How can I recognize suspicious customer behavior
Be alert for the customer who:
- Makes indiscriminate purchases without regard to size, style, color, or price
- Makes purchases, leaves the establishment, and returns to make additional purchases
- Hurries you to complete the sale at closing time
- Refuses free delivery for large items
Credit Card Security Features
What to look for on the Visa card:
- Look at the dove hologram. It should appear to be three-dimensional and to move when you tilt the card.
- Check the four-digit printed number above or below the first four embossed numbers. They must match.
- Check the embossing on the Visa card for clarity and evenness
- Look for the special embossed "V"
- Look at the signature panel. The panel should have the repeated word "Visa" printed at an angle in blue or blue and yellow letters on a white background.
What to look for on a MasterCard:
- Look at the double globe hologram. It should appear to be three-dimensional and to move when you tilt the card.
- Check the four-digit printed number below the embossed account number. It should match the first four digits of the account number.
- Check the embossing on the MasterCard for clarity and evenness
- Check the "Valid Dates"
- Look for the unique embossed letter "M"
- Look at the signature panel. The MasterCard name should be repeated.
Other Fraud Protection Measures
- Always verify that the signature belongs to the presenter
- Do not accept any cards which have not been signed
- Your terminal should prompt you to enter the last four digits of the account number to verify that the account number on the magnetic stripe is correct or your terminal may display the entire card number for comparison to that on the front of the card. If your terminal does not prompt for this, call the terminal help desk and ask for this feature.
What to do if you are suspicious about a card or the cardholder
Call the voice authorization center and request a "Code 10" authorization. By saying "I have a 'Code 10' authorization," you put the center on alert without letting the customer know you are suspicious. They will give you further instructions.
What is a Chargeback?
A "chargeback" is a dispute usually originated by a customer or the customer's credit card issuing bank and subsequently debited to the merchant's deposit account. A chargeback to the merchant may occur when a cardholder does not recognize the transaction or disputes the following:
- Participation in the transaction or sale
- Performance and/or quality of the merchandise or services
- Delivery of the merchandise and/or services
- Breach of any term, condition, representation, and warranty of the transaction
- Amount of the charge
Top 10 Costliest Chargebacks
#1. Failure of merchant to respond to retrieval request
This is the single most frequent cause of chargebacks. Fortunately, this is often the easiest to prevent. Simply keep copies of your sales transactions and respond to any and all "Media" or Retrieval,” requests by sending copies of sales drafts immediately.
Card issuers are responsible for initiating copy requests. Usually they are initiated to resolve billing disputes or to comply with a subpoena. Fulfilling copy requests is very important. When requests are not fulfilled within the prescribed time period, they almost always result in a chargeback. A chargeback for not responding to a copy request is non-reversible per Visa/MasterCard regulations. So it is in your best interest to respond quickly to copy requests.
#2. Cardholder was billed more than once for the same transaction
To avoid duplicate processing, reconcile your batches daily and ensure that the register/terminal totals match the credit card receipts for the day. If you do receive a legitimate duplicate processing chargeback, do not issue a direct credit to the cardholder - the credit will automatically be applied.
#3. Cardholder denies making or authorizing a transaction
Make sure all transactions (other than mail/phone order) are magnetically swiped or imprinted. Again, timely submission of a copy of the properly completed and signed sales slip along with a written explanation of the validity of the charge will be needed to try to reverse a chargeback. If the disputed transaction is a phone or mail order sale, the order form and signed delivery receipt from any courier or handler will also be required.
#4. Failure of merchant to follow correct procedures in completing the sales slip at the point-of-sale
The sales slip must include both a cardholder signature and the card account number to be valid. The account number must be obtained directly from an imprint of the card itself or from electronically reading the magnetic stripe. Manually entering the account number does not protect you from a no-imprint chargeback even if the sales slip is signed.
#5. Account numbers don't match
After swiping a card, if the card number displayed does not match the number embossed on the face of the card, ask for a different form of payment. Always print and double-check the account number on all phone and mail orders. Accepting non-matching transactions will leave you vulnerable to chargebacks.
#6. A credit or refund was not properly processed
Credits must be processed correctly and on time. Make your customers aware of your credit/refund policy at the time of purchase. Have the policy printed on your sales slips directly above the cardholder's signature in accordance with Association policy. Issue credits only to the same account numbers to which the sales were made - refunds paid in cash or merchandise, or to a different account number, will not protect you from this type of chargeback.
#7. Failure to obtain proper authorization
Be sure to authorize all transactions, and accurately record the approval code on the sales slip. If your request for authorization is declined, do not attempt to re-authorize transactions to the same account number, as subsequent approval may not protect you from a chargeback.
#8. A card was used either before or after its valid date
Never process a transaction on a card prior to, or after, the valid date. Instead, ask for a different form of payment.
#9. Merchandise or service not received by cardholder
Sales transactions must not be processed prior to delivery of the product purchased. Proof of delivery, signed by the cardholder, should be obtained for every credit card transaction in which the merchandise or service is not delivered immediately at the point-of-sale. Such proof of delivery may be your only defense if a chargeback occurs.
#10. Cardholder disputes quality of merchandise or services
Ensure that your customers are aware of your return policy at the time of purchase. Stick to your policy. Display the policy at the point-of-sale and print it on your sales slips, directly above the cardholder signature.
