***Update***
The 2018 holiday shopping season is quickly approaching, and since Friday (and for some Thursday) is the official kick-off, we thought it would be a great time to republish some helpful fraud and chargeback reminders. These are some great things to keep in mind, and they’re as important this year as they were last year. Let us know if you have any questions! We’re here to help.
This post was originally published on 11/21/2017.
With the holiday shopping season upon us, it’s a good time to review some good practices in helping prevent your business from incurring losses from fraudulent transactions and chargebacks.
Face-to-Face Transactions
If the card presented for payment is not a chip card, always swipe the card. In the event of a Chargeback, this provides proof the card was present at the time of the transaction.
• If presented with a chip card and you have an EMV terminal, have your customer insert the card into the terminal and leave it there until the transaction is complete. (If you have not yet upgraded to an EMV Terminal, please contact your Relationship Manager at 800-704-7253.)
• Obtain an authorization number for the full amount of the transaction.
• If an authorization is declined, do not accept it, attempt to split it into smaller amounts, attempt to obtain authorization at a later time, or try to force it through. Any of these attempts may leave your business vulnerable to a chargeback loss. Instead, ask the customer for another payment method.
• Have your refund policy printed on the receipt directly above or below the cardholder signature line in letters ¼” high.
Internet or Phone Transactions (Card Not Present)
• Obtain an authorization number for the full amount of the transaction.
• If an authorization is declined, do not accept it, attempt to split it into smaller amounts, attempt to obtain authorization at a later time, or try to force it through. Any of these attempts may leave your business vulnerable to a chargeback loss. Instead, ask the customer for another payment method.
• Verify the cardholder’s address via Address Verification Service (AVS). The best AVS response is ”Y” for Yes or “Match”. This means the cardholder has given you the same address as the billing address for the card. If you are still uncertain about the transaction (e.g., large transaction, first time customer, splitting sale amount between cards, etc), you can call the issuing bank or the Voice Authorization Center.
• Ask the customer for the CVV/CVC Code on the back of their card (front for Amex). This is a 3 or 4-digit number that is now commonly used to help verify that the customer possesses the physical card. Most terminals prompt you for this information and will return a negative response if the number provided is not correct.
• Ship the merchandise to the AVS address and obtain signed proof of delivery or other method available from your shipper.
• Charge the cardholder’s account at the time the merchandise is shipped.
• Have your checkout page designed such that a customer must acknowledge your cancellation or refund policy. Be able to produce the acknowledgement in the event of a chargeback resulting from a refund dispute. Have a clear and concise refund policy.
NOTE: If a card is not present at the time of sale, a merchant cannot verify that the legitimate cardholder authorized the sale. The steps noted above may help minimize disputes and fraud, but they cannot guarantee avoidance of chargebacks. Card not present transactions are inherently more risky than those in which the card is present.
I hope this is a good reminder and something you might wish to review with your staff. If you have any concerns, give us a call at 800.704.7253 or click through to contact us.
Wishing you a very Happy Holiday season!
