The EMV liability shift, which took place in fall 2015, was designed to make payment processing more secure. The change shifted responsibility for fraudulent transactions from the banks to the merchants, if the merchants aren’t using EMV-ready technology. Since the conversion to EMV technology, the number of EMV chargebacks for card-present transactions has risen 50%, according to Digital Transactions Magazine. Although there isn’t a clear reason why this number has skyrocketed, there are several ways you can protect your restaurant.
Take action when you receive an EMV chargeback
The clock starts ticking when you’re notified that an EMV chargeback has been filed, so act fast. You’ve got 45 days to respond to Visa, MasterCard and Discover, but only 20 for American Express.
Be proactive, not reactive. Here are some tips to follow to protect yourself from chargebacks.
- Spot counterfeit cards: Train your staff to recognize counterfeit credit cards. Check every card for flat looking hologram stickers, a damaged magnetic stripe that makes it difficult to swipe or a suspicious looking signature strip.
- Process chip cards as chip transactions: You are only protected if you process an EMV chip card in an EMV-ready terminal. You are liable if you swipe or key in a chip card at the terminal, so ask for another form of payment if the card isn’t working.
- Swipe non-chip cards through the terminal: You can’t use an EMV-enabled reader for a card with no chip. Banks issued new chip credit cards in preparation for the shift, so if someone hands you a card with no chip, proceed with caution and check to make sure it’s not counterfeit. Only non-chip cards can be swiped at the terminal.
- Don’t force it: If a card is declined, don’t swipe it again or try to override the decline. Ask for another card or a different form of payment.
- Match the last 4 digits: When presenting the customer with the receipt, take a few extra seconds and make sure the last 4 numbers on the card match the number that was charged.
- Verify the signature: Check the signature on the card to make sure it matches the sales slip or electronic signature. People sometimes forget to sign the back of a new credit card or the signature fades, so ask for a photo ID and make sure the names match.
- Take an imprint: Even the best technology fails us sometimes. If you must key in the number or do a manual entry transaction, check the card’s expiration date and make an imprint for your records.
- How are you being notified of chargebacks? Ask how your credit card processor is notifying you of chargebacks. It’s important to ask how they notify merchants–email, fax, online message center or letter–about chargebacks and choose the method that’s the most convenient for you.
Upgrade to an EMV terminal
Your restaurant is only on the hook for fraud involving EMV chip cards, so savvy thieves are targeting businesses that aren’t using compliant terminals. Don’t give away free meals unintentionally–the best way to avoid an EMV chargeback is to upgrade your technology.
Although EMV chargebacks are part of doing business, these disputes can add up quickly for a restaurant. Respond to chargebacks quickly and train employees on the do’s and don’ts of payments. EMV isn’t a perfect science, but when the kinks are worked out, restaurants and their customers will appreciate a more secure checkout.
To learn more about integrated EMV and point of sale systems, contact Leebro POS today.