Frequently Asked Questions
Leasing credit card terminals is rarely the right decision. You end up paying 4-5 times the cost of the terminal when you lease. Sales reps make a large commission when they put you in a lease. Terminal costs range from $150-$400 in price. You cannot get out of these lease contracts in a cost –effective manner once you sign.
Effective rate of acceptance is the best way to evaluate what you pay for merchant account fees. Most merchants look at one or a couple of rates they are paying as their rate. The true measure is “effective” rate, which is calculated by dividing total fees by total credit card sales. From this we can see if your effective rate is within the correct range for your industry & merchant type.
Encourage you customers to pay by debit card whenever possible. Debit cards have the lowest fees. Rewards and corporate cards are the highest.
Always make sure to put in the customers billing address when performing “keyed” transactions. This will help you avoid extra “downgrade” fees.
Make sure you are settling/closing your batches within 24 hours to avoid being charged “downgrade” fees. Set up your terminal for “auto batch” as a backup in case you forget. Auto batch is not recommended for restaurants that adjust their tips.
Avoid unnecessary authorizations on your customer’s credit card. Authorizations or “holds” will take 5-10 days to fall off a customer’s credit card. The exact amount of time depends on the bank that has issued the credit card account to your customer.
To properly protect yourself against charge backs or disputes you need to maintain good evidence for your transactions. This includes a signed purchase agreement or contract that has explicit details of the product or service you are providing. You also need a signed copy of a credit card authorization. This can be a signed credit card receipt or a signed credit card authorization form. These are the critical pieces of evidence you will need to provide when a dispute arises. You need to be aware of the time frame you are given to respond by when you are given a charge back notice. You will automatically lose if you don’t respond by the required time.
Customers typically have 6 months from the time of the transaction to dispute a transaction. Some cases can be longer depending on what is involved with your product and the warranties that you offer. Keep your transaction evidence in a safe place for the time frame you deem necessary based on your fraud prevention plan.
Make sure you have a plan for PCI compliance and keep up to date with your processors PCI compliance program/requirements. This will keep you educated on how to best prevent breaches as well as minimize non-compliance fees.
Contract terms vary with every processor so make sure you understand your obligations. Be aware of the terms of each agreement you sign.
“Brian helped several of my clients reduce their fees and solved their technology challenges. I never hesitate to recommend him to my clients.” – Melva Copley, President of Office Support Services (OSS)