Relationship & Responsibilities.
As your Merchant Service Provider (MSP), it’s Dharma’s job to ensure that your accounts are registered with the card brands, and to help you accept payments with as little risk as possible. Ultimately, the risk of payment acceptance is your responsibility, but we provide the tools you need to safely and securely accept credit card payments.
Let’s use the example of purchasing a car. When you buy a car, it’s the dealership’s responsibility to sell you the car and ensure that the car safely meets all regulatory standards. It’s their job to help you find the right car, learn the maintenance schedule, and help you make future repairs if something goes wrong. But, it’s not their responsibility to teach you how to drive, or to prevent tickets/accidents! It’s similar with your Merchant account: when opening your account with Dharma, we’ve done our diligence to confirm your business’ validity and provide you access to fraud prevention tools and best practices, but it’s not our responsibility to ensure every sale accepted through the merchant account is valid. (Although, we do our best!)
Just like cash/check acceptance, there are no guarantees. Cash can be stolen, both by employees and by customers. Checks can bounce, if written by a nefarious customer. The same uncertainty exists with credit cards. There are no guarantees that the card you accepted wasn’t stolen from the original cardholder. Similarly, a legitimate customer could choose to dispute a valid/legitimate sale – for no good reason! Unfortunately, this is all part and parcel of the world of business; there are no guarantees when it comes to getting paid. Credit cards provide an amazing convenience to us, as merchants, but it’s easy to forget that credit cards all carry a big perk – consumer protection. Part of the role of the credit card is to ensure that the legitimate cardholder is protected in a dispute/fraud environment. So as the merchant who accepts credit cards, you’re holding the inherent risk that any card you accept could potentially be fraudulent, or disputed at a later date.
You may be asking: What can I do to ensure the integrity of my transactions? How do I protect myself against fraud and customer disputes? Here are several best practices:
- All merchants should review their daily sales, and ensure that the totals match their bank deposits regularly. The sooner Dharma is alerted about discrepancies, the faster we can investigate!
- Online/keyed merchants: be sure to review and set your fraud filters accordingly. Card Testing (read more here) can be very costly, but is avoidable. Always keep an eye on all daily transactions.
- Post clear/obvious return policies. It’s always cheaper to refund a sale, instead of dealing with a chargeback. If you do get a chargeback, respond quickly to the written request, and include documentation outlining why you’re in the right.
- Trust your gut. Don’t ship orders to customers who haven’t been verified, and be very wary of international sales. Use AVS (learn more here), and if you have doubts, you should pass on the sale.
- Treat your credit card data like you treat cash! Verify that your customers are who they say they are by checking addresses and security codes. Treat credit card data with extreme caution. Employees shouldn’t have access to full cardholder numbers (as it’s a fraud risk). Any sensitive data should be behind lock/key, or in a tokenized online gateway to prevent potential data mishandling.