Why you need a chip card reader.
Now that Sip. Shop. Eat! has been doing more business (Yay!) we've encountered the perils of charge backs and unfortunately had to learn the hard lesson of protecting ourselves against them.
You'd think that in our line of business we wouldn't have to encounter such experiences. Especially when 100% of our customers knowingly and willfully purchase our products. Yet, in the words of Square- "where there's purchases, there's charge-backs." You'd be surprised how many people will claim they have no idea where a charge came from.
Of course, cash is king. If you want to close the sale you better be taking cards this day and age. There are new laws that govern card processing and with fraud on the rise- it's all for good reason. Banks basically won't even consider a merchants argument about a dispute if/when a chip-card reader is not the method of payment.
We recently accepted a card payment totaling a whopping $5.00. The customer disputed the charge reporting they had no idea where the charge came from. We keyed in the credit card credentials and required a signature. Clearly this person knew where the charge came from. Yet, the bank honored their dispute and returned the $5.00 to the customer all because a chip reader wasn't the method of payment.
Luckily, this charge back was covered by our square dispute resolution coverage- which means WE didn't actually have to return the money to the customer, our friends at Square did.
However, for big ticket items (over $250.00, especially) we didn't get so lucky. This was a much bigger fight of course. Our advice in this circumstance, is to always have the customer sign for the purchase and do your due diligence to ensure the customer is aware of your store policies. There are several ways in which you can do this:
- Including a contract for signature
- Including an overview of your policy on customer invoice
- Including an overview of your policies in a confirmation email and in any shipments to customers
Of course all of the above can still be challenged. Which is why we advise that you keep records of your communication with customers.
It seems like a lot but consider yourself warned.
We've outlined some best practices for accepting payments:
1. Cash is KING
2. If you accept cards:
- Verify identity
- Ensure that the customer is aware of and understands your policies
- Require a signature for all purchases
- Send a Receipt
- Always use your chip reader
- NEVER EVER KEY in a card entry- it's also more expensive for you the merchant
Now, I pray you never have to experience the horrors of charge-backs but if you do. Be prepared to fight for your rights :) Unless of course you don't want the headache.
You can purchase a chip card reader online from Square or at any Best Buy or even on Amazon. They're about $30.00 and worth every penny.