Why Are You Throwing Your Money Away?

Friday, September 13, 2019

 

If your restaurant hasn’t yet switched to EMV chip cards from swipe and sign payments, it’s costing you money.

Although the EMV liability shift went into effect October 2015, nearly one-third of all businesses, including many restaurants and cafes, still haven’t adopted this change. The reasons for not changing vary, but the impact can be increased liability for fraudulent charges.

Heartland data ranks restaurants, bars and fast food establishments within the top five most impacted by chargebacks. In 2018, the average restaurant ticket size of a chargeback was $62. It was $40 for bars and almost $8 for fast food. 

Besides chargebacks, here are four more reasons to upgrade your payment technology:

1. Reduce Fraud: Implementing EMV protects your eatery against fraud because it’s virtually impossible to recreate the chip. However, if your equipment isn’t EMV-compatible, then the user of a fraudulent EMV card can go undetected. According to Visa, card-present counterfeit fraud dollars for merchants that have completed their chip card acceptance upgrades was down 82% in June 2018 from levels before the EMV liability shifts took effect. Although upgrading to EMV isn’t the law, your liability in credit card fraud is far higher if you don’t have the proper terminals in place.

2. Perks of having EMV: Diners have gotten the hang of inserting cards instead of swiping, and the added sense of security provides peace of mind. Not accepting chip payments is seen as a negative by consumers. Get onboard and change your terminal to reduce risk, save money, and build better relationships with clients.

3. The risk of not transitioning to EMV: Your restaurant can become a target of savvy thieves seeking out businesses that haven’t adopted EMV. If someone presents a stolen chip card to buy a $500 gift card or a dinner for a large crowd and your staff swipes the card through a terminal that doesn’t support EMV, you’re responsible for the purchase. You are also liable if you swipe or key in a chip card at the terminal, so ask for another form of payment if the card isn’t working. Don’t give away free meals unintentionally--the best way to avoid restaurant EMV fraud is to upgrade your technology.

4. Security: Adopting EMV gives you another layer of protection by decreasing your chance of a data breach. If a hacker breaks into a business’ EMV-enabled system, they can only obtain an encrypted version of the data – which is completely useless to fraudsters. Every year, businesses make national headlines for having data breaches that exposes their cardholders to fraud. That’s enough to scare anyone into wanting a more secure checkout.

Don’t procrastinate or blow off EMV adoption as an added expense. Not adopting the change is expensive. If your restaurant doesn’t have EMV, you are on the hook for chargebacks related to fraudulent transactions, which outweigh the costs of transitioning to EMV. Also consider using a processor that offers the added benefit of a breach warranty to further protect your business.