

10 tips to avoid chargebacks:

1) Avoid Clerical Errors

Make sure you are careful about the information you are using when billing the customer
Visa has some great tips here

2) Use Your Company Name on the Bill

If the customer does not recognize the name of the company for the charge they are more likely to charge it back due to fraud or unauthorized use.

3) Get a Contract

Basically make sure you have an agreement signed for the product or service you provide. 
If they signed off on it, it will be hard for them to dispute it.

4) Dispute it

If you think the chargeback is unfair or fraudulent it may be worth fighting (if you have time) and dispute it as each chargeback has a fee associated with it.

5) Protect yourself against fraud

Many companies won't ship out items if they don't match with the billing address or if the security code is wrong. They might then  contact the customer to verify the purchase is legitimate.

6) Don't Wait

If your company is notified about the chargeback it would be best to contact the customer right away and resolve any chargeback disputes.

7) Clarity

Be clear about the service or product you are selling! Don't lie or leave out things about your product or service as that is one way to almost guarantee the customer will chargeback.

8) Policies

Make sure you have clear return/refund policies stated on your website or store. This way there are no misunderstandings and you are less likely to have a dispute.

9) Call Me

Make sure the customer knows how to contact you. If your phone number is readily available on the bill the customer is more likely to call first then charge it back.

10) Set the right expectations

If you provide truthful expectations about your service or product you are less likely to have a dispute. A great example: Delivery dates or stock availability.

Wednesday, April 29, 2015

EMV Credit Card Machines

If you have a merchant account and especially if your have a credit card machine you may have heard about EMV technology. 

EMV stands for Europay, MasterCard and Visa, have developed new technology to increase security with regards to transactions.  As a result merchant's using credit card terminals not offering this technology will bear the responsibility of any fraud as of October 2015! EMV credit card terminals can be expensive and it would be smart not to get stuck with a lease where you usually end up paying 10-20 times what the credit card terminal is actually worth. There are processors that will offer free emv credit card machines. Most companies offering free credit card terminals may  have a contract so make sure the one you choose does not or you may get stuck with hidden fees. 

Here is some more information on EMV: 

The deadline is fast approaching for businesses to transition to EMV card technology. 


EMV cards contain a chip, in addition to the traditional magnetic strip, that is used to transmit data. Unlike standard magnetic card, EMV cards create a unique transaction code every time they are used. Each code can only be used once, making fraud more difficult and less likely to occur. 


Create Universal Standards EMV has been around since 1992 U.S. is one of the last to adopt the card technology Makes traveling and doing business overseas easier Increase Security U.S reported $11 billion in credit card fraud in 2013 (Almost half of the world’s credit card fraud) EMV can help protect both consumers and businesses Fraud losses for brick and mortar retailers dropped 60% in the UK after adopting EMV technology


EMV is a card-present technology that can be processed several ways.
Contactless Those individuals with NFC enabled cards (dual mode) can tap the card in front of a NFC enabled POS device and then provide either a PIN or signature. Chip & Pin Insert the card into a POS device which keeps the card until a PIN number is provided. (Most used worldwide) Chip & Signature Instead of providing a PIN to complete a purchase, this process just requires a signature. (Most likely to be implemented in the U.S.) Chip Only If a transaction is under a specific floor limit, neither PIN nor signature may be required.


Mark Your Calendar for October 2015 While each card payment brand (Visa/Mastercard/Discover/American Express) has their own unique description for the changes in liability, all agree that beginning in October 2015 when a fraudulent transaction occurs, whichever party (Merchant/Processor/Card Issuer) is the cause of the contact chip transaction not occurring will be held financially liable for any resulting card present counterfeit losses.

Responsibilities By the end of 2015, an estimated 70% of credit cards and 40% of debit cards in the U.S. will support EMV Merchants are responsible for having and EMV-compliant terminal Merchants are responsible for working with their Processor to ensure that the terminal is capable of accepting EMV transactions


When it comes to preparing your business for EMV adoption and standardization, the countdown is on. As a retailer, your first order of business should be the development of a detailed, time-sensitive EMV roadmap. Use it to outline the steps you'll take to be in compliance by the time October 2015 rolls around. By having everything upgraded and ready to go ahead of time, your business will be prepared to meet the requirements and ensure that you are not held liable for fraudulent transactions.