You need to accept credit cards in order to meet your customers’ payment needs. However, chargebacks can be a difficult and costly aspect of running your business.
In a nutshell, chargebacks are reversals of credit card transactions, which are made by a customer’s credit card company. They’re typically made by the credit card holder who contacts the card’s issuing bank to dispute specific transactions.
Read on to find out how merchant services can protect your business from them.
Follow the Proper Protocol
When it comes to accepting credit cards, every credit card processor has its own protocol to follow. However, for purchases made in person, having rules and regulations in place can add additional protection.
Checking the expiry date on credit cards and entering in the security code, which appears on the front or back of the card, are other measures you can take.
The Address Verification Service (AVS) is another important aspect to keep in mind. It’s used to confirm whether or not the address provided by the customer matches the billing address, which appears on file for the cardholder.
Ensure Your Payment Descriptor Is Clear
One of the reasons chargebacks occur, which trigger those all-too-familiar disputes we know in business, is unclear payment descriptors. Essentially, your payment descriptor is your business’ name, which appears on your customers’ credit card statements following a purchase from you.
If you’re unambiguous and use a name your customers might fail to recognize, such as a parent company name rather than your store’s specific brand name, the customer might not remember the purchase. Merchant services, which represent various businesses, must ensure their payment descriptors will be clear and easily recognized by customers.
The Three-Digit Security Code
The three-digit security code appears on the back of all Visa and MasterCard credit cards. It’s also referred to as “Card Verification Value” (CVV or CVV2). It’s to the right side of the signature panel.
Embedded within is a coded check of the information, which is embossed on the card. Unlike what appears on the front, the code isn’t embossed, so card imprints won’t reveal the CVV code. This way, lost or stolen imprints won’t have this very important security information on them. Moreover, Payment Card Industry compliance doesn’t authorize the collection of this information. In the event a business’ data is ever compromised and credit card numbers and expiry dates are stolen, the CVV information won’t appear.
Similarly, the CVV information collected from customers during the checkout process can’t be stored. Since websites are prevented from storing the CVV code and imprinters can’t actually copy it, CVV code matches serve as another means to ensure the customer making a purchase on your website or over the phone is the actual cardholder.
For example, if a customer can readily provide a valid card number and expiry date, but stammers when asked for a valid CVV code, that’s a strong signal they may not have the actual card with them. Thus, it could possibly be a fraudulent transaction, and a red flag should be raised by the merchant services provider.
Essentially, merchant services can play a vital role in protecting your business from chargebacks. Working together, we must all remain vigilant and do our utmost to prevent them. As well, it’s a good idea to take stock of the chargebacks your business receives and to continuously evaluate the role merchant services play in fighting them. After all, another layer of protection will only help your business.