How are we protected against charge backs from the customer?

[AmorAdor]

I'm in the process of starting my business and I will be selling products. However, I know that the retail world can be a cruel place full of charge backs. So I just want to know how does square protect us from charge backs and frozen accounts? Any tips, advice or steps I should take to protect my self?

[byjane]

That’s a great question. Because sometimes I feel like Square protects the customer more than the retailer. I have had a customer come in and buy a consumable product.  We checked his ID, he signed the slip.and a receipt was sent to him.  He later disputed the charge and square took the full amount out without even asking for proof.  If this is the protocol- I may become a cash only business 

[VanKalkerFarms · Accepted solution]

Chargebacks suck but it is a day to day part of running a business that accepts credit cards, depending on your business type and amount of transactions you may get one a day, one a week, one a month, one a year, or even less frequent.  (Personal note, we have had 2 chargebacks in 150,000 transactions so basically a rounding error for us but that may not be the case for your business).    A very important part of chargebacks to learn is that your payment processor, be it Square or PayPal or First Data, doesn't have a say in whether the charge is legitimate.  That is all determined by the credit card issuing bank, and your payment processor simply passes on the information that you have about the transaction in question to them.  Square (or any other payment processor) Does Not make the decision, that is solely decided by the purchaser's card company.

Here is about Square's Chargeback resolution steps https://squareup.com/help/us/en/article/3882-resolving-payment-disputes

Square's best practices for card acceptance . https://squareup.com/help/us/en/article/5079

Here is a good article on "FRIENDLY FRAUD" https://chargebacks911.com/chargeback-fraud/

[Stylesbycrystal]

Are you utilizing the chip reader for your transactions bc from my understanding that added protection on your side. Once that chip is present there shouldn’t be a place for dispute but correct me if I’m wrong 

[katieand]

Thanks for chiming in, @Stylesbycrystal! You're right that using the chip reader to dip cards adds protection on your side from chargebacks. Here's some information on the EMV Liability Shift around chip cards. 

You as the merchant are less liable than just swiping the card since you've gone through the process of using the chip technology. However, customers can still protest charges after you've utilized the "dip."

[KayMandi23EXP]

We recently had a dispute using the card reader and signature. Square doesn't seem to care about the business but the consumer. 

[KayMandi23EXP]

agreed