Point of Sale (POS) Glossary
Chargebacks are the reversal of funds previously paid to a merchant by a customer’s financial institution. After a point of sale system completes a transaction, the customer may initiate a reversal of funds. The most common reasons include customer fraud, criminal fraud, and merchant error.
Some experts claim retail chargebacks cost businesses almost $3 for every $1 in claims. POS systems can help protect against chargebacks by adhering to or exceeding industry security standards. Store policies can also help to reduce fraud, for instance, only shipping to verified addresses.
Card present and chipped cards are a more secure method of accepting payments than online or over the phone, and may reduce fraud. If a POS system supports delivery drivers taking payments, or processing cards at the curb, this also reduces chargebacks and fraud.
As a savvy small or medium-sized business owner, you know that you can’t outsell the giant mega-store. You build your customer base because you provide excellent service, an enjoyable shopping experience, and a fantastic value.