RETAIL CREDIT CARD PROCESSING

When you start accepting credit card payments from your consumers, at first the process seems simple. For processing the credit card payments of your consumer, your credit card service provider will charge you certain fees. However, if you are a small business owner, take some time to read the whole agreement issued by the merchant account provider. If you cease to do so, you may face a few problems in the future.

A large number of business owners violate their respective agreements without knowing why they are doing so. This could jeopardise their merchant accounts. If several consumers complain about the merchant for recurring violations, the merchant may be asked to close the account. Following are a few rules that you should not break with respect to retail credit card processing –

-       Maximum and minimum charges – There are a number of retail business owners who do not process payments made by credit cards, if the transaction is higher or lower than a specified figure. The reasons for imposing maximum and minimum charges are completely understandable. For instance, if a consumer’s purchase is for a small amount, the fees generated for processing such payments makes the transaction non-profitable. However, if a maximum charge is imposed, it acts as an added security level against fraud.

-       Adding fees – You may sometimes get tempted to make your consumers shell out additional fees for buying a product or service using a particular kind of credit card. Small retailers usually implement this. This is done so that they can recoup the amount they are charged by the issuing banks. Charging additional fees is violation of the provider’s agreement. But, this rule certainly deserves clarification. Retailers can charge their consumers with a fee at certain circumstances. If traders are offering their consumers the convenience of making use of their credit cards for making payments and this is something they do not normally provide, they can chafe a fee to their consumers. This may seem a little confusing. To make matters worse, all the major issuing firms such as Master Card and Visa have a different definition for “convenience fee”. Therefore, it is important to check the agreement so that you are in compliance with it.

-       Refunding cash – More often than not, refunding cash takes place. A consumer will buy a product using his or her credit card and may return it and ask for refunding. However, the consumers usually ask the retailers to refund the purchases in cash instead of crediting it into the card that was used for making the purchase. This cannot be done by retailers as they do not consider it as a financial risk or violation. This is untrue. It violates the provider’s agreement as well as gives an opportunity for the occurrence of fraud.

There are many such factors that need to be considered for retail credit card processing. Remember, accepting the credit cards of the consumers and processing the payments is very critical to a business and hence it is essential to be in compliance with the agreement.