Chargebacks…the bane of many small to medium size businesses. Chargebacks have run rampant in the merchant processing industry. Many business owners feel helpless as the chargeback process has evolved into an unwinnable process to fight a form of fraudulent disputes. The best course of action? Prevention.

Definition

Before we get started, let’s look into what a dispute is. As defined by Visa:

A “dispute” provides an issuer (cardholder’s bank) with a way to return a disputed transaction. When a cardholder disputes a transaction, the issuer may request a detailed explanation of the problem from the cardholder. Once the issuer receives this information, the first step is to determine whether a dispute situation exists. There are many reasons for disputes—those reasons that may be of assistance in an investigation include the following:

Merchant failed to get an authorizationMerchant failed to obtain card imprint (electronic or manual)Merchant accepted an expired card

When a dispute right applies, the issuer sends the transaction back to the acquirer (Processor) and disputes the dollar amount of the disputed sale. The acquirer then researches the transaction. If the dispute is valid, the acquirer deducts the amount of the dispute from the merchant account and informs the merchant. Under certain circumstances, a merchant may respond to a dispute to its acquirer. If the merchant cannot remedy the dispute, it is the merchant’s loss.

PREVENTION

The best attack to the chargeback dilemma is prevention. There are steps business owners can take to make sure the issuer never advances the dispute beyond the cardholders request.

• The best form of prevention…EMV. EMV is a global standard for credit and debit payment cards based on chip card technology. This makes credit card virtually impossible to reproduce eliminating the claims of fraudulent transactions. This eliminates the vast majority of fraudulent disputes as it proves the card used was a legitimate card. A merchant’s POS company or merchant processor should have simple EMV solutions that can be installed rather quickly.

• Merchants can also prevent chargebacks by collecting the right information at the time of sale. It is important that the correct signature is captured matching the customer’s ID. In a fast paced environment, especially with small ticket items, it is unrealistic to check every transaction against the customer’s ID. However, for larger items, say a catering order, it is important to compare signatures on the customer’s ID to the credit card slip and even make a copy of the license.

• Another method to avoiding chargebacks is to train employees to identify the high risk indicators. Merchant should teach employees to verify signatures on large orders and manually keyed transactions, make sure invoices and delivery receipts are signed, and look for suspicious transactions (i.e.- leaving an abnormally large tip that can be disputed in the future).

• Lastly, merchants should always deal with customer complaints promptly. More times than not, a merchant can avoid a dispute by settling the manner before the cardholder calls the bank. It is important that all servicers are delivered to the customer’s expectations. If not, deal with the issue up front and try to resolve it before it gets to the issuer.

FIGHTING CHARGEBACKS

Before a merchant fights a chargeback, it is good to understand the “Dispute Life Cycle”. Below is Visa’s diagram outlining the steps a chargeback process:

Below are some common dispute categories that can be initiated by the cardholder:

Knowing this information can help merchants take the proper steps when fighting a chargeback. In addition, the following steps might also help during the dispute process:

• Act fast. The sooner a merchant can dispute a chargeback the more time they have to counter any rejection.

• If available, use a chargeback managing software. Many processors offer a tool that can provide the merchant with a faster notification and easier claim submissions.

• Provide as much documentation as possible when handling a dispute. Some merchants even go as far as providing a written outline of the services provided to backup their documentation.

• Merchants should ask their local merchant processor provider for help. Merchant process providers want to see their merchants happy and avoiding chargebacks is a sure fire way to do so. Merchants should take advantage of the merchant processor’s knowledge and contacts to push disputes through.

Unfortunately, chargebacks have become “a part of the business”, but merchants can limit the damage by following the steps needed to prevent and fight this headache.

For more information on handling chargebacks and additional ways to avoid them, please email info@boldpay.io.

**source: https://usa.visa.com/dam/VCOM/download/merchants/chargeback-management-guidelines-for-visa-merchants.pdf

Selecting the merchant processor that’s best for your business is not an easy task. Too many merchants fall into the trap of simply looking for the provider with the lowest quote only to find themselves paying more after exposing hidden processing fees. Over time, this can turn into a very expensive mistake.

So, what makes the difference? When looking for a merchant processor, you want a company that has a firmly established track record of reliability—one that can easily be integrated into your current POS environment, is strong, secure, competitive, and has a commitment to customer service. Do not get too focused on what numbers are on your quote – it’s the overall total cost over time that matters. This includes processing rates, time spent dealing with unknowledgeable support staff, and excessive pricing on equipment.

Aside from pricing, not all merchant accounts provide the same level of service when it comes to supporting your POS. You should always choose a merchant service provider willing to work with your point-of-sale company to make sure your issues quickly get resolved. It is too common for merchant processors to hand the merchant off to the POS company without making an effort to truly understand the issue.

As many processors try to “catch up”, BOLD has lead the industry in their support, pricing, and understanding of the POS industry. BOLD is not simply a merchant processor. BOLD. works closely with point-of-sale companies to resolve issues with some of the fastest resolution times in the industry. It is what they call “They Priority Advantage” which also includes:

• Support That Works WITH your POS company, Not Against. The BOLD teams are dedicated to your business and financial goals. Customer service is more than just a catch phrase to us, and we strive to be the best in the industry.
• Hardware that meets the unique needs of your business. BOLD delivers the right type of equipment to work with the POS system and fit the merchant’s needs.
• Software that keeps track of your business so it can grow. Free Access to the MX Merchant™ Portal for Online Reporting, Email Invoicing, and Mobile Payments.
• Transparent, reasonable, and honest. BOLD’s pledge is to be completely transparent with FAIR pricing and easy to read statements.
• Free PCI-DSS Assistance with ControlScan. BOLD provides the necessary support and tools needed to analyze, remediate, and validate PCI compliance.

Despite all the unscrupulous practices in the processing industry, BOLD is a company that offers high-quality service at a fair, reasonable cost. They offer same day approval and, in most cases, you can be running credit cards within hours.