Every Restaurant Needs EMV to Protect Against Customer Fraud
If you have upgraded to a working EMV reader and are dipping EMV eligible cards then this Every Restaurant Needs EMV to Protect Against Customer Fraud post is not for YOU!
If you think your restaurant or bar is too small to get hacked, statistically the odds are in your favor that you probably will not be hacked, but that does not protect you from EMV customer fraud!
If you think you are safe from Credit Card Fraud because you don’t have a POS system, you are WRONG!
If you have not upgraded your credit card terminal or POS system to process EMV cards than this is for YOU!
Since the October 1, 2015 Liability Shift, new EMV dispute policies have been instituted. This change has created a tidal wave of chargebacks with restaurants, bars, quick service and petroleum being the top merchant categories for chargebacks!
If your business is located in the states of Texas, New York, California, Florida, Illinois or New Jersey you are in a high risk area. If you are in a large city, a highly populated area, a college town or take a lot of foreign credit cards you are also considered to be high risk.
AT RISK FOR WHAT? Counterfeit Fraud and Friendly Fraud Chargebacks, here’s what you need to know about these two types of chargebacks.
Counterfeit Fraud – This is one of the main benefits of EMV because it’s virtually impossible to recreate the chip. The EMV chip protects against the creation of a counterfeit EMV credit card, but you as the merchant must have a working EMV reader to know if it is a counterfeit card. No EMV dip, than you the merchant are automatically getting the chargeback in the case of a counterfeit EMV card used at your business!
Friendly Fraud – Also known as Chargeback Fraud is a bigger issue than counterfeit cards for non-EMV merchants. Every EMV card you accept that is not processed with an EMV reader could be a chargeback!
How is this possible? – Before October 1st of 2015, if a customer disputed their credit card purchase you had the opportunity to prove that the customer was present and approved the transaction. It took some time to research the transaction, but the chargeback was reversed, you were paid and the chargeback responsibility shifted to the card issuer.
Now, if your customer used an EMV credit card and you did not dip the card into a working EMV reader and your customer disputes the charge with their card issuing bank there is a completely different ending! If the merchant does not have a working EMV reader, then the merchant can’t dispute this chargeback even if the merchant has evidence the customer was present!
Example, Johnny uses Dad’s EMV credit card to purchase 20-pizzas from your restaurant and takes them to his friend’s party, you know Johnny and his Dad and appreciate the big order. When Dad gets his credit card statement he calls the card issuer and disputes the charge, since your restaurant did not process the charge with a working EMV reader you are chargedback with no option to dispute the chargeback!
Is this Fair? HECK NO…
What do you do to protect your business? Contact your merchant processor or POS provider and get updated to EMV, the sooner you can process EMV cards the better protected your business will be!
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