Wednesday, May 6, 2015

10 Tips on Avoiding Chargebacks

Chargebacks are something all businesses try to avoid at all costs. Have too many chargebacks (as little as 1% of the total amount of your sales) and your merchant account might be terminated. That would mean you no longer could accept credit cards and that would hinder any business.

What is a chargeback?

There are a few possibilities for a chargeback but the most common cases are:

1) Customer is unhappy with the product or service they were given.

2) Customer is disputing the charge because it was never authorized (I never bought this!).

3) Clerical- Customer is double billed or billed incorrectly.

4) Insufficient funds.

There are variations of this theme such as the customer does not recognize the name of the biller (which is why you should always try to keep the name on the bill the same as the business type).

In most cases a customer can have up to 120 days (depending on the type of card) to chargeback a transaction and/or they have an issue with the product purchased.

10 tips to avoid chargebacks:


1) Avoid Clerical Errors

Make sure you are careful about the information you are using when billing the customer
Visa has some great tips here

2) Use Your Company Name on the Bill

If the customer does not recognize the name of the company for the charge they are more likely to charge it back due to fraud or unauthorized use.

3) Get a Contract

Basically make sure you have an agreement signed for the product or service you provide. 
If they signed off on it, it will be hard for them to dispute it.

4) Dispute it

If you think the chargeback is unfair or fraudulent it may be worth fighting (if you have time) and dispute it as each chargeback has a fee associated with it.

5) Protect yourself against fraud

Many companies won't ship out items if they don't match with the billing address or if the security code is wrong. They might then  contact the customer to verify the purchase is legitimate.

6) Don't Wait

If your company is notified about the chargeback it would be best to contact the customer right away and resolve any chargeback disputes.

7) Clarity

Be clear about the service or product you are selling! Don't lie or leave out things about your product or service as that is one way to almost guarantee the customer will chargeback.

8) Policies

Make sure you have clear return/refund policies stated on your website or store. This way there are no misunderstandings and you are less likely to have a dispute.

9) Call Me

Make sure the customer knows how to contact you. If your phone number is readily available on the bill the customer is more likely to call first then charge it back.

10) Set the right expectations

If you provide truthful expectations about your service or product you are less likely to have a dispute. A great example: Delivery dates or stock availability.

Wednesday, April 29, 2015

EMV Credit Card Machines

If you have a merchant account and especially if your have a credit card machine you may have heard about EMV technology. 



EMV stands for Europay, MasterCard and Visa, have developed new technology to increase security with regards to transactions.  As a result merchant's using credit card terminals not offering this technology will bear the responsibility of any fraud as of October 2015! EMV credit card terminals can be expensive and it would be smart not to get stuck with a lease where you usually end up paying 10-20 times what the credit card terminal is actually worth. There are processors that will offer free emv credit card machines. Most companies offering free credit card terminals may  have a contract so make sure the one you choose does not or you may get stuck with hidden fees. 

Here is some more information on EMV: 

The deadline is fast approaching for businesses to transition to EMV card technology. 

WHAT IS EMV?

EMV cards contain a chip, in addition to the traditional magnetic strip, that is used to transmit data. Unlike standard magnetic card, EMV cards create a unique transaction code every time they are used. Each code can only be used once, making fraud more difficult and less likely to occur. 

WHAT IS THE PURPOSE OF EMV?

Create Universal Standards EMV has been around since 1992 U.S. is one of the last to adopt the card technology Makes traveling and doing business overseas easier Increase Security U.S reported $11 billion in credit card fraud in 2013 (Almost half of the world’s credit card fraud) EMV can help protect both consumers and businesses Fraud losses for brick and mortar retailers dropped 60% in the UK after adopting EMV technology

HOW TO PROCESS EMV TRANSACTIONS

EMV is a card-present technology that can be processed several ways.
Contactless Those individuals with NFC enabled cards (dual mode) can tap the card in front of a NFC enabled POS device and then provide either a PIN or signature. Chip & Pin Insert the card into a POS device which keeps the card until a PIN number is provided. (Most used worldwide) Chip & Signature Instead of providing a PIN to complete a purchase, this process just requires a signature. (Most likely to be implemented in the U.S.) Chip Only If a transaction is under a specific floor limit, neither PIN nor signature may be required.

