How To Avoid Chargebacks And Associated Penalties

The Risks Are Higher When accepting credit card payments when you can’t connect over the phone or internet Than With Face To Face Transactions.

The best way to avoid the risk of a chargeback in this case would be to get an imprint of the card to at least prove that you had the card in hand. The EMV chip cards that came out many years ago have been a huge help from the standpoint of fraud. Fraudsters weren’t able to duplicate the magnetic strips. The EMV chip cards took away a huge portion of the fraud.

If you have to take that card and key the transaction in it’s usually a higher cost for you to accept that card because there is additional risk involved. In this case, even though it may be a face-to-face environment, you will be keying it in so it looks as if it was a transaction you took over the phone which is considered to be a higher risk type of transaction.

The Speed Of An Online Portal Helps Manage Chargebacks

We have an online portal that manages chargebacks. The key with chargebacks is being able to get that information as quickly as possible and responding right away. If it’s a fraud situation it makes it 10 times harder and that’s why chargeback protection is so important.

When you have a chargeback the first response from the bank is – there was no card present, so we’re not liable for it. What we do is we actually verify the transaction, we make sure that transaction credit card being used in that purchase is a good card, the right card holder and being shipped to the right place. When you have all those things we would then give you our guarantee that in case you get a charge back you don’t have to worry, we’ll cover the charge back and we’ll take care of it so you don’t lose money. We guarantee it because we stand behind what we do.

It’s Still Important To Match The Cardholder’s Signature

The first thing that comes up when it comes to a chargeback is that they ask “Do you have the cardholder’s signature? Does the cardholder signature on the back of the card match up on the invoice?” A best practice is to have that in place that the customer signs the invoice with whatever legalities you have on your invoice in regards to returns and any other policies and conditions. Train your staff to look at the back of the credit card to make sure those signatures match up because that’s the first thing they look at when it comes to chargebacks.

Careless Digital Signatures Are An Opportunity For Fraud

When you check out now, often people are signing tablets. They generally don’t sign then the same way they would normally sign a check. If you are signing a tablet, you often just put a scribble down on there and you are done with it. This signature is always accepted so it’s certainly not going to match the signature on the back of the card.

If you’re signing a lot of tablets and it’s doing signature capture, this is a training issue that should be addressed and carefully considered when protecting the company against fraud.

Sometimes customers will simply draw a straight line across where the signature goes. It’s important to train your staff to preempt and ask the customer to please try to make the signature the same as what is shown on the back of the card. Then they’ll be a little bit cognizant of matching signatures and be more likely to try to do it correctly.

This is such an important topic for business owners to get a good understanding of. You can guard your profits and maintain control over your finances by being watchful and seeing any fraud red flags in your company. Knowing what to look for and how to act when suspicious behavior is observed is crucial. You can make sure that any fraudulent behavior won’t go unnoticed by putting the appropriate procedures and technologies in place.

Questions About Credit Card Fraud?
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  • Arthur Bergman

    Arthur Bergman, owner of Redstone Payment Solutions Nationwide, LLC, leverages 28 years of diverse payment processing experience. Starting as a hospitality director at a major hotel and restaurant chain, he mastered the intricacies of high-volume credit card transactions, igniting his entrepreneurial journey. Recognizing the need for improved payment processing, Arthur founded Redstone Payment Solutions Nationwide, LLC, anchored in client-centricity. Beyond merchant account setup and competitive rates, he prioritizes enduring relationships built on trust and unwavering support. Arthur's philosophy that "a sale isn't over after the close" drives RPSN, fostering confidence, referrals, and client loyalty. Under his leadership, the company not only expanded but sustained merchant relationships for up to 25 years. Believing in "Life as Art," Arthur considers each merchant's business their masterpiece. Redstone Payment Solutions Nationwide epitomizes his dedication, offering the lowest or no-fee processing. With a rich industry background and unwavering client commitment, Arthur Bergman thrives as a trusted figure in payment processing.