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 a chargeback or dispute related to the transaction were to occur.
By following these guidelines, you may be able to reduce the likelihood of receiving a chargeback and you’ll be more prepared if you do receive one.
Best Practices for Keyed-In Payments
Keyed-in payments are inherently riskier because the customer does not 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, the billing address, card number, expiry date and the CVV code on the back of the card.
Obtain a Signature
If you are processing a large transaction, ask your customer to sign an invoice, a card authorisation form or a contract outside your Square App that authorises the payment and outlines your refund policies. Once signed, make sure you keep the documentation on file.
If you are shipping a product, make sure you keep the tracking information and delivery receipt. For large orders, you can require a signature confirmation upon 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. These precautions are highly recommended for phone and invoice payments.
Match Billing and Shipping Postcodes
If you are shipping an item, check whether the billing and shipping postcodes match. If they don’t match, ask your customer why. Their answer should make practical sense. If it doesn’t, do not accept the payment. If you have any questions about accepting a payment, always feel free to contact us.
Tips for Processing Payments
If you’re processing multiple transactions for the same customer over a period of time, obtain a signed contract outlining 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 you include:
- transaction amounts
- frequency of the charges
- the duration for which cardholder permission is granted
- 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, bank transfer or money order, make sure you 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.
Surcharges: While currently businesses can pass on no more than the exact costs to the consumers, regulations can change at any time and it is your responsibility to adhere to the most up-to-date requirements. Learn more about applying a surcharge with Square.
Make Your Receipt Information Recognisable
Add your contact information
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.
Publish a refund policy
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 your business name. For example, if you are a taxi driver in Liverpool, write Taxi - Liverpool.
Write a description of the goods or services you sold
Provide 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 note for each item in a sale, save the item along with an item description to your item library. When you process a sale, simply select the item or service and the item description will be added to the receipt.
Collect Customer Feedback
Use Square Feedback to collect feedback from your customers about their purchase. If a customer has a problem with a sale, they can contact you directly from their digital receipt. You may be able to respond, issue a refund or resolve the issue without ever having to enter the dispute process.
Best Practices for Process Card-Present Transactions
Always Present Cards
If the payment card is available, always insert or swipe the card. A dispute on an inserted, tapped or swiped and signed payment has a higher chance of winning than a payment in which the card information was manually keyed in.
Have Customers Sign on the Signature Screen
For some international cards, obtain a signature for every inserted or swiped transaction. When you do so, 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. It is your right to require an alternate form of payment if you’re uncomfortable with the sale. 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.
All Square merchants have a per transaction limit of £25,000. If you have general questions regarding large transactions, contact us.
If you would like to accept individual transactions above £25,000 each, you’ll need to split the payment into multiple instalments. Make sure to record of the receipt number and the total amount charged for each instalment. 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: Merchants 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.
Although following these guidelines will reduce your chances of receiving a chargeback, there is always a potential risk associated with accepting card payments. If a customer 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.
Learn more about the dispute process and how we work with you to build a case.