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FOUR RULES THAT RETAILERS
MUST FOLLOW REGARDING CREDIT CARD
PROCESSING
At first sight the
procedure of accepting credit card
payments from your customers seemed very
simple. You swipe the customer’s card to
process his payment for which your
account provider will charge you some
fees. If you think like this then you
are one among those many merchants who
has not read the agreement carefully.
This may cause serious problems for you.
Several thousand business
owners violate merchant account
agreements regularly without even
knowing it. Unfortunately, this will
jeopardize their merchant accounts. If
there are many complaints against the
merchant that are filed with the issuer
then the issuer will terminate the
merchant account. Given below are four
rules that must not be broken by any
merchant.
1)
“Minimum and Maximum Charges”
Several retail businesses don’t accept
credit cards if the bill amount if lower
than or exceeds a certain amount. This
is understandable and may be necessary.
For example, a customer’s total bill
will add up to just some dollars, which
if processed by credit card will make
the transaction unprofitable because of
the fees charged for every transaction.
In contrast, the ceiling imposed on the
amount that can be processed using
credit card is a security against
possible fraud. However, both these acts
are violating your agreement with the
merchant account provider.
2)
Adding Fees
You will be tempted to charge some extra
fees from you customers when they pay
using a specific type of card. This is a
common phenomenon with small retail
shops. They do this to recover the fees
that are charged by the bank. Charging
such extra fees is a violation of the
agreement that you have signed with your
account provider.
But, this rule has to be looked in more
detail because the agreement allows you
to charge a convenience fee to your
customers for certain kind of
transactions. If your customers want to
pay using their credit card for a
certain thing which you don’t allow then
you are permitted to charge the
convenience fee. The circumstances where
you are allowed to charge such a fee
differ with different companies.
Therefore, you should look at your
agreement very carefully so that you
don’t violate the terms and conditions.
3)
Refunding Cash
This happens more often than you expect.
Many times customer’s will buy some
goods and make the payment through
credit card. But later, when they don’t
like the product and come for a refund
they ask for cash. The merchants will
also agree to it because they think it
is not wrong, which is false.
Refunding customer’s in cash will not
only violate the rules but will also
expose you to fraud. Therefore, avoid
giving refunds in cash.
4)
Making the choice of Payment for your
customer’s
The fees for processing credit cards
vary widely between credit card
companies. Visa will charge different
rates and fees than Amex. Similarly,
MasterCard will charge differently than
Discover. The merchants will try to
influence customers to choose a certain
kind of payment option to reduce their
fees which is a violation. |
