Credit Card Liability Shift Affects Spas

EMV Devices for Spa


It is now over one year past the October 2015 deadline for EMV and many businesses, including spas, have not yet made the move to accommodate chip cards as EMV. In order to make the switch, businesses need to upgrade to the new chip readers and processing technology, a hurdle that some spas have been unwilling or unable to jump.

For those that have not yet adopted EMV, the banks have shifted responsibility for any fraudulent chip-card transactions to you, the merchant. This may not sound significant when compared with the investment in moving to EMV, but spas should be aware that this responsibility can quickly become expensive.

According to an April 2016 report by The Strawhecker Group, small and midsized merchants saw a 31% increase in the number of chargebacks right after the liability shift took effect. In addition, experts are seeing fraudulent activity move from merchants that are processing chip cards as EMV to those merchants that have not yet adopted the new technology.

Recently we spoke to a hotel that experienced a $2,000 dispute over a charge. Their claim was denied because they did not have EMV devices in place and could not process chip cards as EMV.

We encourage all of our SpaSoft clients to upgrade to SpaSoft v5.0 and our Secure Payment Solution (SPS). This is the ideal opportunity to implement EMV-capable card readers while moving to the more secure Point-to-Point encryption. SpaSoft, Elavon, FreedomPay, Merchantlink and Shift4 collectively support multiple manufacturers’ devices capable of processing both Chip & PIN and magnetic swiped transactions.

Please contact your SMS Account Manager with any questions you might have about upgrading and being EMV ready to protect yourself against claims and disputes.