A few weeks ago I was reviewing the credit card statement from a veterinarian’s office. I noticed, tucked into the last page a $130 chargeback on the account. So, I asked the vet what happened to cause the chargeback.
“What chargeback?” she asked.
So, I showed her the charge and I explained that a chargeback occurs when a customer disputes the charge and the merchant can’t prove that the customer (and the credit card) were involved in the transaction. I then asked her if she sent a copy of the signed slip to her credit card processor when the customer first challenged the charge. Apparently, she never got the request so she missed her opportunity to present her side and now she is out $130.
Okay, you may be asking what went wrong, as did she.
First of all, let’s be sure we understand how the process is supposed to work for a transaction where the customer/card are present (not mail order or telephone order).
1. A customer doesn’t recognize a charge on their account OR a customer is trying to avoid a charge on their account.
2. The customer contacts his/her bank (the one that issued the card – 800 # on the back of the card) and says they want to dispute the charge.
3. The issuing bank contacts the processor asking for proof of the transaction.
4. The processor asks the merchant for the “signed credit card slip” IF IT WAS A CARD SWIPED TRANSACTION! If it was a KEY ENTERED transaction (because the card reader couldn’t read the card) then you will be asked for the “manual imprint with signature”.
IF YOU DON’T HAVE A SIGNED SLIP FOR A CARD SWIPED TRANSACTION OR A MANUALLY IMPRINTED SLIP WITH A SIGNATURE FOR A KEY ENTERED TRANSACTION, YOU WON’T GET PAID!!!!!!!!!!
This is the biggest single failure among merchants for defending against chargebacks. The manual imprinter (see a photo at http://www.dabow-inc.com/webpics/dabow-inc%20website%20pictures/imprinters/4850%20imprinter.jpg ) is your only ally if the card’s magnetic strip is damaged and you have to manually enter the credit card number into your terminal (they only cost about $25 each so get one today). This is how you can prove the card was present when the charge occurred. Don’t bother with photocopies of cards or IDs, they may be helpful in a court of law but that is far more expensive than just getting paid the first time.
Assuming you provide the correct documentation in a timely manner, you will prevail and the chargeback will NOT be allowed.
So, what happened at the vet? First, the card wouldn’t swipe and they manually entered the number into the terminal and it went through just fine. No one trained the staff to take an imprint of the card (and they didn’t even own a manual imprinter). The pet died a few days later. The owner decided that the vet didn’t deserve to get paid and disputed the charge. What should have happened is that the processor should have contacted the vet and they claim to have mailed the notice to the vet. If that vet had been a Heartland customer, the local Relationship Manager would have received an email/notice of the chargeback request, the vet would have received an email and a mailed copy, and we would have ensured that the vet had the information to fight the chargeback. The outcome was a lost $130 because the salesman who sold tehm their credit card terminal either didn’t know or didn’t care about ensuring that the vet got all of her money all of the time.
Be sure to protect yourself against chargebacks!!
Email me with any questions about preventing chargebacks at
