NOTICE A JUMP IN VISA AND MASTERCARD CHARGEBACKS?
EMV related chargebacks are surging due to the EMV liability shift on October 1st.
On many routine chargebacks, where prior to October 1st they would have been 100 percent protected by Visa and Mastercard, retailers are now shocked to find that no matter how strong their defense, it is an automatic loss of the chargeback if the EMV chip was not read. The Visa and Mastercard card issuing banks are leveraging the EMV liability shift to reduce their fraud burden every opportunity they can and if it is an EMV card that is in question, the easy and legal decision is to push the loss back to the retailers when the chip was not read.
Retailers who were lagging in EMV readiness are now seeing the true cost of not upgrading their software and hardware for EMV, especially if they have a high average ticket where lost chargebacks are especially painful.
Retailers that do not have the ability to read EMV cards will be most vulnerable to all the stolen and fraudulent cards that are circulating in the market. They will be the soft target for fraudsters, along with e-commerce. If any of those stolen cards are swiped and used successfully at a retail location, there is almost a 100% probability that sale will result in a lost chargeback to the retailer. Those are odds no retailer can afford to take.
If you would like more information on EMV readiness you can contact Michael Dattoma at Michael@retailmerchantservices.com.
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Hello Michael,
We upgraded our system before the Oct. deadline, but many cards
do not have the chip and we are having to swipe about
half the time. Do these sales put us at risk for charge backs
or does the new system automatically use extra precaution?
Kind Regards,
Tara Tucker
Lancaster York
Santa FE, NM
Since Michael apparently missed your message…. the answer is no – liability shift to the first weak link in the chain that doesn’t handle Chip (Card Issuing Bank, Merchant Processor, Merchant) If the customer’s issue bank doesn’t issue cards w/ the shift, liability is on them.