SOME OF THE MOST devastating jewelry crimes are the easiest to prevent, but as an industry, we keep falling victim to the “forced transaction” scam. In an eight-month period, a team of just three people hit at least nine stores in five states with this scam. $400,000 in sales, all lost to chargebacks.
To begin with, your entire team must understand the risks involved in all money transactions. In most bad deals, we all add one ingredient: our own greed and hunger to make a sale.
The “forced” or “offline” transaction is pretty basic. The Bad Guy comes in to make a purchase (usually a large one), and the card may get declined at first or you can’t get a good chip read. The Bad Guy may act like they are on the phone with their bank to let them know they are making a purchase at your store.
They will often put you on the phone with “their bank.” They have you go into the menu on your credit card terminal to bypass your merchant processor. They will walk you through a forced or offline transaction. You may have to key in the card info or sometimes even swipe the info. Any authorization number will be accepted because it is not being looked at or processed by your processor — hence the name “forced” or “offline” transaction. Then a few weeks or even months later, you’ll get notification that you are getting a chargeback.
Rule of thumb: If you don’t get a clean chip read, you are at risk. You have to be able to prove you had a good, active credit card in your possession. Chip read is best, swipe is next best … an imprint and picture of the card follow far behind today. 99 percent of cards these days have a chip (not counting gift cards). Always think, “I need to do everything I can to prevent a chargeback.”
There is nothing wrong with asking to see ID. You can say your bank requires it for any transaction over whatever amount you set. We often make a copy or picture of the ID with the credit card. Make sure the name of cardholder on the credit card receipt matches the name on the ID.
Again, never let a customer hand you their phone to talk to the bank; never let the customer have you go through an abnormal procedure on your credit card terminal. If you can’t get a clean chip read, you are at risk. If you manually enter a credit card, you have no recourse on a chargeback. Never let anyone other than your own processor walk you through some abnormal procedure on your credit card terminal. Make sure your entire staff knows and understands this, and you’ll save yourself a lot of money and headaches later on.