With every card payment you take, you and your customer are entering into an agreement. This means that you can be held liable for the amount of the payment if there’s a payment dispute or chargeback related to the transaction.

By following the simple guidelines below, you may be able to reduce the likelihood of a payment dispute and be prepared in the event that you do receive one.

Best Practices for Keyed-In Payments

Keyed-in and Virtual Terminal payments are inherently riskier because the customer doesn’t have to be physically present. Fortunately, there are some simple precautions that you can take to guard against disputes. 

Request Card Information

Make sure a customer can provide the name on the card, card number, expiration date and the CVV code on the back of the card.

Get a Signature

If you’re processing a large transaction, have your customer sign an invoice, a credit card authorisation form or a contract that authorises the payment and outlines your refund policies. You can write these up in something as simple as a word document. Once signed, make sure to keep them on file.

Delivery Confirmation

If you are shipping a product, make sure to keep the tracking information and a delivery receipt. For large orders, require a signature confirmation at delivery.

Know Your Customer

Get to know your customer before processing a large transaction. Verify your customer’s identity, billing address and business if applicable. Do a Google search or ask for a government-issued ID. We recommend matching the name on the ID to the name on the payment card. 

Tips for Processing Payments

If you’re processing multiple transactions for the same customer over a period of time, obtain a signature for each individual payment. In the item description clarify that the payment is an ‘instalment payment.‘

If you have a recurring charge with a client, acquire written cardholder permission to periodically charge for the recurring services or goods. On the written agreement make sure to include: 1. transaction amounts, 2. frequency of the charges, 3. the duration for which cardholder permission is granted and 4. the cardholder’s signature.

If you wish to refund a customer for a payment, always issue the refund directly back to the payment card. If you must provide a refund via cash, cheque or money order, make sure to obtain a signed agreement that your customer received the refund.

Never have your customer sign a statement waiving their right to dispute the transaction with the card issuer. This is a network violation and will impact your chances of winning a payment dispute if one occurs. Instead, follow the guidelines in this article to help put you and your customer on the same page regarding expectations for the completion of the transaction.

Card Acceptance Surcharges: Merchants in Australia can impose a surcharge on consumers when a credit card is used for payment, subject to applicable regulations and card network requirements.

Before you decide to apply a card surcharge, it is your responsibility to meet all legal and card network requirements.

For calculating surcharge fees, some customers have found third-party fee calculators helpful. You can find these online or within the Apple App Store or Google Play. 

Make Your Receipt Details Recognisable

Add your contact details

Add your phone number, address, website and social media pages to your receipts. This may help a customer reach out to you directly if something were to go wrong with a sale, rather than file a dispute with their bank.

Write a refund or cancellation policy

Add a refund or cancellation policy to your receipts. It’s best to have a customer enter their PIN for the charge when they are present. If a customer is not present, provide them with an order form and make sure to get a signature.

Make your business name recognisable

Make sure the business name on your receipt is recognisable. This is the name that shows up on a customer’s bank statements. If a customer does not recall a name on their statement, they may be more inclined to file a dispute.

If you do not have a business name or your business name is longer than 35 characters, add a description of what you sell and your location to the front of your business name. For example, if you are a taxi driver in Melbourne, write ‘Taxi - Melbourne, Victoria’.

Write a description of the goods or services you sold

Type an accurate description of what you sold for every transaction. This can help jog a customer’s memory and prevent a dispute from happening.

If it is too much to write a description for each sale, create an item library in your Square Dashboard. Then, when you process a sale, simply select the items or services sold and they’ll be added to the receipt.

Collect Customer Feedback

Use Square Feedback to collect feedback from your customers about their purchase. If a customer ever has a problem with a sale, they can reach out to you directly from their digital receipt. Then, you may be able to respond, issue a refund or resolve the issue without ever having to enter the dispute process.

Best Practices for Processing Payments with the Square Reader

Always Insert or Swipe Cards

If the payment card is available, you must insert the EMV chip, or swipe it in the case of an international card without a chip. You have a higher chance of winning dispute with an inserted or swiped payment, than if the card information was keyed in.

Have Customers Enter their PIN or Sign on the Signature Screen

When you process a chip card, be sure customers enter their PIN for every transaction over $35. If a customer signs for a payment, make sure the signature on the screen matches the signature on the back of the payment card. If the card is not signed, ask your customer for a government-issued ID and to sign the card. Then match the signature on the government ID to the signature on the payment card. While you can’t require your customer to provide an ID, and requesting an ID doesn’t change your liability for chargebacks, unsigned cards are invalid and should not be accepted.

Always Provide a Receipt

A receipt is a record of the transaction for both you and your customer. A receipt can help a buyer recall what a charge was for and in the event of a dispute, can help you represent yourself.

High-value Transactions 

All Square merchants have a per transaction limit of $50,000. If you have general questions regarding large transactions, contact us. If you would like to accept individual transactions above $50,000 each, you’ll need to split the payment into multiple instalments. Make sure you note the instalment number and total in the payment receipts for your records. Please note that in order to ensure a secure purchasing environment, we may periodically contact customers for additional information regarding their business or transactions.  

Note: Customers who process more than $100,000 annually will be asked to sign a Commercial Entity Agreement, acknowledging that the payments processed are associated with a commercial business.

Learn about best practices for protecting yourself from scams and fraud.

Chargeback Support

Although following these guidelines will reduce your chances of receiving a chargeback, there is always a potential risk associated with accepting credit card payments. If a customer ever does dispute a payment, Square will represent you in the dispute process free of charge, and our team of specialists will use their expertise to help you along the way.

For more information about the dispute process and how we work with you to build a case, please contact us.