The shift to EMV chip cards, designed to stop credit card fraud, happened in late 2015. To this day, consumers are still taking advantage of merchants who have not adopted this new technology, and winning chargebacks from unsuspecting merchants.

“EMV chip technology has been rolling out to consumers and merchants in the United States. Visa chip cards protect in-store payments by generating a unique, one-time code needed for the transaction to be approved. This feature makes it virtually impossible to counterfeit cards, helping to eliminate in-store fraud.” Taken from the Visa.com website. The key words in this paragraph are IN-STORE.

Merchants are required to adopt this EMV chip card technology or else the liability for fraud shifts from the card issuer to the merchant. A consumer who uses a magnetic stripe card at a merchant location who does not have EMV chip card technology can charge back the transaction and always win the chargeback. That means the merchant always loses. There is no gray middle. No chance for the merchant to argue with their processors’ chargeback department.

Merchants set up for online or mail order/telephone order business are not affected by this liability shift for cards transacted in this manner. If however, such a merchant occasionally swipes a card through a non EMV terminal or non EMV mobile swiper, that transaction is subject to a chargeback loss.

In summary, any merchant who accepts for payment any card swiped through a terminal or mobile device that is not EMV ready needs to be aware that they will always lose, should the consumer choose to issue a chargeback. Merchants Beware: There are people out there who know how to milk the system using this EMV Liability Shift Scam.