Two weeks ago we wrote about how to dispute incorrect and fraudulent transactions on your own statement. This week we want to talk about how to avoid card holders disputing transactions at your business. Below are 5 simple ways your business can avoid chargebacks.
1. Check ID
Visa, MasterCard, Discover and American Express all recommend that merchants check ID for credit card transactions. By checking ID, you can prevent use of stolen and fraudulent cards at your location. If you process transactions with a high probability of chargebacks, checking ID is a must. Please note, while you may ask for an ID to verify the identity of the cardholder, it is illegal in California to record any personally identifiable information from their ID as part of the credit card transaction.
2. Verify Signatures
Most credit card transactions require the cardholder to sign in order to authorize the sale. It is a good idea for merchants to verify the signature on the back of the card with the signature on the receipt. If a credit card is not signed, you as the merchant have the right to refuse the card or ask them to sign it.
3. Look for Suspicious Activity
Often, people’s buying habits and mannerisms are fairly consistent. If you see something come through that seems out of character for a customer, or buying high ticket volume or items, it may be worth taking extra precaution to verify the person is who they say they are. New customers purchasing expensive items may be using stolen credit cards.
4. Use EMV Whenever Possible
With EMV it is a lot harder to copy the card data. The use of EMV technology is meant to greatly reduce card present fraud, and when used appropriately, is very effective. While EMV may not prevent a person using a stolen card, it will prevent the use of a duplicate card. By verifying ID and signature with EMV card present fraud can be reduced to almost nothing.
5. Use a Credit Card Authorization Form
If you take cards for large purchases, it may be a good idea to have a signed Credit Card Authorization Form. An authorization form is a document that proves the cardholder verified the transaction and has agreed to pay the amount due. It will often discourage erroneous chargebacks and provides documentation of the cardholders participation in the transaction. For an example of a Credit Card Authorization form email us at [email protected]
These five tips, when implemented, can greatly reduce the likelihood of fraud, and thereby reduce the probability of a chargeback. Fraud is costly at all levels of the payment cycle, and failure to prevent fraud can often have negative effects on the merchant. By being proactive, merchants can avoid many mistakes and pitfalls associated with credit card fraud.
The Agapay Team