Improper transaction processing procedures are the cause of most chargebacks where either the customer or the seller makes an error. Adequate training and attention to detail from the seller side can help prevent these chargebacks, mainly when the transaction is processed at the seller end.
Consider implementing the following best practices into your point-of-sale payment processing procedures to avoid the chargebacks:
- Do not complete a transaction if your authorization request was declined while making the transaction.
- Do not repeat the authorization request after receiving a decline, simply ask your customer for another form of payment.
- Do not estimate transaction amounts without fully compiling it on the system first. Calculate the correct amount using the system only and then proceed with the transaction.
- In the case of restaurant merchants, you should authorize transactions only for the known amount on the check; you should not add on a tip.
- If you receive a “Call” message in response to an authorization request, do not accept the transaction until you have called your merchant services provider’s authorization center. In such instances, be prepared to answer questions. The operator may ask to speak with the cardholder. If the transaction is approved, write the authorization code on the sales receipt. If declined, ask your customer for another form of payment.
- Do not accept a card after its expiration date unless you obtain an authorization approval for the transaction.
- Whenever you must key-enter a transaction to complete a card-present sale, you should make an imprint of the front of the card on the sales receipt, using a manual imprinter. Even if the transaction is authorized and the cardholder signs the receipt, the transaction may still be charged back to you if the receipt does not have an imprint of the embossed account number and expiration date.
- The cardholder’s signature is required for all card-present transactions. Failure to obtain the cardholder’s signature could result in a chargeback if the cardholder later denies authorizing or participating in the transaction. Merchants should always compare the first letter and spelling of the surname on the sales receipt with the signature on the card. If they are not the same, you should ask for additional identification or make a Code 10 call.
- Some payment cards have a digitized cardholder signature on the front of the card, in addition to the hand-written signature on the signature panel on the back. Be advised that checking the digitized signature is not sufficient for completing a transaction. Sales staff must always compare the customer’s signature on the sales receipt with the hand-written signature in the signature panel.
- If the cardholder is present and has the account number but not the card, the merchant should not accept the payment. Even with an authorization approval, the transaction can be charged back to you if it turns out to be fraudulent.
- Merchants must ensure that the transaction information on the sales receipt is complete, accurate, and legible before completing a sale. An illegible receipt, or an illegible copy of a receipt, may be returned because it cannot be processed properly.
- There have been reports of sales-receipt stock bearing a statement near the signature area that the cardholder waives the right to charge the transaction back to the merchant. Merchants should be advised that such receipts do not protect businesses against chargebacks. They are prohibited by the credit card associations.
All the above guidelines will surely help in avoiding the chargebacks at the point of sale, thus ensuring a better running of the business.
