Accepting Credit Cards

Do you need any type of insurance to protect yourself in case a purchase gets through that was made with a stolen card?


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2015-07-15 21:05:45
2015-07-15 21:05:45

Currently, there is no type of insurance available for merchants that will reimburse you for payments made with stolen credit cards. Therefore, it is the main concern of most merchants whether or not there will be a high incidence of fraud or chargebacks. Chargebacks are reversals against a sale that was credited to your account. For example, if the customer�s bank made an error, if there was a customer misunderstanding, or if a purchase was made with a stolen credit card, the cardholder�s bank will reverse the sale, and you, the merchant, will be required to provide proof that the goods and services in question were purchased by the customer, and that you provided them to the customer.

In a normal situation, actual products are considered to be much safer than services, because there is not as much wiggle room for the customer to dispute. Also, when a customer receives his purchased goods immediately, a credit card payment made for those goods is viewed as being less risky.

This risk of fraud and chargebacks is greatly dependant on the type of business you are operating and the type of credit card transactions that your company performs. Point-of-sale transactions, which allow you or the customer to swipe the credit card, require a customer signature. When you have a customer signature on file for a purchase, you have more insurance than if you generally accept �card absent� transactions, in which you accept credit card payments over the phone, by mail or over the Internet.


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