EXPO Certification Seminar:
Chargebacks are an unfortunate reality of the gentlemen’s club industry, but as Dan Neistadt, President of Electronic Merchant Services will demonstrate at EXPO 2019, there are several key steps clubs can take to prevent them.
According to the Nilson Report, which tracks the credit card industry, Visa and Mastercard were responsible for more than $13 trillion in global transactions in 2016.
That’s a lot of money. And, not all of it was honest. Cards get stolen, people can be duplicitous, mistakes happen.
You add in alcohol, carnal allure and buyer’s remorse (after all, try explaining to corporate why you spent $5,000 at a strip club) and it’s not hard to see why gentlemen’s clubs are a haven for chargebacks.
Dan Neistadt sat on the acquiring committees for both Visa and Mastercard and has been the president of Electronic Merchant Services for a dozen years. Neistadt has been in the merchant services business in various capacities for 30-plus years, which means he knows more than a thing or two about credit card chargebacks.
“I’ve got a lot of history in this,” chuckles Neistadt, who is presenting the Credit Card “Chargeback” Specialist Certification.
ED Magazine spoke with Neistadt about chargebacks and how being proactive is one of the most useful tools to utilize.
ED: This isn’t just a standard EXPO seminar; your training certification seminar is offering very specific advice on a very specific subject. What practical skills will attendees of your training seminar walk away with?
NEISTADT: This will be a primer on chargebacks, what is a chargeback, what is the process associated with a chargeback, what happens when you get a chargeback, how to combat them and alternatives to minimize chargebacks.
ED: What’s the biggest misconception about chargebacks you hope to clear up with this seminar?
NEISTADT: The biggest misconception would be, and there are a lot of them, is this: Are they avoidable? And then, what do you do when you get one? Do you roll over, or do you represent it? And if you lose a representment, what happens when you go to arbitration? And if you lose in arbitration, are there alternatives from there? In my opinion, the club should go on the offensive rather than on the defensive, because they have the ammunition.
“(Preventing chargebacks) is a very serious job because it has financial impacts to the club, so the people who should be (at EXPO) are not necessarily only the owners, but the individuals they have delegated to handle their chargeback processes. Asking a bartender, ‘Do you remember?’ isn’t going to cut it.” - Dan Neistadt
ED: Why is it crucial for staff to attend, as opposed to just club owners acting as delegates?
NEISTADT: My view on a chargeback, especially in a chargeback-heavy industry like clubs can be, is that it’s a full-time job. It’s a very serious job because it has financial impacts to the club, so the people who should be (at EXPO) are not necessarily only the owners, but the individuals they have delegated to handle their chargeback processes. Asking a bartender “Do you remember?” isn’t going to cut it. But I know everyone that comes to this seminar will come away with much better knowledge on this critical subject.
ED: Do card companies tend to take the bank’s side more heavily when resolving cases with the gentlemen’s club industry versus other industries?
NEISTADT: This industry is a bit different because a majority of the chargebacks come about from family fraud. (Note: family fraud is essentially when a known party steals or manipulates your credit card information without your knowledge) It’s hard to have family fraud in this industry because you have a live body in front of you. Family fraud is more prevalent in the internet businesses. I would think you have a better chance of winning in a chargeback situation than an internet-based company would have. Depending on the amount of the chargeback, I would always represent it, I would fight it.
ED: What are some of the most common mistakes club operators make when accepting credit cards from customers, especially on high-dollar tabs?
NEISTADT: Alcohol or drugs, the person is drunk or high. Part of the problem is you mix tabs so you don’t separate the bar from other entertainment offered, and then you don’t fight the chargeback. There are things you could do to go to the company. For instance, if a person takes a young lady into a side VIP room, there should be a separate agreement they sign. Or maybe you get a picture of an individual at the time they sign their tab. Those are the kind of things you can start to do to protect yourself.
For more information, visit emscorporate.com or check out Dan at the Credit Card “Chargeback” Specialist Certification seminar at the 2019 Gentlemen’s Club EXPO.