Electronic Payments has recently noticed an increase in chargebacks resulting from improper
transaction handling at the point of sale. This guide outlines essential best practices to help
merchants reduce fraud risk, prevent chargebacks, and minimize financial liability.
CARD ACCEPTANCE GUIDELINES
Businesses accepting Visa, Mastercard, American Express, and Discover are expected to follow
all applicable card network rules and industry standards, including, but not limited to, those
outlined below.

  1. EMV Chip Card Transactions
  • Always insert the chip card into the terminal when a chip is present.
  • Never bypass the chip by swiping the card unless specifically directed by the
    terminal.
  • If the chip cannot be read after multiple attempts, request an alternative form of
    payment.
  • Do not manually key-enter a card number as a substitute for a failed chip read.

IMPORTANT! Failure to properly process EMV chip transactions may result in liability shifting to
the merchant in the event of a chargeback.

2.Contactless & Mobile Wallet Transactions

    • Accept tap-to-pay (contactless) and mobile wallet transactions whenever
      possible. These payment methods provide enhanced security and reduce fraud
      exposure.
    • Ensure equipment is properly configured and does not support offline
      contactless approvals.
    • If the contactless payment is declined, attempt the EMV chip transaction or
      request another form of payment.
      IMPORTANT! Never manually key-enter a card, even for convenience. Manually entered
      transactions carry high fraud risk, are difficult to dispute in chargebacks, and leave the
      merchant financially liable, even when AVS and CVV data are present. Always request an
      alternative form of payment instead of key-entering a transaction.

    Strict Prohibitions
    Merchants should NEVER:

    • Manually key-enter card data including, but not limited to, un-embossed cards
    • Write card numbers on paper drafts or receipts
    • Take photos of credit cards
    • Store cardholder data outside of approved, PCI-compliant systems

    IMPORTANT! Handwritten or stored card data does not provide protection in the event of a
    chargeback and may create additional compliance risks.


    FRAUD PREVENTION AT THE POINT OF SALE
    Suspicious Transactions
    If a transaction appears suspicious:

    • You may request a valid form of identification to help verify the cardholder’s identity.
    • If identification is voluntarily provided by the customer, compare the cardholder name
      on the card to the identification presented.
      Note: Card network rules prohibit requiring identification as a condition of accepting a valid
      payment card. Transactions should not be declined solely because a customer refuses to
      provide identification.

    • Red Flags & Fraud Warning Signs
      Exercise caution if any of the following red flags are present:
    • The customer appears nervous, rushed, or unusually distracted
    • Multiple cards are attempted after repeated declines
    • The transaction amount is unusually large or inconsistent with normal purchasing
      behavior
    • The customer requests manual entry of card information, even if the purchase will be
      picked up in person at a later date
    • The purchase behavior does not align with normal activity for the merchant location
    • The customer asks to bypass standard payment procedures If suspicious activity is identified, merchants should proceed with caution and consider
    • declining the transaction.

    • CHARGEBACK TRENDS & PROTECTING YOUR BUSINESS
    • Several factors are contributing to the increase in chargebacks, including:
    • Manual entry of card numbers
    • Failure to process EMV chip-enabled transactions properly
    • Improper handling of suspicious transactions
      To help reduce fraud exposure and reduce disputes, follow these essential tips:

    DO

    • Accept EMV chip or contactless payment methods
    • Follow proper card acceptance procedures and all terminal prompts
    • Train employees on fraud prevention and suspicious transaction handling
    • Maintain compliance with card brand and PCI security requirements
    • Review card brand chargeback best practices regularly
      DO NOT
    • Manually key-enter card numbers
    • Store or record cardholder data
    • Ignore suspicious customer behavior
    • Bypass EMV chip or contactless processing procedures
    • Assume a transaction is legitimate without proper verification
      CARD BRAND RESOURCES
      https://www.mastercard.com/us/en/business/support/rules.html
      https://corporate.visa.com/en/solutions/acceptance/chargebacks.html
      https://www.americanexpress.com/content/dam/amex/us/merchant/pdf/US-DisputesReference-Guide-Updated.pdf

    Key Takeaways
    Consistent adherence to proper card acceptance procedures is critical to reducing fraud
    exposure, preventing costly chargebacks, and protecting your business from unnecessary
    financial loss.
    Merchants should review these guidelines with their staff and apply them consistently at the
    point of sale