UNDERSTANDING THE FRAUD LIABILITY SHIFT

Mark Your Calendar for October 2015 While each card payment brand (Visa/Mastercard/Discover/American Express) has their own unique description for the changes in liability, all agree that beginning in October 2015 when a fraudulent transaction occurs, whichever party (Merchant/Processor/Card Issuer) is the cause of the contact chip transaction not occurring will be held financially liable for any resulting card present counterfeit losses.

Responsibilities By the end of 2015, an estimated 70% of credit cards and 40% of debit cards in the U.S. will support EMV Merchants are responsible for having and EMV-compliant terminal Merchants are responsible for working with their Processor to ensure that the terminal is capable of accepting EMV transactions

PREPARING YOUR BUSINESS FOR EMV

When it comes to preparing your business for EMV adoption and standardization, the countdown is on. As a retailer, your first order of business should be the development of a detailed, time-sensitive EMV roadmap. Use it to outline the steps you'll take to be in compliance by the time October 2015 rolls around. By having everything upgraded and ready to go ahead of time, your business will be prepared to meet the requirements and ensure that you are not held liable for fraudulent transactions.



Sources

http://www.cardfellow.com/blog/emv-smartcards-ready-or-not-here-they-come/ 
http://www.foxbusiness.com/personal-finance/2014/07/10/8-faqs-about-new-emv-credit-cards/ http://www.nilsonreport.com/publication_chart_and_graphs_archive.php 
http://www.smartcardalliance.org/publications-card-payments-roadmap-in-the-us/ 
http://myfw.com/2014/06/18/emv-changing-way-business/ 
https://www.javelinstrategy.com/brochure/314
http://www.cardhub.com/edu/credit-debit-card-fraud-statistics/

Tuesday, January 14, 2014

Many companies getting ripped off in 2014

It's 2014 and businesses are getting in gear for the new year. The problem is that many companies don't even realize how much they are "actually" paying for credit card processing. The merchants statements provided by most processors are designed with one thing in mind: to fool you. They are afraid that once you realize what you are truly paying, you will go elsewhere. This is why so many processors will attempt to lock you into a contract, usually for 3 years. I have seen companies like Bank of America charge non-qualified cards (business credit cards) at 14% and the business had no idea! The important thing is first, never sign a contract (say it again, this time with feeling). The second thing is, find out if your processor is  hitting you up with hidden fees. Starting the new year is a good time to reassess your bills and make sure you are not overpaying for services. For many, merchant services should be the first place you look to for savings. On average Prestige Merchant Services has saved companies 20-50% off their current monthly merchant service bill. Unlike other processors, they will give it to you straight and if you actually have a great deal they will tell you there is no need to switch (unless you are getting crummy customer service, in which case you probably should). If you want to make sure you are not overpaying on merchant services and like the idea of possibly saving thousands for the upcoming year, get a merchant statement and contact a reputable merchant service provider for better rates. They have professionals that can make sense of those difficult-to-read merchant statements that usually will give a forensic accountant a big headache.

Monday, October 14, 2013

High Risk Credit Card Processing- Not Easy to Find!

Most companies can find it difficult to get approved for a merchant account if they fall into the category of High Risk. Many processors are unwilling to deal with companies that deal with firearms, travel, e-cigarette, tobacco, Adult products, weight loss, ticket sales, debt consolidation, TMF, dating websites, credit repair, collection agencies and more! You may have trouble finding a reputable company that won't treat you fairly until now. For High Risk Credit Card Processing you can contact Prestige Merchant Services. They handle the highest risk merchant accounts so if anyone can approve them, they can.

