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Education

Addressing pain points actions and sending in paperwork.

While the card brand rules do not stipulate the need for • Chargebacks: These disputes cost $25 to $35 each,
itemized receipts, card issuers request them anyway. plus lost sales revenue and the time involved in put-
Clearly, tipping should reward, not punish, merchants ting all the paperwork together.
and sales associates for a job well done. Here are some
recommendations for addressing these pain points: • Overage on tips: These are crazy. The merchant loses
• Issuers: To stop the rising tide of chargebacks, card a chargeback for $40 tip—the tip money has already
been paid to the staff—the chargeback fee is $25 to
issuers need to be more open minded and not im- $35. That equates to a $70 loss, plus time for an em-
mediately side with cardholders, especially when it ployee to send in the paperwork.
comes to chip cards. When banks see an EMV chip
card transaction, they can send a retrieval request. Sadly, business owners lose the majority of chargebacks,
And if a cardholder leaves a big tip, send a text mes- according to recent reports. Some are $50, $100 or go into
sage to the cardholder to confirm the tip was inten- thousands of dollars, even though the card used in the
tional. transaction was an EMV contact or contactless chip card
• Merchants: To stop unnecessary chargebacks, mer- in a card-present and proper face-to-face sale.
chants need to pay more attention to chargeback let-
ters and act promptly to specifically address all the Merchants are only winning 30 to 40 percent of these
claims in the letter and provide an itemized receipt. scams. Friendly fraud at card-present merchants is out of
Small retail stores and restaurants frequently lose control. It's high time for the card brands to treat merchants
chargebacks because they are not able to retrieve re- with the integrity and respect they deserve.
ceipts within the very short window in which they
need to respond.
Allen Kopelman, a serial entrepreneur is co-founder and CEO of
Here are a few examples of costs to business owners: Nationwide Payment Systems Inc. and host of B2B Vault: The Payment
Technology podcast. Email him at allen@npsbank.com and con-
• Retrieval requests: These simple inquiries cost $10 to nect on LinkedIn https://www.linkedin.com/in/allenkopelman/ and
$15 each, plus valuable time spent looking up trans- Twitter @AllenKopelman.

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