Don’t Let EMV Chargebacks Cut into Your Wallet


Is EMV important? Why do we need it now?

Protecting yourself against counterfeit fraud is one of the main benefits to implement EMV because it’s 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.

Chip cards store data in a more sophisticated, secure way than the magnetic stripe. If a hacker broke into your business’s EMV-enabled system, they would only obtain an encrypted version of the data—completely useless to fraudsters. Alarming rise of fraud was mostly reported in the U.S. other’s countries have seen a decrease in fraud since they accepted EMV. Since the U.S. accepted the EMV system frauds have become less common.

What Happened After October 1, 2015?

EMV has designated dispute codes. The kind of fraud that EMV solves has always existed, but most merchants weren’t 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. Some cases merchants that don’t have EMV reader, they think keeping all evidence they might have help them avoiding all charge backs may help them win the dispute but that are wrong. If the merchant does the have the required coding for EMV there is no way the merchant will be able to win.

A Chargeback is also known as “Friendly Charge”.  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’s nothing “friendly” about this type of fraud.

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 and or creating/participating in a blacklist database that tracks customers frequently getting refunds on purchases.


Most Common Risk Areas

  • TX , NY, CA, FL, IL, NJ
  • Large Cities/ Common Areas
  • Colleges
  • Foreign card / Border Areas

If you notice the same individual is using multiple cards, that should be a red flag. Keep your eye out for large orders. Many times, if fraudsters are going to steal they try to get away with the most expensive purchase. Fraudsters are stealing numbers and instead of making magnetic stripe credit cards, they’re making gift cards

Best Solutions If You Don’t Have EMV

If you decided not to update your equipment, here are some of the best practices and ways to identify counterfeit cards. Insure the receipt matches the card and verify the last four digits, expiration date and name. Also, compare the signature and facial features to the cardholder’s ID.

The safest bet to protect yourself from chargebacks is to upgrade to EMV. If you do have an EMV terminal, always process chip cards as chip transactions and swipe non-chip cards. If a card is declined, ask for another form of payment—do not re-swipe or override.

Ways A&B POS Solutions Protect You Warn You About “Friendly Charges”

  • Insures that reported cards are closed
  • Monitors for issuer/customer abuse and looks for patterns
  • Monitors for incomplete or incorrect disputes

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