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Don't Let Chargebacks Cut into Your Profits


Not EMV-compliant yet? Brace yourself for charge-backs.

The EMV liability shift had come and gone, yet 67% of US merchants are still not accepting EMV. If you are one of those merchants, it’s time to upgrade your terminals. Smart criminals will avoid businesses with upgraded equipment, making merchants using the old magnetic stripe terminals the likely target.

You may now be telling yourself:“So what? My bank is responsible for fraudulent transactions.” Nope, that’s not the case anymore. As of October 1st 2015, liability for those transactions has shifted to you (the merchant) if an EMV chip – enabled device isn’t used. In other words, if you are a merchant who has not upgraded yet, you will be financially liable if someone comes into your store and makes a purchase with a counterfeit debit or credit card. So, if there is fraud or a dispute involved, you will be eating it, not the bank.

Now you are probably thinking “No biggie, it will only happen a few times.” Unfortunately, that is not quite the case. One payment network has reported an increase of 50% in charge-backs for card-present transactions. This is not just affecting smaller retailers. U.S. merchants of all sizes have seen significant increases in charge-backs. According to Liz Garner, vice president of the Merchant Advisory Group, charge-backs are running $10,000 to $15,000 per week for some smaller merchants to as much as $1 million a week for some of the largest merchants.

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Now don’t go freaking out just yet. You can avoid charge-backs by simply processing transactions correctly at the time of the sale. Here are some tips:
  • Upgrade your credit card machine to an EMV chip card terminal
  • Check with your processor to see if they are ready and can certify proper installation
  • Always process chip cards as chip transactions (Never swipe or key in a chip card.)
  • Swipe non-chip cards through the terminal
  • If a card is declined, ask for another form of payment—do not re-swipe or override
  • Match the last four numbers on the slip
  • Request/verify the signature
  • For keyed/manual entry transactions, check the expiration date and make an imprint

Protect your business and your profits by upgrading to EMV-ready hardware.

Ready to get started? Get in touch with one of our EMV Experts.

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