January '20

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16 THE SHOP JANUARY 2020 A chargeback is a refund that a cardholder requests from the bank that issued their credit or debit card. Chargebacks are typi- cally requested because a service or product was not received, the transaction was pro- cessed for the incorrect amount, or because the card was stolen or compromised. If you own or manage a business, these tips will help you understand chargebacks and how to prevent them. THE CHARGEBACK PROCESS When a cardholder files for a chargeback, the dispute is reviewed by an independent third party that determines if the money in question should stay with the merchant or be returned to the cardholder. Before a decision is made, the merchant will be given the opportunity to provide supporting documentation to prove that the transaction was legitimate. Disputed funds will be pulled from your bank account and placed in a holding account until the chargeback is resolved. In some cases, inability to access those funds can cause significant hardship. And, if a chargeback is lost, the disputed amount is lost as well. BEST PRACTICES While it's virtually impossible to prevent chargebacks completely, these tips will help you avoid situations that commonly lead to disputed transactions: Use an easily recognizable credit card descriptor. Your credit card descriptor is the name that appears on your customers' credit card statements. One of the biggest reasons for chargebacks? Customers just don't recog- nize the business name on their statement. Confirm that the name on your storefront or website matches what appears on bills and receipts. Make sure your processing solu- tion is EMV-compliant. The addi- tional security offered by EMV chip cards can help minimize fraudulent transactions, thus minimizing the possi- bility of a chargeback. When possible, dip or swipe cards. Keying in a card number manually for an in-person trans- action not only costs more, but is less secure, increasing the possibility of a chargeback. Require an AVS and CVV match for card-not-present transac- tions. If you're collecting payment over the phone or online, requiring an AVS (address information) and CVV (security code) match can drastically reduce fraudu- lent transactions. This information is a good indicator that the customer has the physical card in their possession. Ensure careful data entry. An extra digit when keying in a dollar amount is sure to grab a custom- er's attention for all the wrong reasons. Verbally double-checking the total with customers before processing a sale should be standard practice for your entire staff. Trust your instincts. A situation that seems too good to be true— like a customer placing a large order under odd circumstances—should prompt follow-up questions. Being obser- vant and reaching out about suspicious transactions can greatly reduce your charge- back exposure. BE PROACTIVE Friendly fraud, return fraud and true fraud in the form of chargebacks spike around the holiday season. If you don't have a chargeback prevention plan in place, now is the time to implement one. SHANNON WALCOTT is a senior sales execu- tive at BASYS Processing and has partnered with businesses in the automotive industry on their credit card processing since 2012. Shannon specializes in helping organizations securely accept credit and debit cards while reducing their processing expenses. She can be reached at (800) 386-0711 and swalcott@ While accepting credit and debit card transactions is extremely commonplace these days, there are still steps to take to avoid dealing with chargebacks. Preventing Chargebacks CREDIT CARD By Shannon Walcott Six ways to avoid costly mistakes.

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