I can explain for both. Because VISA/MC both want to have an many authorizations go through as possible ($$$) they have many different methods of processing a card. Whether a Card Verification Code (CVC) or Card Verification Value (CVV), VISA/MC have a special authorization program to all merchants in a card present/face to face environment to process transactions when faced with a demagnetized card. Instead of swiping the card, the merchant will manually key in the card number, expiration date and three digit code on the back. If an authorization is obtained, the merchant has the same protections as any other card present/face to face transaction.
With EMV cards, the chip should be the first attempt, the mag stripe second (using a technical fallback transaction) and the manual entry third.
And to answer the question asked, yes you will always be on the losing end of transactions processed using this authorization method.
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