With the advent of EMV—a smart chip-based technology that protects credit card issuers, holders and merchants against fraud—the processing of credit cards has changed in the United States.
Prior to EMV (which stands for Europay, Mastercard and
Visa), pizzeria owners and other merchants were usually
not held liable for accepting a stolen or fraudulent card.
Instead, the credit card issuer took the loss as part of
doing business. With EMV, the liability has shifted, and
we business owners can get stuck with the bill.
The more sophisticated credit card criminals use skim-
A GROWING PROBLEM
mers and trappers or hack into the databases of large
corporations to steal the information they need. They
rarely target a small business like an independent pizzeria,
but we do face a fraud threat that’s growing rapidly. If
you offer delivery, you must be familiar with the dreaded
merchant services chargeback. Before EMV went into
effect in October 2015, pizzeria owners stood a pretty
good chance of defending themselves against chargebacks
and keeping the money that was charged fraudulently.
With EMV, the credit card issuers have shifted liability
to the retailer. And that’s where things get complicated.
As owner/operator of Precinct Pizza, one of the nation’s
busiest pizza restaurants with a large delivery component,
I wrestled with this problem, like everyone else in the
business. After working closely with my POS provider, I
developed a solution to the delivery chargeback problem,
and I’m writing this article to share what I learned with
my fellow operators.
There are two ways to cover yourself against fraudulent
chargebacks. You must either make sure to get a carbon-copy imprint of the credit card or be able to prove the
order was delivered to the cardholder’s home address.
Getting the imprint is especially problematic. Sure, it
seems like it would be simple to tell your drivers to get
an imprint for every transaction, but this might frustrate
Sure, it seems like it would be simple to tell your drivers
to get [a credit card] imprint for every transaction, but this
might frustrate or insult your customers, who will get the
impression you don’t trust them.
—RICK DRURY, PRECINCT PIZZA
Employees at Precinct Pizza are trained
to ask their dial-in customers if they’re
prepared to show their credit cards
upon delivery of their pizzas.