{"id":12576,"date":"2016-04-25T10:03:32","date_gmt":"2016-04-25T16:03:32","guid":{"rendered":"https:\/\/www.barcodesinc.com\/news\/?p=12576"},"modified":"2019-09-06T12:30:56","modified_gmt":"2019-09-06T18:30:56","slug":"dont-let-emv-chargebacks-cut-into-your-profits","status":"publish","type":"post","link":"https:\/\/www.barcodesinc.com\/news\/dont-let-emv-chargebacks-cut-into-your-profits\/","title":{"rendered":"Don\u00e2\u20ac\u2122t Let EMV Chargebacks Cut into Your Profits"},"content":{"rendered":"
\n
\n
\n
\n

\"Avoid-EMV-Chargebacks\"<\/a>With EMV<\/a> in full swing in the U.S., chargebacks have been on the rise – especially for restaurateurs. Following a successful co-hosted webinar with National Restaurant Association on the basics of chargeback management and best practices last month, we discovered a second installment was in high demand.<\/p>\n

The webinar took a deeper dive into the rules of EMV and chargebacks and what you can do to avoid them. If you weren\u00e2\u20ac\u2122t able to join us for the presentation, we\u00e2\u20ac\u2122ve summarized the high points here to help you better understand chargebacks and the liability shift.<\/p>\n

Why EMV, Why Now?<\/strong><\/p>\n

Protecting yourself against counterfeit fraud is one of the main benefits to implement EMV because it\u00e2\u20ac\u2122s virtually impossible to recreate the chip. The October 1, 2015 shift has caused some serious headaches, but the ultimate goal is to fix the payment ecosystem by heightening card security. There is, however, a glitch\u00e2\u20ac\u201dif your equipment isn\u00e2\u20ac\u2122t EMV-compatible, then use of a fraudulent EMV card can go undetected.<\/p>\n


\nHere\u00e2\u20ac\u2122s how it works: Fraudsters take the magnetic stripe<\/a> information from a stolen EMV card and create a non-EMV forgery. However, the magnetic stripe information still identifies the card as EMV. If one of these forged cards is presented and swiped on an EMV-enabled terminal, the magnetic stripe data tells the terminal that this is an EMV card and notifies the cashier to dip the card in the EMV slot. The cashier would then attempt to dip the card and notice the absence of the chip. Fraud averted. With an EMV reader, fraud is virtually impossible unless your terminal tells you to override and swipe\u00e2\u20ac\u201dwhich would then put the liability on the issuing bank.<\/p>\n

EMV cards also decrease the chance of a data breach before hackers can get into your system and steal card information to make fraudulent cards. Chip cards store data in a more sophisticated, secure way than the magnetic stripe. If a hacker broke into your business\u00e2\u20ac\u2122s EMV-enabled system, they would only obtain an encrypted version of the data\u00e2\u20ac\u201dcompletely useless to fraudsters. The U.S. was the last developed country to adopt EMV. But the alarming rise of fraud in this country made implementation essential. Other countries have seen a decrease in fraud since EMV\u00e2\u20ac\u2122s arrival.<\/p>\n

Disputes\u00e2\u20ac\u201dWhat\u00e2\u20ac\u2122s Different After October 1, 2015?<\/strong><\/p>\n

EMV has designated dispute codes. The kind of fraud that EMV solves has always existed, but most merchants weren\u00e2\u20ac\u2122t aware because it was the responsibility of the card issuer. Now the party with the least secure technology is liable, so merchants are seeing more of these codes on their chargeback statements. If a merchant doesn\u00e2\u20ac\u2122t have a working EMV reader, then they can\u00e2\u20ac\u2122t dispute a chargeback that appears under this code\u00e2\u20ac\u201deven if the merchant has evidence the customer was present.<\/p>\n

Another issue is \u00e2\u20ac\u0153friendly fraud\u00e2\u20ac\u009d\u00e2\u20ac\u201dalso called chargeback fraud. In this instance, customers fraudulently use the chargeback process to secure a refund. Consumers illegitimately dispute a transaction with the bank instead of contacting the merchant for a refund. In short, there\u00e2\u20ac\u2122s nothing \u00e2\u20ac\u0153friendly\u00e2\u20ac\u009d about this type of fraud.<\/p>\n

In addition, friendly fraud is very difficult to prove. A few ways to protect your business include requiring a signature for goods delivered to your customers, asking for the credit card verification code or creating\/participating in a blacklist database that tracks customers frequently getting refunds on purchases.<\/p>\n

Chargeback Trends<\/strong><\/p>\n

The tidal wave of chargebacks has been occurring across all types of markets and states, but there are a few industries and regions that have been the hardest hit since the liability shift.<\/p>\n

Top Merchant Categories:<\/strong><\/p>\n