Rental Merchant Best Practices
Key Issues
- Methods of Acceptance
- Avoiding Chargebacks
- Qualify for the Best Rates
- Protecting Cardholder Data
1. Accepting Cards - two primary methods It's a business decision and the key is how clearly your payment policies are stated in your Rental Agreement.
Run Sale Transactions
• Rental contract states the $ amount to be charge at time of rental delivery or pick-up.
• Card is swiped and authorization approval received with a signed sales draft with a settlement of funds deposited to your bank account.
• At equipment return, either a second sale is made or a credit is issued for the difference.
Tips:
[ Always best practice to swipe the card for greatest security and lowest rate ]
[ Important that your fee structure is set up for Net billing, not Gross billing, so discount fees are returned on credits ]
[ Benefit of this method is you get your $ sooner, you earn the float, and you lower your processing expense by qualifying for the lowest Interchange Rates ]
Pre-Authorization
• Obtain a “Pre Auth” for the $ amount as stated in the rental agreement.
• At equipment return, run a new final Sales transaction by swiping the card.
• Only if the new Sales transaction is declined – then use the “Pre Auth” to “Force” the transactions
Tips:
[ Qualify for the lowest Qualified Interchange by - 1) swiping the card to capture the mag-stripe data – 2) getting an electronic auth (vs. keying the “Pre Auth”) – 3) having the authorization and settlement $ amounts match ]
[ Only process a “Force” transaction for a $ amount <= the $ amount of the “Pre Auth”. Run a second Sales Transaction for any overage. ]
[ If the Transaction $ and the original Auth $ vary – the transaction will downgrade to a higher Interchange ]
[ The best Visa rate a Force transaction can qualify for is EIRF Interchange due to a “key entered” authorization code ]
2. Avoiding Chargebacks
Cards are a convenience form of payment – not a guaranteed form of payment An Authorization does not guarantee 100% protection if:
• You do not obtain a card imprint
• Cardholder does not sign your rental agreement
• Other dispute related issues
Chargebacks can occur due to:
• Customer disputes
• Fraud
• Authorization issues
• Inaccurate or incomplete transaction data
Chargebacks are subject to specific time limits so respond quickly and with full documentation.
• Key documentation includes:
• Signed Rental Agreement & Card Receipt
• Swiped or Imprinted Card (not a photocopy)
• Valid Authorization Code
Chargeback reason codes
• 30 – Services not provided or merchandise not received
• 60 – Requested copy illegible
• 71 – Decline Authorization or No Authorization
• 74 – Late presentment – Rental date is more than 30 days before the payment transaction date
Tips:
[ Vantage provides an online merchant account management tool so you can monitor your activity and manage retrievals and chargebacks ]
[ Ex. Watch for accepting cards not belonging to the customer – using a business partners card, another employees card, a family members card ]
[ Best Practice – check photo ID, match the credit card to the photo ID ]
[ Best Practice – check signature on back of card with signature on Rental agreement ]
[ Best Practice – make an imprint of the card to prove the card was present and attach to your Rental Agreement ]
[ Your Rental Contract is the primary tool for protecting your interest ]
[ Prefer a business model of card present transactions for lower rates and lower risk ]
[ Know your customer ]
3. Qualify for the Best Interchange
The right solution and method of acceptance
Understand Interchange
• Card Type (MC/Visa), Charge Type (credit, debit, rewards, corp), method of acceptance (swiped, keyed)
• Eliminate Mid & Non Qualified Rates
Reduce Fees
• Bankcard math & billing structure
• Difference between billing on Interchange vs. Tiered rate plan
• Difference between billing per Authorization vs. per Settled transaction
• Difference between billing on Gross sales vs. Net sales
No Terminal Equipment Leases
No introductory offers
• Avoid the * rates as low as
• Don't sign a 3 year; early termination fee contract
4. Payment Card Industry Data Security Standard (PCI DSS)
No presentation would be complete in today's environment without mention of payment security
Storing cardholder data securely is critical and security best practices must be followed to minimize exposure to financial and legal risk of compromised data
Account number truncation with no expiration date on cardholder receipts
Cannot store mag-stripe data or CVV2 codes
12 requirements:
• Maintain a Firewall
• No default passwords
• Encrypt cardholder data on your network
• Restrict access to data on a need to know basis
• Restrict physical access to data
• Maintain a privacy & security policy
See www.vantagecard.com/resources for more PCI compliance
|
