New Chargeback Rule – this is a must read!

October 2016

A new rule from the Card Associations – they will NO Longer Accept photocopies of credit cards – You must do an Imprint – If you have a chargeback, you need to send in an imprint.emv-chargeback-idea

This is a new requirement because the card brands say that customers are filing law suits saying that this violates their privacy.

The other thing to note is – when you send in an Imprint – it is going to a fax machine and the faxes are not clear.

Make sure you are sending a clear imprint – if you need imprint slips and or an imprinter NPS can help you out.

 

Visa, MasterCard and American Express have made some temporary concessions on non-recourse chargebacks.

Keep in mind these rules are temporary and are not going to stop most chargebacks.

 

The biggest targets are businesses that accept credit cards and do not have EMV machines!

The hospitality industry still is the biggest target!

 

Visa’s Temporary Chargeback Policy Changes:
• Effective July 22, 2016, Visa will block all U.S. counterfeit fraud chargebacks under $25.
• Effective October 2016, issuers will also be limited to charging back 10 fraudulent counterfeit transactions per account, and will assume liability for all fraudulent transactions on the account thereafter.
• These blocks will stay in effect until April 2018.
Reason Code Affected: Visa Reason Code 62

MasterCard’s Temporary Chargeback Policy Changes:
• The MasterCard network now has checks and blocks to ensure that chargebacks follow the liability shift guidelines.
• MasterCard has policies in place that limit merchant exposure to excessive chargebacks on fraudulent accounts.
Reason Code Affected: MasterCard Reason Code 4870 and Reason Code 4871

Amex’s Temporary Chargeback Policy Changes:
• Beginning the end of August 2016, merchants will not be liable for counterfeit fraud chargebacks under $25.
• Beginning the end of 2016, Amex will limit the number of counterfeit fraud chargebacks to 10 per card account.
• Above changes will remain in effect until April 2018.
Chargeback Reason Code Effected: American Express Reason Code F30

What do these changes mean and how do they affect my business?

The card companies are only making some small concessions, and there is nothing really in place to make sure the guidelines are followed.

Chargebacks under $25 only are being absorbed by Visa and American Express so if you get one from Discover or MasterCard you will still lose – if you do get a chargeback under $25 from Visa or Amex – contact your bankcard rep to help you apply the correct rules

 

Do I still have to upgrade to EMV in my business?

Yes you will still need to upgrade to EMV, right now less than 50% of businesses have up graded (sept 20th 2016) about 4 months ago it was less than 40% – what that means is that as more businesses around you get EMV the fraudsters will have less places to go and if you do not have EMV your business will be a bigger target

 

Will the chargebacks stop?

Not until you upgrade to EMV! 

EMV is required for all merchants that process credit cards and merchants who have ATM machines!

If you need help with upgrading to EMV – we offer many products and consulting services.