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More On Merchant Accounts and Credit Card Processing
October 4, 2009 | Leave a Comment
Anybody planning to accept credit cards for his business will profit from good knowledge not just about his merchant account but particularly on things that he’ll be dealing with once he actually starts using it. While it’s vital to know the ins and outs of this account, it will still be transactions that happen on a daily basis that will be needing the most attention.
Once you have secured an account to use for accepting credit cards, that will stay with the bank and you won’t have to change anything about it. Every day transactions, however, that involve credit card processing fees, reversals and other day-to-day activities are what every businessman must take the time to study.
If you’ve just begun taking credit card payments, remember that credit card processing fees will not be returned to you when an item bought by your customer is returned. Many businessmen have been debating about this. They assert that additional fees must instead be charged for such reversal of transaction.
Yet, fact remains that there will be no reversal of processing fees simply because when that happens, the banks will be losing funds which they obviously don ‘t really want to happen. It also has something to do with the reality that the banking system was not designed to process such reversals. Although this possibility may well be explored given all available technologies, there simply hasn’t been any major effort to take this issue beyond argumentation.
However, there’s still a way for you to recover what you lose simply by charging a return fee. To ensure transparency with your customers, you have to inform them that you charge such a fee for returned items. You can do this by printing such notice on your sales receipts or in your website where you can be sure it will be easily visible. This fee must be accurately calculated as a percentage of the original amount of purchase made. What most merchants do is add the qualified discount rate with non-qualified surcharge.
A reasonably priced return fee is anywhere from four to five percent depending on whether you have a card-present or card-not-present account. However, when charging a return fee, it’s important that the merchant charge such the fee for all types of transactions, whether payment is made through cash, check or credit. This is part of standard merchant service procedures discouraging discrimination against customers who pay with their cards.
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