Maybe you thought you would get a break from hearing me talk about dangerous liability risks for your business. Sorry! Not today – there’s a big one coming up that you need to know about.
After Oct. 1, you could be responsible for the cost of fraudulent credit card charges made in your sports academy if you’re using an outdated credit card reader.
Here’s the deal: Thieves can steal the info from traditional magnetic strip credit cards much more easily than from newer cards that use a more secure microchip technology. We business owners need to make sure we have in-store credit card readers that can accept these new chip cards. If we don’t, and clients are forced to use the old magnetic strip on their cards instead, we’ll be on the line to pay the costs from any fraudulent charges.
For example, say that someone used a stolen credit card to buy a $300 baseball bat at your pro-shop in the past. The credit card company would typically give that $300 back to the victim once the fraud was reported, with no responsibility for your business.
After Oct. 1, though, if the thief were to use a stolen chip card to buy that bat and you didn’t have a chip reader to process the transaction, it could be your business’ responsibility to return that $300. The logic is that the chip technology could have prevented the theft. Therefore, the credit card companies did their part to supply the cards.
Oct. 1 is being referred to as the “liability shift” deadline. It affects all U.S. businesses.
A note: If the thief had used a card without a chip to buy the bat, the credit card company would still have been responsible, even after the liability deadline. (They’re on the hook to make sure all of their users have a card with a chip.) Similarly, credit card companies will still responsible for fraudulent charges from stolen chip card at chip-enabled readers.
Finally, this liability shift only applies to card-present transactions made in-store. It doesn’t affect online transactions (such as the ones your clients make at home from your scheduling software).
I hope you’ve already heard from your bank or credit card processor about this and are ready, too. However, several of my own eSoft Planner customers have mentioned that they haven’t been notified. So, I’d suggest being proactive to make sure you’re prepared.
Call your credit card processor to ask about your options. Most credit card processors are selling their own chip readers and terminals. However, other, independent companies are selling them, too. A simple search for “chip card reader” or “EMV card reader” (that’s the technical name for the new technology) can also help get you started.
To learn more, click here to read an article on Visa’s site that sums it up pretty well.