Charge Backs aghhh

I have had 3 chargebacks in last couple of months for a total cost of about $170.00.
Every chargeback we have had has been on a phone in order with the card keyed in. From the documentation with this one, I probably have another one coming since our name shows up twice on the accompanying documentation.
Would it be practical to add a $0.25 charge to phone-in delivery orders that wish to use a cc to pay?
Has anybody else on this site considered it? This would make the customers that insist on using cards compensate me for the exposure to risk.

I just started taking cards 18 months ago, and merchant fees are bad enough, without having to eat chargebacks and associated fees. At least I profit on bad checks, chargebacks are weighted against the merchant so you loose even if you win. Too many of my customers are used to cards now or I would toss the darn terminal into the parking lot.


Rick, give us an idea of your process. Do you take an imprint of the card when the food is given to the customer? Do you verify the calling number with call display? etc.

I have had only 1 charge back in 4 1/2 years and that was because the staff member did not follow the established process.

As for a charge to the customers check your merchant agreement some specifically forbid any extra charge to the customer.

I tihnk if you really look at it, it didn’t “cost” you $170 - just the food cost and the tip (if any).

There really isn’t anything you can do. You can develop elaborate security methods, etc., but you will still lose most (if not all) chargebacks.

I’m sure it depends on your area - and the amount of phone order/deliveries you do. You will hear people saying they haven’t had a chargeback in years, if ever. I have more than a few every month across 4 stores. It’s just the nature of the beast.

I don’t think it is a good idea to add a 25 cent surcharge - it’s also against your merchant agreement with Visa. Just not worth it.

Continue to take credit cards - attempt to stop fraud before you make the food - and everything after that just hope you don’t get that “special” envelope in the mail…

Totally agree here. I also would add that I just don’t think elaborate security measures are worth the time, effort and training. Slowing down deliveries with such measures costs you money. Good paying customers don’t want the hassle either.

Don’t let it eat you up. If your store is like the rest of ours, you wasted more than that amount on food in some way over the same time period. Look for ways to minimize the exposure like those suggested above then raise your delivery charge or the base price of a pie by 10-15 cents and move on.

Maybe I’m missing something? The phone rings, you take the order, the customer gives you the CC number and expiry, you pre-auth while customer on phone, you/POS print out slip and driver takes to customer for signature, you batch close including any tips at end of shift. Where/how is the chargeback? Three years and first “request for info” two weeks ago from Paymentech. Faxed signed slip. All good. Told me was "bank error , not customer dispute.
If a customer was to dispute a charge after signing slip and did not contact you with a complaint right away, you would flag them as “BAD” right? Refuse to take any orders from them apart from cash up front, right?
Maybe my staff are right, I AM the Pizza Nazi lol…

Yes, you are missing something. Good thing your experience was “bank error” and not a real dispute, because a signed slip means absolutely NOTHING - unless it has a physical imprint of the card - which you didn’t say you had. Read your agreement. You would have lost any customer based chargeback.

You ask “where/how is the chargeback”? Well, it comes when the customer calls their company and says “I didn’t authorize that charge” or “my son used my card” or “I lost my card” or “my card was stolen” or “my husband used my card” or any of about 1000 different reasons they shouldn’t have to pay for the order. Stolen cards are, of course, not reported until AFTER the pizza is purchased. Even an imprint won’t save you from that chargeback.

Even a SWIPE won’t stop a chargeback. I had one a few months ago “unauthorized use of card”.

Wow is all I can say. I have three different credit cards that I use for business and two personal. I probably use a credit card on average five times a day and total value charged approaching $40,000 a month. I have not had a merchant take an imprint of my card since the “swipe” was invented. I find it hard to believe that every single merchant I deal with “breaks the rules”.
In fact, as a merchant, I have not had a credit card company supply me with any way to take a swipe since the early eighties.
I tried to dispute a charge on my Bank of Montreal Mosaik MC a couple of years ago due to product not matching description. They replied… As you signed “slip” that was faxed to you by merchant and received goods dispute is denied.
Maybe different rules here in Canada? I am about to phone Paymentech to order Debit at the door, I’ll ask them and report back.


A “swipe” and an “imprint” are 2 different mutually exclusive things. If you swipe the card, then there is of course no need for an imprint.

If you are taking a phone order - and processing the CC over the phone (as you stated in your post) - then there is no swipe, right? It is a keyed transaction. In order to have any chance of winning a chargeback on that transaction you will need an imprint of the card. I’m sure it’s in your merchant agreement.

Paymentech Canada tells me that so long as we get face to face with the customer AND get a signature that matches the one on card, ON THE SLIP GENERATED BY THE PROCESSING TERMINAL, no chargeback. In house "customer agrees to pay blah blah blah made up slips will be rejected EVERYTIME.Take a CC number over phone, no signature, equals chargeback you will lose everytime.
He also said yes, rules in USA totally different.

I say we all go back to paying for things with cold hard cash.

I’m curious, how is Paymentech verifying that the signature on the slip matches the card? Are they requiring the customer to send in their card when they file for a chargeback?

Signature match is so hokey anyway - I know my signature doesn’t match what is on my card. Pretty hard to sign that little itty-bitty space the same as you would sign a paper slip.

I’m also curious, Boatnut, what do your drivers do when the signature doesn’t match the card?

In regards to the keyed transactions… Yes, we take the number over the phone. We enter it into the terminal. It produces a slip that is exactly the same as when we swipe. The customer signs upon delivery. The driver verifies signature matches (ok, as close to etc) by requesting to see card. Different name, we refuse. Happens about once a month. I described our exact methods of taking payment to Paymentech this morning and they assured me if I have customer sign the ticket THAT COMES OUT OF THE PAYMENTECH TERMINAL, NOT THE POS TICKET, sight card and signature is a reasonable match, all good.
Kinda makes sense doesn’t it? They also told me that those “approval” forms that some companies fax to you to sign before they will process your order MEAN NOTHING to Visa/MC etc. MUST be an actual original slip from terminal with correct signature.
Operating in a small town may also be helping me dodge the shysters! I am NOT a member of “that motorcycle gang”, however, I look like I could be and I do ride a Harley and I’ve been told that people think I am a “member”. This could also be helping reduce the bitchin lol…

We always verify the phone # vs. caller ID, this is for the safety of the drivers in addition too having accurate contact info for checks/CC.

We do not imprint card 100% of time on delivery. We do if something seems off, which honestly isn’t very often.
The latest round of chargebacks have been from the same location. Guy ordered food for the office and then later disputes the charge saying he never placed the order. I took his order over the phone and I knew the dude. The driver that delivered the food also remembered the guy. Apparently he claimed he lost his card.

Now I get a chargeback notice for charges made in Feb. delivered to the same store as above, these charges were made on a company credit card belonging to a company based about 2 hours away from here. Acording to the ticket, the same dude placed that order.

The guy is in jail now since he also stole his employers deposit one Friday last month.

In addition to the amount of the charge, the credit card company also charges you $20.00 (or me at least) to cover the cost of processing the chargeback. Even if the cardholder writes a letter to the card issuer stating that it was all a big mistake and the charge was valid, you don’t get the $20.00 back. If he cardholder writes a letter to the card issuer stating that it was all a big mistake and the charge was valid but you do not have an imprint of a keyed in card, you still lose the chargeback and the card issuer gets to keep the money the cardholder paid for your product and the $20.00.

It’s the cost of doing business today, they used to say the same thing in Chicago during Capones day :frowning: At least Capone looked out after the people he took money from.

Blacklist that location for credit cards; cash only. There’s no need to change your ways for everyone just because of this one bad customer.