The fraud prevention focus
Operating a successful adult nightclub means protecting against unseen threats to your club and its bottom line. There are a few areas of “fraud” that plague clubs across the country, including credit card chargebacks and fake IDs. In this issue, we’re highlighting the companies and products — credit card/chargeback products and ID scanners — that will help YOU steer clear of these operational land mines.
(Note: This story appears in the March 2023 issue of ED Magazine)
Chargebacks meet their match with ChargeSavvy
ChargeSavvy adds an additional layer of defense by allowing merchants to collect additional evidence that has proven to be very effective against certain well-known chargeback codes. The evidence is securely stored and purpose built to be easily accessible when a chargeback occurs.
“The crucial step every merchant can take is to construct a multifaceted operational strategy that aligns with the capabilities of your technology and processing partner,” says Heather Vines with ChargeSavvy. “Revisit the effectiveness of this plan by measuring the results and adjusting your operations to further help de-risk revenue disruption caused by chargebacks.”
Vines recalls a chargeback horror story involving a birthday party:
“Birthday parties can be a lot of fun but maybe not for the mother from this story. Her son used her card to run up a $10K bill and then proceeded to initiate a chargeback the following day. Not only was the $10K withheld from our merchant’s nightly deposits, but this chargeback also prevented the following nights’ deposits from reaching the merchant’s checking account. ChargeSavvy’s payment and banking expertise guided the merchant through releasing the $10K and unblocking future deposits. Once this was fixed, the merchant was able to easily locate and submit the evidence that eventually won the chargeback. Sorry mom, but boys will be boys.”
ChargeSavvy is both a technology and a processing partner.
“Our unique all-in-one solution efficiently supports many custom workflows our merchants need,” says Vines, “while also providing guidance and expertise as it relates to banking integration and payment processing.”
For more information, call (708) 272-8170, email info@chargesavvy.com or visit chargesavvy.com.
SmartTab security trumps scammers
An industry-built POS system with clubs in mind, SmartTab’s greatest defense against chargebacks is its diligent record-keeping, which Daniel Baron, Founder and CEO of SmartTab, suggests will lower the likelihood of chargebacks. And if a chargeback does occur, SmartTab’s got your back with all of the records for defense already in place.
“I think a lot of these chargebacks are just crimes of opportunity” explains Baron. “The customer realizes that there’s this imbalance in the dispute resolution process, which places a heavier burden on the club. Clubs are then victims to the nature of their business being higher risk than restaurants, for instance, and their injury is greater because the ticket size is significantly larger.”
If customers and clubs could have more visibility into the sales process, a feature SmartTab provides, Baron believes that customers would be less quick to bring a dispute.
“It’s one thing to prove that the customer in question was ever in your club,” says Baron, “and that’s reactive: the club gets a chargeback, the club defends itself through this archaic process of faxing in your evidence to refute the dispute. But how to best approach a chargeback is to never receive one.”
Smart Tab’s “identity-based profiles,” created for every customer upon admittance into your establishment, proactively function collectively as a banned list, preventing previous problem customers from ever entering again.
“And if the person has a good status,” continues Baron, “because they’ve been here several times and they’ve used their cards successfully, you’ll feel far more comfortable knowing you can continue to extend credit.”
In the future, Baron imagines that the industry will look back and wonder, “‘How did we ever let strangers through the door and not know who they were, prior to a system like Smart Tab, to support safe, open and honest relationships with our customers?’”
For more information, please call (888) 612-1309, email info@smarttab.com or visit SmartTab.com.
Nationwide Payment Systems helping combat chargebacks through education
NPSBANK offers transparent billing and competitive rates, all backed by the best 24/7 customer service! They approach each customer relationship with the same degree of care and commitment as when the company was started more than 20 years ago.
NPS has a podcast, B2B Vault — The Payment Technology Podcast. There, they have talked about how to fight chargebacks; currently, card-present merchants like clubs and restaurants are experiencing a high rate of chargebacks despite the card being present and the EMV chip being read.
“Many business owners, managers and office staff need more understanding of how the rules and the chargeback game have changed in the last couple of years,” says Allen Kopelman with NPS. “We also offer a service where we can help the merchants write responses and/or train the staff to write the letters properly and review things for them.”
One step Kopelman advises clubs to take today is to add “All Sales Final” on the bottom of all the receipts and ask for a signature.
