Previously, the only time businesses received credit card chargebacks was when a customer was unhappy with a product or service. Most business owners have, understandably, never had a chargeback. It has always been understood that if you provide good service and quality products, your customers will be happy.
But times they are a-changin’! Banks are now issuing credit card chargebacks if they determine an issue with a transaction, even without your customer's consent. Now you’re probably thinking, “But how can banks get away with that?” Well, since the liability shift took place, there’s a new type of chargeback related to EMV transactions.
If you don’t handle EMV transactions correctly, then you’re at risk of encountering a bank chargeback. Your funds for the legitimate transaction will be withdrawn, letting your customers get your products and services for free. This is a huge issue for every business owner, so pay attention. Here are three payment practices that make you vulnerable:
If at this point you’re still thinking, “But in 25 years of business, I’ve never gotten a credit card chargeback,” then first, congratulations. However, your winning streak may come to an end if you don’t upgrade to an EMV-capable device. Effective chargeback prevention does require multiple layers of security, but embracing the new chip-based payment system will give your business a running start in the right direction. Survive the liability shift, beat the banks and don’t get hit with this new type of chargeback.
Have you been swiping chip cards because you don't have a chip terminal, or because your chip terminal is inactive? Tell us about your experience with chip cards and if you've ever had a bank chargeback in the comments section below!