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Managing and Avoiding Payment Holds

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As a small business owner, cash flow is critical to your success, so understanding how to quickly deal with payment holds and how to avoid them is important. In this article, we will guide you through specific scenarios and provide best practices to avoid payment holds.

 

In order to have the best possible experience, we encourage you to read through this entire article.  If you are short on time and need some quick guidance, you can also click on the individual links below to jump to the areas that interest you the most.

 

Contents
How to Challenge a Chargeback

Good to Know - The Chargeback Process

Best Practices - How to Avoid/Reduce Chargebacks

When Should You Call Merchant Services?


How to Challenge a Chargeback 

Recall from our last article, that a chargeback is a transaction that has been disputed by the cardholder or card issuer. If you wish to challenge a chargeback, you must do so in a timely fashion because there is a brief window of opportunity. To assist us in disputing chargebacks on your behalf, please respond promptly and file the requested paperwork by the submission deadline.

Note: Even if you work with Intuit to successfully reverse a chargeback, you still need to pay a chargeback fee. The chargeback fee is not a penalty fee but a processing fee for handling the issue on your behalf.

 


Good to Know - The Chargeback Process

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Best Practices - How to Avoid/Reduce Chargebacks

 

Being EMV (Europay MasterCard Visa) compliant is the best protection against chargebacks. EMV chip cards contain microprocessors which provide stronger transaction security features and other application capabilities. Unlike magnetic stripe cards, the card chip creates a unique transaction code every time it is used for payment. This transaction code can only be used once.


Here are some additional ways to reduce chargebacks:

  1. Be clear about refund and return policies.  Make sure that the conditions of the sale are written on the receipt near the customer’s signature and that (s)he receives a copy of that receipt. Also display your refund and return policy near the register, in a place all your customers can see it.  It doesn't hurt to have cashiers explain your policy to customers at the time of the sale.

  2. Respond to retrieval request and chargeback letters as soon as possible. If you wish to dispute a customer's claim, all documents we request to resolve the issue should be sent by the date specified in the letter. Even if the customer is wrong, your failure to reply usually makes you liable for the funds.

  3. Collect CVC2 and CVV2 verification numbers. According to Visa this can reduce chargebacks and reduce any pass-through fees that may be charged when a credit card order is conducted. On the back of MasterCard, or most Visa and Discover credit cards, is a 3-digit security code located right after the credit card number. American Express cards have a 4-digit security code located on the front of the card just above the card holder's account number. Most online payment processors support entering security codes when processing credit card orders. This extra security measure helps protect you against fraud.

  4. Use the Address Verification System (AVS).  AVS checks to make sure that the address entered on an order form is the same as the address to which the card holder's billing statements are mailed. People using stolen card numbers usually don't enter the real card holder's billing address on an order form. Be cautious of orders with non-matching billing and shipping addresses. AVS only works with US addresses.

  5. Let customers know what name will appear on statements. Letting customers know the name that will appear on their credit card statement will avoid a lot of confusion.

  6. Watch out for orders using free e-mail addresses. Be wary of accepting orders from people who are using a free email address when ordering (i.e. Hotmail, Yahoo, etc.). People using free email are almost impossible to track so most fraudulent orders are made using free email addresses.

  7. Take an imprint of the credit card. In instances when a card's magnetic stripe is unreadable or for delivery orders, making an imprint of the card is proof that the card was present and should be kept with your records of the transaction.

  8. Collect signatures upon delivery. You can use carriers that require signatures for delivery and supply you with a copy. Always retain these in your records.

  9. Request a copy of identification and credit card. Always see identification for face-to-face transactions.

  10. Be cautious of orders from foreign countries. A large majority of fraudulent orders come from places like the Middle East, Asia, Africa and South America. Watch out for foreign customers who place orders for large amounts, or for several of the same expensive item, and/or insist on next-day shipping.

 

When Should You Call Merchant Services?

If you’ve submitted all of the requested paperwork for the initial payment hold and 2 business days have passed,
reach out to QuickBooks Payments or Merchant support_star.pngServices at 888-692-9559.

 

Version history
Revision #:
4 of 4
Last update:
‎10-10-2018 10:06 AM
Updated by:
 
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