Retailers have been warned to retain CCTV footage for several months to protect against fraudulent card chargebacks. On 22 February, a customer walked into Lifestyle Express St Augustines Parade in Bristol, purchased a pack of Sterling cigarettes via contactless payment, opened the pack and inspected it before leaving.
Luckily, the retailer still had the high-quality CCTV footage showing the visit when, more than a month later, a chargeback claim from Barclaycard showed the customer was falsely stating the goods were “defective or not as described”. The shop owner has challenged the claim, but still faces a chargeback fee if the challenge is accepted. Merchants with high levels of chargebacks can also face fines and fees from Visa and Mastercard.
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The Bristol retailer is far from alone in facing this challenge. Fraud prevention service Cifas warned cases of chargeback fraud are on the rise, fuelled by the cost-of-living crisis.
The Lifestyle Express owner and Fed member Jaykishan Patel told Better Retailing: “We saw a rise in similar fraud on deliveries with Uber Eats and Deliveroo, with the customer claiming the goods were not received or faulty. Other retailers I know are also reporting more chargebacks. The problem is, most CCTV isn’t kept for long enough to dispute the claim. I’ve made it so the CCTV camera for the counter is stored for longer than the rest in the shop to protect myself.”
New type of risk
Hetal Patel, Fed national deputy vice president and owner of HRDV News in Maidenhead, warned: “This is a new type of risk for many shops. Customers come in, purchase, wait 20 days and then raise a chargeback. Often the retailer won’t have the evidence needed to prove the customer is lying.”
In order to contest a chargeback, Barclaycard had requested the Bristol shop owner to provide a copy of the original invoice/receipt, an “independent report to support your case”, copies of any terms and conditions and how these are shown to customers, and proof of any returns credit already provided to the claimant.
Shops can reduce and contest chargebacks by:
• Retaining clear CCTV footage of the counter for 120 days (the maximum time after purchase a customer can raise a chargeback)
• Reconfirming the tobacco requested matches the pack provided to reduce errors
• Displaying a refund policy at the till
• Being suspicious of uncommonly large transactions of tobacco and/or alcohol
• Asking your card merchant provider to switch off ‘card not present’ transactions.
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