How Your Business Can Avoid EMV Chargebacks


By Jaredd Galloway, ETA Certified Payments Professional


The hope of reducing fraud and loss was the intent when the U.S. payment card industry introduced the October 2015 EMV liability shift for merchants. The goal was to encourage merchants to adopt technology capable of processing the more secure EMV chip cards as a way to prevent and discourage counterfeit mag stripe cards from being used. However, the transition towards technology has been slower than expected. As a result, one major unintended consequence of the liability shift for some merchants has been a 50% increase in chargebacks for their card-present transactions.¹ There is a lot of speculation about was is causing the increase but one major concern is that consumers and cardholders are aware of the liability rules when their card is not processed with an EMV capable device. While it may not be the case in every scenario, here are a few ways you can prevent from becoming a victim of malicious card-present chargebacks:

1. Obtain an EMV chip card capable device

Sounds easy enough but many merchants are hesitant to use the technology. Some merchants feel they know their customers well enough that not using a chip card terminal is not a concern. Others simply do not want to invest the money in the technology despite many affordable or even free options available to them. Whatever the reason for not having the technology the best solution to avoid EMV chargebacks is to simply have a way to process them even if it is not your primary payment processing device.

2. Never swipe or manually enter an EMV chip card

If you have an EMV capable device you should always use the chip card reader, not exceptions! Some customers may tell you they are in a hurry or your staff may want the line to move quicker by swiping the cards. If the chip card reader is not used, you will be liable. Some devices, like the Clover Mini, are programmed to not allow swiping of a chip card.

3. If the chip card is declined, request a different form of payment

While it may be possible the processing system you have does not have functionality for that specific chip card, there is a possibility the card may be counterfeit. Do not swipe the card or override the transaction. Inform the cardholder to provide a different card or different form of payment. If you swipe the card, you are accepting liability and exposing yourself to a potential chargeback. In addition, consider a system like the Clover Mini which automatically updates every few days so you’ll always have the latest EMV certification

Ultimately the best way to protect your business is to implement best practices and policies surrounding the acceptance of EMV chip cards. Most importantly, the best way to protect your business is to acquire technology to process EMV cards. For some businesses, it only takes one loss to close your doors so don’t risk it, even if you think you know your customers well enough. With encryption and tokenization being the best ways to reduce or prevent fraudulent payment processing, the best equipment options to look for will have both EMV chip card and contactless NFC or Near Field Communication technology like the Clover Mini. By using the right technology, you can rest assured knowing your EMV transactions are being processed the right way from the start.

About the Author:

Jaredd Galloway is an Electronic Transaction Association Certified Payments Professional overseeing and providing merchant accounts for tens of thousands of small business owners since 2002.

1Kevin Woodward, (March 4, 2016). EMV Chargebacks Proving to Be a Card-Present Merchant Problem [Article]. Retrieved from

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