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Online business attracts more buyers each year. The internet has become a way to eliminate the costly overhead associated with retail store fronts. Internet sales are expected to rise by as much as 11 percent in 2009. With a greater number of merchandise being sold on the internet, businesses are more susceptible to fraud and chargebacks. There are ways to protect your profits in uncertain times.

Chargebacks were created as a form of protection for the consumer. The Federal Reserve created regulations guaranteeing card holders the right to a reversal. Various bank networks have their own corresponding rules. Initially, it would seem that a merchant would be more likely to provide quality products and speedy shipping if they had a threat of a chargeback or even having their merchant account turned off, however these rules are extremely one sided.

Continue reading "Are Chargebacks Fair Play or Fraud?"

Most businesses seem to think that an old fashioned knuckle buster is not needed. Most merchants don’t want to purchase a manual imprinter, but this decision can end up costing them more in the long run. There are situations in which an imprint of the card is required.

One example of such relates to non-swiped transactions. Manually keyed transactions typically occur when the magnetic reader on the card doesn’t work or if an order is taken over the telephone. Visa and MasterCard regulations require that a manual imprint of the card be taken whenever possible and that the cardholder signs the imprint. This will provide proof that the card was present during the time of sale or delivery.

Another example would be if there was an equipment failure. When this occurs, a manual imprint and voice authorization is required. During a voice authorization a transaction will be entered into the terminal as a “post authorization” with the 10-digit authorization number keyed, and the funds are reserved for 10 days.  If the transaction is never keyed into the terminal, then the transaction will never be processed. Again, keeping the signed manual imprint is your proof that the customer was present at the time of the sale.

Getting an imprint of the credit card in the above situation would assist greatly in the event of a dispute or a chargeback. Visa requires that merchants keep all sales receipts for up three years and MasterCard requires you to keep receipts for 180 days. When a Retrieval Request occurs, your sales imprint will come in handy. A Retrieval Request is when the cardholder’s bank requests a copy of your sales draft. If you obtained an imprint of the card, you will be better prepared. So next time you are asked if you need an old fashioned knuckle buster, your answer should be yes.

What’s a Chargeback?

A “chargeback” is more than a buzzword. A chargeback happens when a customer disputes a charge you’ve made on his or her credit or debit card. The chargeback usually happens after customers get their billing statement in the mail. And many times they’re quick on the draw – meaning they don’t call the merchant to try to figure out the problem before calling their bank. Continue reading "The Chargeback Cycle in Plain English"