Tami Cohorst, Abtek’s Vice President, was recently featured on Digital Transactions, an online business publication focusing on trends in the electronic exchange of value.
You may have heard the term, “friendly fraud.” It’s no surprise, then, that there’s nothing friendly about it. And it’s quickly becoming a major problem for merchants across the globe.
Friendly fraud, also called friendly-fraud chargebacks or cyber-shoplifting, occurs when a customer makes a purchase online and then files a dispute with his or her credit card company, claiming that the charge was fraudulent or that the product was never delivered.
Continue reading the full article on Digital Transactions →
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Today, the ability to process credit cards is essential for the success of any business, regardless of size. According to a Javelin study, approximately 66% of all in-store purchases are made with credit or debit cards–and that percentage is only expected to grow as more and more people move towards EMV and mobile payment solutions.
For so long, small businesses have been plagued with not being able to afford the charges associated with accepting credit cards, but today, there’s really no way around it. And while it may be tempting for small businesses to try to save a few bucks by not using a merchant service provider (MSP), it could end up costing you much more in chargebacks (and headaches!) in the long run.
Here’s a look at why your small business may benefit from utilizing the services provided by a MSP.
Does Your Business Really Need Merchant Services?
MSPs provide value added services, so businesses are not technically required to work with one. However, the benefits of working with an MSP often outweigh the costs. A few of the major advantages include:
- Keeping You Connected – Merchants can’t legally have a “direct” relationship with providers like Visa or MasterCard. That’s where MSPs come in handy. They help businesses stay connected with the credit card associations and help to keep communication flowing.
- Your Advocate Against Chargebacks – Most small businesses have to deal with chargebacks at some point or another, which can cause a lot of stress and lost profits. In the event of a chargeback, it’s critical for the business to react quickly. MSPs actively monitor account activity so that no wrongful chargebacks or errors slip through the cracks.
- Providing the Support You Need – Let’s be honest: Credit card processing can be really confusing. MSPs provide your business with the expertise and resources you need to navigate through the complex world of changing compliance rules and new technology.
Don’t Settle for Less: How to Select a Provider
MSPs come in all shapes and sizes, so it’s important for your business to select one that’s a good fit for your business. Here are a few things to consider:
- Longevity – Over the years, MSPs have gotten a bad rap for being rather “slimy,” but they’re not all bad guys. One of the best ways to be sure you’re working with a reputable company is to take a look at how long they’ve been in business. Frequent “restructuring” isn’t a good sign in this business.
- Accessibility – The only time you’ll probably need to call your MSP is when you run into a problem that needs to be fixed ASAP. A great MSP will have 24/7 live customer service available to walk you through the most frustrating credit card processing challenges.
- Top-of-the-Line Technology – In today’s super speed world, you’re going to want to work with an MSP that stays up-to-date on the latest payment processing technologies, especially with the EMV transition around the corner.
At the end of the day, merchant services providers can make credit card processing a whole lot easier for small businesses. They’re able to save you money by proactively managing chargebacks and fees, and keep the lines of communication open between the credit card companies and the businesses. As your small business grows and your credit card processing needs expand, an MSP can be there every step of the way to ensure a stress-free payment experience for you and your customers.
Stay updated on payment processing trends by following Abtek on Twitter and Facebook. Sign up to receive our newsletter, too.
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The holiday season has once again come to an end. Whether your customers used in-store credit card processing systems or visited your ecommerce site, you don’t want to see your holiday profits whittled away by subsequent chargebacks.
Common Reasons for Chargebacks
Before we discuss how to prevent chargebacks, let’s look at the most common reasons that chargebacks occur.
- Fraudulent card was used
- Cardholder disputes merchandise quality
- Incorrect amount was charged to the card
- Errors occurred during credit card processing
- Proper authorization wasn’t obtained
General Prevention Tips
Here are some general chargeback prevention tips that apply to merchants who accept online payments as well as swipe cards on POS systems.
- Be sure the customer recognizes the business name you give to your merchant services company. Many chargebacks occur because customers don’t recognize the business name that appears on their statement.
- Respond to retrieval requests in a timely manner. If you don’t respond within the number of days allowed in your merchant services agreement, it’s likely a chargeback will occur.
- Get an authorization 100 percent of the time. Failure to get an authorization will result a chargeback.
Prevention Tips for Swiped Cards
Following are tips that merchants who process cards through POS systems or mobile merchant accounts can follow to lessen the chance of a chargeback occurring.
- Swipe all cards through your credit card processing terminal. Doing so proves the card was presented at your store. If you have to get an imprint because your terminal is down, be sure all information appears: amount, business name, business location and signature.
- Always compare the signature to the back of the card. Understandably your cashiers want to get customers through their lines quickly, but it only takes a few extra seconds to check the signature. Your cashiers should check the signature against a photo ID if there’s no signature on the back of the card.
- Ask for another form of payment if the card is declined. Don’t continue to swipe the card.
- Make sure the number on the screen and the credit card number match.
- Get an authorization for the full sale amount – don’t break the sale amount into smaller amounts.
Prevention Tips for Online Businesses
Here are some helpful tips that online merchants can follow to prevent chargebacks.
- Make sure your customer is giving you the correct billing address by using the Address Verification System (AVS).
- Provide your merchant services company with a telephone number that it can print on your billing statement. This increases the likelihood that the customer will call you and determine what the purchase is before disputing it with their card issuer.
- Use shippers that provide proof of merchandise delivery to the full billing address. This will help you in case of a dispute. Require a signature for expensive merchandise to be left with the purchaser.
Stay up-to-date on payment processing trends by following Abtek on Twitter and Facebook. Sign up to receive our newsletter, too.
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