May 25, 2016TSG Press

TSG in WSJ: More Chip-Card Headaches, This Time for Merchants

A few weeks ago, a woman used a counterfeit card to buy $400 worth of gift cards at a Harps grocery store—and then hit nine more stores in quick succession after the first attempt worked, sticking the regional grocer with a tab for $4,000 that previously would have been absorbed by the card-issuing bank.

“We’ve seen a significant uptick,” says Mike Thurow, vice president of store systems for Harps Food Stores, referring to counterfeit-card costs. The chain, which operates 80 stores in Arkansas, Oklahoma, Missouri and Kansas, aims to start processing chip transactions within the next couple of months.

Chargebacks among small and medium-size merchants rose 15% in the fourth quarter from a year earlier, according to a recent survey by The Strawhecker Group, a payments consulting firm. The industry believes the volume of chargebacks has likely risen since then, because the fourth quarter included only a few weeks under the new rules and it often takes a while for the costs to flow through to merchants.

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