Sunday, March 10, 2013

Square UP Payment - Big Problems for Serious Businesses


Square is a mobile credit card system that took the wireless merchant service industry by storm with it's free swiper and no monthly fees. The questions is, are they the solution for anyone wanting to accept credit cards? The answer seems to be no.

Risk:

Square is not a bank but rather "money mover". As they don't require any credit check they can't truly asses your risk of going bankrupt. This then translates into longer time frames for deposits, usually several days to as much as several weeks. I have heard of merchants being told  they will have a 30 days freeze on their account due to their dollar amounts being larger
than what Square wanted to handle and other various possibilities.

Rates:

Square's rates may seem low as they have no monthly fees but their rates are much higher
than interchange rates and can be as much as 3.25% for keyed in. Many people have reported
that they have a tough time getting the swiper to work at times (hey it is free) and then have to key in and pay 3.25% which is much higher than the true interchange rate


BBB Report:

Although the BBB reports Square as an A- complaints are gaining to almost 500 complaints.

Customer Service: There is practically none when it comes to Square and it is reported that if you call it will probably  go to voice mail. Many customers complain about the swiper not working often. If you are serious about mobile credit card processing try going with a true mobile credit card processor.

Tuesday, October 16, 2012

Processor is Sued by Merchant over $28,000

I was not surprised to learn that EVO Merchant Services was sued by a plumbing business:


 GALVESTON – Parker & Pompa Inc. has filed suit against EVO Merchant Services LLC, Discovery Bank, Discover Financial Services and Do It Best Corp. in an effort to recover nearly $30,000 in back credit card payments. Recent court papers filed Oct. 8 in Galveston County Court at Law No. 2 explain that the defendants failed to remit $28,490.97 generated from Discover Card charges from the plaintiff’s customers from Oct. 7, 2008, through April 9, 2009. The suit shows the complainant, doing business as Ideal Plumbing Co., entered into a contract with EVO, doing business as Bank Card Depot Inc., which called on the former to submit information pertaining to Discover Card charges made in Galveston County during the special time period. In turn, according to the agreement, EVO promised to acquire and process the charges. Meanwhile, the plaintiff and Do It Best executed a contract to which the latter agreed to accept the funds released from the proceeds in question and place them in an account attributed to the complainant as well as disburse and forward the subject money to the former. EVO received written statements itemizing the dates and amounts of the aforementioned charges and forwarded the documentation to Discover Bank and Discover Financial Services, which supposedly processed the information and gave the amount in dispute to Do It Best, the suit states. Parker & Pompa alleges it did not get the $28,490.97, insisting the defendants “have failed and refused, and continue to fail and refuse” to pay. Attorney Michael L. Wilson with Rider & Wilson in Galveston is representing the complainant, and Galveston County Court at Law No. 2 Judge Barbara Roberts is presiding over the case. Cause No. 68,458


Evo has many complaints listed against it. I happen to know they have some of the most corrupt practices
when it comes to hidden fees and padding their pockets.


Friday, June 8, 2012

VeriFone Copying Square's User Agreement?

It's really pathetic when an established company like VeriFone attempts to steal it's user agreement almost word-for-word from it's competitor. When VeriFone was notified of this copyright infringement they took quick action to modify it and shaved down their user agreement quite a bit. As per Gigaom:

“When we said that Square made it easy to swipe, we meant credit cards,” said Square spokesperson Aaron Zamost. Sean Kane, a member of law firm Pillsbury’s social media, entertainment and technology team, said a company caught copying another firm’s legal user agreements or terms of service could be sued for copyright infringement. But that is rarely pursued when it comes to terms of service and user agreements. It is still an issue, said Kane, because companies who copy a user agreement or TOS could be accused of fraud if their service actually differs from the user document. That could be a problem now for VeriFone, which now has a slimmed-down user agreement that doesn't address many key points about the service.