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Rules for Your Merchant Services
In order to maintain a credit card processing account in good standing, there are some rules you need to follow. These will be spelled out in detail in any agreement that you sign; however, it's a good idea to be familiar with the most important ones before you even begin. Though all agreements are not exactly the same and may involve terms and conditions that are not spelled out here, this article attempts to cover some of the basic issues that businesses sometimes forget to honor.
Rule #1:
Do Not Discourage Credit Card Use
Essentially, merchant service companies want to make sure that you are not preventing or trying to discourage your customers from paying with a Visa, Master Card or American Express at your place of business. While it is acceptable to offer them a discount off the regular price of an item or service for paying with cash, it is not acceptable to charge extra fees for credit transactions. You may not set minimums on those purchases, either. Merchant banks want to make sure that they are going to make money off your business, and discouraging the use of plastic payment will cut down on their profits. That's a big no-no.
Rule #2:
Post Appropriate Logos & Signage
Whether you choose to accept Visa and Master Card, or add American Express, Discover, and Diners Club into the mix, your service provider will send you a set of appropriate logo stickers and signage to place in your brick and mortar business, on your website, or in your catalog. These logos must be used. This is another situation in which the MSP is protecting itself – making sure that clients of yours are aware that credit cards are welcome. However, this is also beneficial for your bottom line, since some potential purchasers will leave if they do not see signs noting that their payments will be accepted.
Rule #3:
Use Due Diligence in Examining the Card
Also for both your benefit and the benefit of the MSP, this rule requires you to make every effort to ensure that you are accepting only valid cards from the people who are authorized to use them. This will minimize chargebacks and fraud, protecting your profits and your reputation as a reliable company. Things to verify include signature, a second form of identification, the expiration date on the card, and sometimes the user's zip code. Online, you will ask for the CVV code as well.
Rule #4:
No Cash or Check Refunds
If the original purchase was made with a Visa, MasterCard, American Express, or Discover, the refund must be given the same way. That way, the merchant company has proof that a return was made, preventing a chargeback for a sale that was already credited. It also prevents bad customers from using your store for cash advances – basically, trading a credit card payment for cash.
Rule #5:
No Processing for Others
With a merchant agreement, you are absolutely not permitted to process or swipe transactions for another business or individual. You should only handle cards directly from your own clients. Doing otherwise is considered laundering money, and violates the terms of any merchant agreement you may have.
All of these rules are very simple to follow. They also protect your business, in addition to the company providing you with merchant services. If you ever have any questions about being compliant with your agreement, you should contact your representative immediately for clarification and further assistance.
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