High-Tech Devices Need Low Tech Back-up.
For Every Merchant, It's a "When," Not an "If".

And When the Time Comes, Payback is Immediate

By: Biff Matthews, President, Cardware International

According to the National Retail Federation, one-fifth of retail sales (19.9%) is
transacted between November 1st and the end of the year. With that critical
season approaching, it would be wise for the MLS community to recommend
that merchants protect their ability to continue transacting, despite whatever
communication snafus, device malfunctions, or other fiascos might be in the offing. 

When a PC goes down, the obvious back-up is pen, paper, and calculator. 
The merchant equivalent is an Imprinter and sales drafts.  This is a fall-back
tool every merchant needs.  The only debate about its use is “when.”    

You, the salesperson, and your merchants, insure virtually everything that’s
“operation-critical” – except the transaction, (without which nothing else matters
anyway!)  An imprinter is the least costly insurance you can buy – and it always
pays off.  It is the ultimate guarantee against chargebacks, as I’ll discuss in a
moment.  With the average ticket now just north of $50, one sale lost due to
a downed terminal, or one charge-back prevented, more than justifies the
investment.  The additional processing capability it affords is gravy. 

For the MLS, there are two principles here:

1. An imprinter is the ultimate, easy add-on sale.  It’s inexpensive. 
   It won’t become obsolete (or, rather, any more obsolete.) 
   There’s virtually nothing that can “go wrong.”
2. If the MLS is dedicated to the success and satisfaction of merchants,
   this is a no-brainer. Recommending this simple, preventative measure
   demonstrates thoughtful planning, depth of knowledge and a level of
   professionalism that’s exceptional.

But, let me return to chargebacks for a moment, because they’re the strongest
argument in favor of having a back-up to electronic transacting. 

Card association rules require that a legible copy of any transaction be retrieved
upon request. An imprinted signed sales draft is satisfactory.  The card association
goes as far as to recommend (“strongly”) that every manually-entered “card-present”
transaction be imprinted as proof the card was actually . . .  present. 

There are, unfortunately, criminals who understand how the system works, and who
are determined to exploit it.   They will visit big ticket stores, or stores carrying easily
fence-able goods.  Previous to their visit, they have taken a legitimate card and
compromised its stripe to render it unreadable.  They then make a minor purchase,
and observe whether the store makes an imprint of the card.  If it does not, the
fraud-monger (or one of his co-horts) will return, and make a sizeable purchase.
When the bill arrives, the transaction will be disputed. In this case, the merchant
is defenseless.  He is out the cost of the merchandise. 

Another version of this scam, somewhat less brazen, is the cardholder who summarily
disputes every transaction.  Cardholders realize they have the upper hand in disputes,
and, because associations do not track cardholder fraud, these scams go undetected.

You, as the professional, go a long way toward protecting your merchants, (not to
mention your residual income) with the backup tool described.  The other half of the
effort, of course, is there needs to be emphasis on keeping the imprinter available for
all transactions, teaching clerks how to use it properly and educating all within the
retail organization about why this particular aspect of fraud prevention is as important
as those that are better known (or more recently on CNN.)

Imprinters are not familiar creatures to new and/or young sales clerks who grew up
with computers.  They will put the card on top of the sales draft, the card in upside
down, the imprinter form in backwards.  All of us used to know how to use the
devices properly; today,  almost no one does.  What everyone knows now is the
“striper.”  That’s why training is so important.    

Imprinters are like a spare tire – you may rarely need it, but there’s no substitute
when you do. Numerous companies offer imprinters, Addressograph/ Bartizan and
Data Systems among them.  Cardware offers a “Back Pack,” a retail “emergency kit”
that includes imprinter, imprinter plates, a small quantity of sales drafts and credit
slips, and complete instructions for back-up or manual processing.

It may not justify a special visit, but as we enter the holiday buying season,
a simple postcard, statement message, statement stuffer, fax or email is a
worthwhile reminder that plugging this hole in merchant security is something
that can be achieved easily, inexpensively, and almost instantly.  (“It’s fall. 
Do you know where your imprinter is?”) 

While the card association has relaxed its rules on small ticket sales for “fast feeders,”
there is no such accommodation for the beleaguered general merchant population. 
Here, requirements for legible, signed receipts for the majority of sales are unchanged. 
So, raise the question: it doesn’t happen often, but “what did you do last time
your terminal (or printer) failed?”  (Or the system went down, or the phone
lines malfunctioned?)

One average day’s business is substantial, particularly pre-holidays.  And even if that
were not the case, just one chargeback prevented is economic justification for having
imprinter back-up.  It’s also legitimate mischief prevention: foiled once, at least one
breed of predatory low life is likely to go elsewhere.   

Some emergency measures –(think fire escape) - are obvious.  Less obvious, but
equally critical to merchant success, is the protection of his business, and his money.  
That should be the #1 business of all of us.   

Biff Matthews is President of Thirteen Inc, the parent company of
CardWare International.  He is one of 12 founding members of the ETA,
serving on its board, advisory board and committees.  (740) 522-2150.

An excellent generic merchant operating guide, MOG-293,  
published by Heinrich Marketing, covers manual processing
in clear detail, right down to how to fill in a sales draft. 
It also includes up-to-date anti-fraud and card ID techniques. 
Every merchant should have one, and every MLS should
provide one. 

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