CREDITCARD CENTER 

Needless to say, this is a time-consuming and potentially costly process for small businesses. Fortunately, you can take a number of actions to prevent or at least minimize chargebacks.  The first step is to make sure you fully comply with the transaction requirements issued annually by the major credit cards.

STEPS TO AVOID CHARGEBACKS
FACE-TO-FACE

1. Always swipe the card whenever possible; i.e., do not give up after one try.  If the card still does not read after 3 or 4 attempts, then try cleaning the track or wrapping it inside a plastic bag and then try swiping it through the card reader again.  If it still does not read, then ask your customer if he or she has a different card.  Only key in the card as a last resort.  This will keep your processing costs down as well as lower your chances of fraud incidence.

2. If the card is present and you are unable to swipe it through a terminal, or if there is no electronic printer, then obtain a manual imprint with signature, authorization code and other important transaction information, such as date, product and amount.

3. Verify that the number on your terminal screen matches the number on the card. And better yet, ask your processor to enable the "4-digit fraud detection" function in your terminal if it is not enabled already.  Sophisticated credit-card thieves switch the fronts and backs of credit cards, so comparing what the magnetic strip reads against the numbers on the front of the card will significantly reduce your chances of accepting a 'doctored' card.

4. If the transaction is for a large ticket item (over $100), or if you suspect fraud, insist on obtaining a photo I.D. from the customer. Compare the name and signature on the photo I.D. with the name and signature on the credit card--don't forget to verify that the customer in front of you is the same person as in the photograph.  If the card is unsigned, then always ask for a second piece of identification and also, insist that the customer signs the card before accepting the transaction.

5. Always check the expiration date on the card.

6. Have your return/refund policy clearly stated on your Website. Make it a requirement that customers read the policy before their order can be processed. In a retail environment, make sure the return policy
is clearly stated on the receipt. If the policy is no returns, you may want to put something like "All Sales Final."

7. If you have a retail store, ask to see the customer's drivers license. Compare this to the name on the card and the signature on the card. This can potentially reduce the use of stolen credit cards and the chargebacks that come with stolen credit card fraud.

8. Use a clear DBA (Doing Business As) name that customers will recognize. Vague corporate names that do not accurately describe what your company might do or sell will only confuse customers when they review their billing statements. An unrecognized DBA name on billing statements is one of the most common causes of chargebacks.

9. Put your phone number on your customers' statements. If they do not recognize your DBA, they can call you to find out who you are and why you charged them.

10. Be wary of orders with domestic billing addresses and foreign shipping addresses. They are usually fraudulent.

11. Verify the customer's address. It is possible to verify the customer's name, address and phone number with the card-issuing bank. By calling the Voice Authorization Center for address verification, you can verify the address and also provide proof that you verified the address.

12. Obtain authorization for the full amount of the sale. Declined transactions should not be accepted or split into smaller amounts.

13. Some disputes are not the result of unauthorized credit card use. Rather, they start because the customer disputes the quality of the goods or services purchased. The best way to avoid this type of chargeback is to work closely with the customer to establish a mutually satisfactory solution.

14. Keep all copies of your receipts and sales drafts for at least 2 years. File them away at your business. This way if you ever receive a chargeback dispute notification, you will be able to submit the signed sales draft with the dispute.

15. Charge the customer's account at the time the goods are shipped. If you know there will be a delay in delivery, wait to process your customer's credit card.

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