“We had a club with a customer that charged over $40K, with several charges,” says Kopelman. “There was a lot of back-and-forth between the merchant and the chargeback department, providing receipts, and then the credit card company asked for detailed receipts, which were included (not providing this could be the end). We had to write a detailed letter addressing the 10-plus complaints in the chargeback letter, and we had to get some affidavits signed by employees attesting that the person made the charges.
“Now the chargeback department does not want copies of the driver’s license or credit card and does not want pictures of the person (personal identification information),” he continues. “We put a huge package together, and, in the end, the merchant won the chargeback and got back the money.
For more information, call (954) 772-9008, email info@npsbank.com or visit npsbank.com.
IDetect can help you snoop out, stop fake IDs
IDetect, Inc. first began in the nightclub industry in 1995 when there was an immediate need for mailing list automation. Subsequent to fulfilling this need, the company learned that along the process they were fulfilling another urgent need: identification verification and entrance security. After a few additions and modifications, it became evident just how successful their technology had become for ID scanning and identification verification. Not only did IDetect’s client’s liability insurance decrease, but perpetrators of crimes were being apprehended by law enforcement with the assistance of IDetect ID scanner systems.
Presently, their StopFAKE scanner is an easy-to-use product that does all the work, which can expedite the check-in process.
“A smoother checkin process takes the pressure off of the door staff, as well as making a better first impression on entering guests,” says Michael Sengstaken with IDetect. “Guests that are having a good experience upon entry tend to not give door security a hard time when they are trying to do their job. Having an easy-to-use and effective security system makes the door staff’s job easier, creating a streamline process allowing guests to enter the establishment faster leading to increased revenue.”
As many club owners know, the biggest issue allowing underage service due to not stopping fake/borrowed ID use at the front door is the penalty or complete revocation of the liquor license.
“Both are a large issue because they both lead to underage alcohol service,” adds Sengstaken. “IDetect STOPFake will stop nearly 100% of all fake IDs, and carefully analyze a friend or family-shared ID with use of IDetect’s on-screen questions that can be asked of the card holder. The answers displayed should be known to the rightful ID owner.”
For more information, call (888) 270-4513, email info@idetect.net, or visit idetect.net.
Protect your patrons and establishment with Patronscan
Patronscan offers a multi-layer solution that uses advanced technology, blending their proprietary hardware and software seamlessly, to scan IDs and verify the age of patrons quickly and accurately. The system can detect both fake IDs and borrowed or stolen IDs. It is designed to help clubs and establishments comply with age verification requirements and minimize the risk of legal and financial consequences.
“In the last 18 years, Patronscan solutions have detected over half a million fakes,” says Jason Swanson with Patronscan.
A smoother check-in process can increase efficiency and revenue for the venue, improve customer experience, improve security measures, and, depending on the right integrations, can also provide anonymous but valuable data.
“The right solution, like Patronscan, will bring together features that will address all these requirements,” adds Swanson.
Clubs can be on the hook for significant legal and financial consequences, including legal liability, reputation damage and increased insurance costs when being duped by fake IDs.
“Robust age-verification processes, backed up by the right solution, are the only way out,” says Swanson, who warns against fake IDs are becoming more sophisticated.
“Fake IDs are not only getting cheaper to procure but are also well-made these days, making them difficult to detect,” says Swanson. “On the other hand, borrowed or stolen IDs are genuine IDs that are being used illegally by someone else. Understandably, both can cause significant problems, but with the right solution, like Patronscan, venues can put a massive dent in both.”
For more information, call (877) 778-9798, email sales@patronscan.com, or visit patronscan.com.
More than 300 custom applications for IDScan.net’s ID verification
Co-founded by CEO Denis Petrov and CTO Andrey Stanovnov in 2003, IDScan.net launched in a garage and was nurtured by the tech community and business accelerators in New Orleans.
In 2009, IDScan.net was the first to deploy an iOS mobile scanning solution. It has grown to become a leader in the burgeoning field of information gathering and identity verification.
Today, IDScan.net employs 70 people across offices in New Orleans, Las Vegas, Seattle, and Europe. Central to its success is a culture of innovation and a commitment to its core values: excellence, accountability, innovation, and integrity.
IDScan.net has created enhanced environments and experiences for over 6,000 clients, including IBM, Shell, AMC Theaters, Dave & Busters, and many more of the world’s most trusted brands. Since 2003, their international team of industry specialists has pioneered technology that anticipates the rapidly evolving needs of leaders across all industries — from gaming and hospitality, to retail, finance, and education.
They’ve developed more than 300 custom applications and the industry’s leading and most up-to-date library of global ID formats.
For more information, call (504) 434-0222, email hello@idscan.net, or visit idscan.net.
