Protection from Fraudulent Chargebacks for Restaurants
It’s hard enough being in the restaurant business: the conventional wisdom is that 9 out of 10 restaurants fail in the first year. With the extraordinary cost of overhead, the difficulty of getting and keeping good staff, the challenges of a difficult economy, and the general difficulty of the hospitality industry, it’s no surprise that most restaurants fail before they have a chance to really take off. With all these stumbling blocks, the last thing a proprietor needs to worry about is fraud on the part of the customer. But every restaurateur knows that the dreaded “chargeback” can cost them time and money long after an offending patron has left the establishment.
A chargeback is a disputed credit card transaction that takes place after the meal has been served and paid. It can happen the next day or even months later, but a fraudulent chargeback can cost a restaurant a lot of money. With credit card companies and banks wanting to stay on the good side of customers and give them the benefit of the doubt when issues of security come up, it can be difficult for restaurants to prove – even when they have a signed credit card slip – that the patron was in fact in the establishment and running up the charges they’re challenging. Regardless of the motivation on the part of the customer – keeping down an expense account, hiding a personal transgression, or a simple desire to escape their expensive tastes – a fraudulent chargeback is a nightmare for a restaurant.
A new development in restaurant point of sale systems from Next Gen Dine promises to provide the restaurateur with an extra layer of protection with its new PhotoSnap feature. The PhotoSnap capability that is built in on every Next Gen Dine mobile point of sale system allows the business to protect itself from fraud by adding an additional layer of identification to tickets over a certain predetermined amount. Restaurants can set their own ticket price threshold for the PhotoSnap feature, and any credit card transaction over that predetermined amount will require a snapshot of the cardholder as well as the customer’s ID and credit card. With an automatic date and timestamp included, it becomes much more difficult for fraudsters to contest legitimate charges while also providing the customer with an additional layer of security. GPS features can prove location, and the whole process is PCI compliant so that the restaurant can promise security for its valued guests.
According to Next Gen Dine, credit card fraud costs now top $100 billion annually. With numbers like that, it’s no surprise that merchants are looking for innovative ways to protect themselves against those who would take advantage after the fact. To us, it sounds like a win-win: not only are merchants protected, but guests can rest assured that should someone steal their identity the photographic evidence will protect their assets. What do you think? Is this an unnecessary invasion of privacy that will spook your restaurant’s guests? Or will it make them feel more secure in your establishment? Let us know in the comments!
For more on Next Gen Dine’s PhotoSnap technology, click here.
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