Merchant Account Best Practices

 

There are a few things that you need to be aware of when beginning to accept credit cards. Below is a list of do's and don'ts that can help protect you from losing your merchant account and /or being fined.

 

A decline is a valid response the decline is from the bank not your merchant services, do not get a voice authorization you will be circumventing the approval process, ask for another credit card.

 

Don't run your personal credit card through your own merchant account or use it to provide cash to yourself or a friend.

 

Don't place minimum or maximum limits on your transactions. Regulations stipulate that if you are going to accept credit cards, you must accept them for any transaction.

 

Don't charge any sort of usage fee for credit card transactions to offset the cost of accepting credit cards.

 

Don't split a transaction into smaller transactions. You may open yourself up to a chargeback.

 

Don't request a credit card to guarantee a check.

 

Verify the identity and expiration date on the card.

 

Truncate the account numbers on your receipts. Each state has its own laws governing what can and cannot appear on the receipt.

 

Take every measure possible to prevent duplicate transactions.

 

Read your merchant agreement. It outlines all the various fees and charges, as well as specific rules and regulations that you need to be aware of.

 

Make resolving customer issues a priority.

 

Take advantage of the variety of fraud screening products and services available to merchants.

 

Ensure that old merchant accounts are properly closed and terminated.

 

Maintain the proper account for your business. Trying to process Internet transactions with your retail merchant account can lead to serious fines and even the loss of your merchant account.

 

If you know you are going to handle a promotion that triples your normal monthly sales volume, notify your Merchant Services Provider because uncommon sales volumes can raise flags. If you don’t they may completely shut you off from doing business or withhold all or some of your funds in "reserve" to help cover the potential risk. When the Merchant Services Provider places a hold on your funds it may be several months before those funds are released to you. There are some Merchant Services Providers that would terminate or de-activate the account immediately, which could cause a Merchant real problems when dealing with a high period of sales.

 

Swiped Transactions

 

The lowest rates apply to swiped transactions.

 

Card present transactions and a signed sales draft may minimize chargebacks.

 

PIN-based debit cards offer the greatest savings on transaction fees.

 

Have the customer sign the receipt. Then compare the signature with the signature on their ID card.

 

Make sure the receipt is only printing the last 4 or 5 digits of the card number on the receipt.

 

Publish a refund policy. Place it around your cash registers, print it near the signature line of the receipt and put it on your website. Take every step possible to make sure that your customers know that they can return merchandise and what the policies and procedures are. When you issue a credit, only issue the credit to the same card that made the original purchase.YOU CAN NOT GIVE CASH OR CHECK REFUNDS FOR A CREDIT CARD PURCHASE or CREDIT A DIFFERENT CREDIT CARD.

 

Not using a storefront or retail counter - Use a wireless terminal like a cell phone; they're great for trade shows, door to door sales and service, and mall kiosks.

 

Use a credit card terminal, a PC swiper for retail storefronts, professional office, or other point of sale locations.

 

Phone, Fax, or Mail Transactions

 

Use and ship to address confirmed by the Address Verification System (AVS) - this is the only known verified address to authenticate.

 

Get the cardholder’s name and the card number, the card’s expiration date (make sure it is in the future) and the card ID - the CVC2, CVV2 or CID number, located on the back of the card (or on the front for American Express cards). The card ID serves to ensure that the customer is in possession of the card.

 

Non-Matching Cardholder information - If the shipping address differs from the billing address, follow-up with a phone call or an email to verify the order. Be sure to ask for a phone number in your order form.

 

Use card industry merchant tools - Verified by Visa or MasterCard SecureCode.
Do not use voice authorizations. They bypass the processors’ systems and cannot be used as supporting evidence in chargeback representments.

 

Each deposit should refer to one authorization. Do not use forced authorizations.
Ship within seven days of authorization. Otherwise you should obtain a new authorization.

 

Deposit transaction receipts within three days of the transaction date. For card-not-present transactions, the transaction date is the ship date, not the order date. Transactions deposited more than 30 days after the original transaction date may be charged back to you.

 

Use the same transaction ID returned from your authorizations for your deposit and refund transactions. This eliminates deposits of refunds where authorizations have not been performed and can substantially reduce fraud.

 

e - Commerce

 

Call customers to unusually large transactions, to verify free emails services, or non-matching billing information.
Use and ship to address confirmed by the Address Verification System (AVS) - this is the only known verified address to authenticate.

 

Get the cardholder’s name and the card number, the card’s expiration date (make sure it is in the future) and the card ID - the CVC2, CVV2 or CID number, located on the back of the card (or on the front for American Express cards). The card ID serves to ensure that the customer is in possession of the card.

 

Non-Matching Cardholder information - If the shipping address differs from the billing address, follow-up with a phone call or an email to verify the order. Be sure to ask for a phone number in your order form.

 

Use card industry merchant tools - Verified by Visa or MasterCard SecureCode.

 

Each deposit should refer to one authorization. Do not use forced authorizations.

 

Ship within seven days of authorization. Otherwise you should obtain a new authorization.

 

Deposit transaction receipts within three days of the transaction date. For card-not-present transactions, the transaction date is the ship date, not the order date.

 

Transactions deposited more than 30 days after the original transaction date may be charged back to you.

 

Use the same transaction ID returned from your authorizations for your deposit and refund transactions. This eliminates deposits of refunds where authorizations have not been performed and can substantially reduce fraud.

 
 
 

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