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Protect Your Remote Payments

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SHOP STATS: Midwest Performance Cars Location:  Chicago, Ill., Northbrook, Ill.  Owner: Andy Bizub Staff Size: Chicago - 9. Northbrook - 5  Shop Size: Chicago - 8500 sq ft, Northbrook - 7500 sq ft  Number of Lifts/Bays: Chicago - 9 lifts 5 bays, Northbrook - 6 lifts 3 bays   Average Monthly Car Count: Chicago 128, Northbrook 85  ARO: Chicago $1150, Northbrook $70  Annual Revenue: Chicago $1.7 million, Northbrook $700,000

As the repair industry continues to adapt and invest in the customer experience, convenience remains king, especially when it comes to amenities like the ability to accept remote payments, says Andy Bizub, owner and chief strategy officer for Midwest Performance Cars. 

Whether utilizing an online portal, a texting system, or some other software, Bizub sees the implementation of new technologies as a pivotal step for repair shops. 

“The auto industry is behind the times in a lot of ways,” he says. “I’m trying to push that along and do what I can to get the industry up to speed.” 

But with convenience comes a caveat or two. Shops branching out with amenities like remote payments need to be careful in how they collect those payments to protect their operations, Bizub says. 

The Backstory

As the owner of a high-performance repair center, Bizub will often get requests for pre-purchased inspections from customers who are going to send their vehicles to him. So for years, Bizub’s shop has been taking payment information over the phone. 

For a majority of that time, Bizub never ran into many issues. But within the last five years, he’s seen a massive increase in credit card fraud and in chargebacks that he says almost always end up siding with the customer, despite evidence of legitimate work being done. 

The Problem

Bizub clearly recalls one situation that led him to change the shop’s process. The shop received a pre-purchased inspection of a Porsche owned by a real estate agent in Florida. The shop did the work, sent the car back, and documented the entire process. The customer submitted a chargeback request and American Express chose to side with the customer, despite seeing the proper documentation. 

“It’s crazy. We’re guilty until proven innocent, but the credit card companies don’t care,” Bizub says. “If it’s an American Express charge, you can forget about it. You’re not getting it back.”

But Bizub didn’t want to stop remote payments altogether. He’s seen the added convenience that it gives customers and it’s a necessary part of his business model. The challenge became finding a way to continue remote payments without having to worry about chargebacks. 

The Solutions

Invest in a system.

What Bizub hadn’t done, and he sees too many shops continuing not to do, was invest in technology that will protect the shop from fraud. About two years after the Florida incident, Bizub set out to find an online e-signature service that would allow the customer to approve repair work remotely and would also be legally binding and documentable for the shop. That was a step he’d missed before—there’d been no paper trail to go back to to prove that the customer approved the purchase. Taking credit card information over the phone is hard to track and easy for the customer to call fraudulent. 

Bizub landed on Adobe Sign, however there are many other services that offer the same protections for similar prices. 

Through the system, Bizub sends the customer an invoice that they sign and send back. Then, the customer also needs to fill out a credit card authorization form. Finally, the shop will then send back an invoice showing a zero balance and that the payment has been processed. Through the process, IP addresses are tracked and timestamps are recorded to ensure the shop is legally covered. 

“It sounds more complicated than it is,” Bizub says. “But it’s just three components and it’s a lot less steps than having to contest a chargeback.”

Bizub is quick to point out that just because there are some additional items, it doesn’t take much time at all. It may add one or two more steps to every purchase, but it’s an important step to ensuring the business is covered. And avoiding remote payments altogether isn’t a solution either. It would be a mistake to do so with the way the industry is trending, Bizub says. 

Understand your customers.

Despite using the system, Bizub will still accept remote payments over the phone for longtime customers. Bizub prioritizes a relationship-based shop, so for customers that Bizub has worked with several times and knows well, he won’t make them go through the process. But for any first-time customers, they will always go through the e-signature process. All of the chargeback issues Bizub has ever dealt with have been first-time customers. 

And with established customers there are still safeguards. Any work over $2,000 requires a deposit and the vehicle won’t be released until the full payment has gone through. Bizub also offers text-to-pay for both types of customers, another piece of added convenience that is trackable. 

The Aftermath

Bizub has not had any issues with chargebacks since he began using the e-signature service. He hasn’t received complaints from customers and he sees it as another step forward for the industry. 

Bizub laments the auto industry’s lack of progress. He sees remote and online payments as a way to progress. 

“We always try to meet our clients in the place they want to be met,” Bizub says. That includes picking up and dropping off vehicles remotely, which requires the use of that e-signature. 

Now with a taste of that technology, Bizub is going a step further. He is currently researching the possibility of accepting BitCoin and other alternative types of payment at the shop. 

“The way the industry is going, it’s going to bifurcate. Shops that do offer these services will thrive, while low and middle-end shops are going to be hollowed out,” he says. 

The Takeaway

Dealing with chargebacks is a time-consuming and onerous process, one that can push shops from taking any type of remote payment entirely, Bizub says. But in his mind, if shops want to succeed moving forward, convenience is key. And being able to take payments remotely, whether through an e-signature service, an online portal, or through text will become increasingly important.

So in order to capitalize on that convenience, but also protect the shop from fraud, Bizub advises that shops invest in an e-signature service. But it isn’t a rigid system. Just like other parts of the business, processes can be shifted for longtime and trust customers. The technology can be put in place without losing the mindset of a relationship-based shop. 

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