Here Comes the Bill for Credit Card Laggards
The bill is starting to come due for retailers who didn’t swap to the new credit card readers by the deadline last October. The Wall Street Journal reports this week that chargebacks among small- and medium-size merchants rose 15 percent in the fourth quarter. Strawhecker, a payments consulting firm, said that figure is rising because the fourth quarter only had a few weeks under the new rules. Since October, merchants who didn’t swap to the new readers for cards with an electronic chip are on the hook for fraudulent activity in their stores.
So far, according to one survey, only 22 percent have installed readers that can process the chip-enabled cards. The main complaints are the cost of new readers and the slower time for processing each transaction.
There are several anecdotes of retailers getting hefty bills from the card issuers. One big merchant was hit with $30,000 in chargebacks after a counterfeit card was used dozens of times over several days.
The good news for pet retailers is that they are well down the list of retailers likely to be targeted. Favorites are electronics, clothing, liquor, jewellery and tobacco stores—which all sell merchandise that can be resold and converted to cash easily.