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Understanding Credit/Debit Card Chargebacks

October 6, 2020 by salessensepayments Leave a Comment

Understanding Credit/Debit Card Chargebacks

You will find chargebacks on your merchant processing statement when a customer asks their financial institution to refund their money for a purchase or if your customer’s bank sees a problem with a transaction. If you have refused to refund your customer’s money directly, the customer has the right to go to their card provider and take their money back.

Another way of looking at it is that it’s a forcible refund even when the customer has nothing to return to you but you are required to return their money.

As a merchant, you want to avoid chargebacks at all costs (pun not intended) because of associated fees between $20 and $100 per chargeback. If your business incurs a large number of chargebacks, compared to your total monthly credit card transaction amount, your processor can elect to close your account or assess larger per-transaction costs to counteract the chargebacks.  

Customer Chargebacks Process 

Customers typically file a chargeback (or dispute a charge) with their financial institution between 60 and 120 days from the purchase date. Once the chargeback is filed, the affected merchant has 45 days to reply if they disagree with the charge. After the merchant responds to the chargeback, the merchant bank investigates the claim and determines the outcome. If necessary, arbitration may be called in to mediate the dispute, lengthening the chargeback resolution process.

Each credit card provider has specific rules and timeframes for disputes. If you incur a chargeback claim against your business, become familiar with the company’s – American Express, Mastercard, Visa or Discover – requirements.

If the chargeback is determined to be valid by the bank, you (merchant) are asked to provide proof of the claim so the bank can refute the chargeback on your behalf. If your proof is substantive, the chargeback is removed from your account and the customer charge stands. 

If the bank decides the customer’s chargeback claim is accurate, and your documentation doesn’t substantiate your argument, you as the merchant must refund the customer’s money along with a chargeback fee assessed by the bank. 

Avoiding Chargebacks 

You can avoid credit card chargebacks by strictly observing the guidelines and policies of the principal payment processing systems. Handy links to the chargeback guidebooks for Mastercard, Discover, Visa and American Express are at the bottom of this article.

Summarizing guideline best practices:

  • Check the expiration date of the credit card proffered and decline it if beyond the expiry date
  • Ask for proof of a customer’s identity for in-person transactions. In non-COVID times, ensure the customer signs the receipts and your business name is printed on their receipt
  • Verify the signature on the credit card used for a purchase
  • If activated, capture the customer’s signature electronically, then compare to the signature on the back of the card
  • Never accept unsigned credit cards for payment
  • Stay up to date with all current credit card security standards such as enabled chipped card readers
  • Ensure that employees who accept payments follow these best practices

However, the reality is your business accepts credit card payments, it is almost unavoidable that you will also have occasional chargebacks. When you are notified of a chargeback, diligently research and provide the requested paperwork within the specified timeframe. Also work inside your business to understand why that chargeback occurred in the first place and create a policy or rule to prevent a similar situation in the future.

The most common chargeback reasons, according to Visa, are:

  • The merchant did not process a credit in the timely manner the customer expected
  • Ordered products were not received
  • A paid-for service was not accomplished at all or to the customer’s satisfaction
  • The charged customer did not make the specific purchase; it is a fraudulent charge
  • There were authorization issues in processing the transaction
  • An error in processor occurred

Merchant Protections and Rights with Chargebacks

In this day and age, merchants have few protections available to fight chargebacks. Even a No Refund policy isn’t sufficient to protect your business from chargebacks; the Fair Credit Billing Act says customers can still file chargeback claims.

Clearly display your policies in your storefront or online and ensure that your customers are familiar with your transaction requirements. This is a key protection if a chargeback goes through arbitration and helps your business refute a chargeback.

In general, banks tend to side with the customer rather than the merchant in chargeback disputes. This makes it imperative for you as a merchant to make sure your transactions and sales are thoroughly documented and validated, conforming to the guidelines and rules published by the major institutions.

Links to chargeback guidelines:

Visa
Mastercard
American Express
Discover

For more information about how to avoid chargebacks and effective Point of Sale systems for your business, contact SalesSensePayments.com, Mike Krause, 585-704-6453.

To your health,

Sales Sense Payments
585-704-6453
mike@salessensepayments.com
Please visit SalesSensePayments.com for more information.

Filed Under: Uncategorized

Getting Comfortable with Digital Meetings and Presentations

May 18, 2020 by salessensepayments Leave a Comment

Getting Comfortable with Digital Meetings and Presentations

Like it or not, most business people now have experienced meeting virtually because we cannot get together around a conference table safely. Digital meetings and making presentations remotely is another part of the technology revolution we’re deeply involved in. And thank goodness, right? If we didn’t have methods to conduct business electronically at the moment, commerce would be even more stalled than it is. 

Digital meetings and presentations are much more cost-effective than traveling or convening a group of people in a single location for an hour or two. These might include sales webinars, training sessions, virtual conferences or presentations between supplier and customer. 

The trick is to make the transition to virtual meetings smooth and professional. In-person meetings let you watch body language, facial expessions, side conversations and attention spans. These are mostly absent in a digital forum unless everyone has their camera on. And even then, your eyes can’t be watching all participants and pay attention to your presentation at the same time. 

So here are a few tips to help you get comfortable with making digital presentations and participating in virtual meetings. 

Prepare for your virtual meeting
Just as you would prepare for a face-to-face meeting, get your materials organized, create your presentation deck and become very familiar with the functions and features of the presentation system you will be using. Each system has unique features and you must know how to move smoothly through the process, how to unmute participants, how to switch presentations and so much more. Some even have a “blur” setting so you can obscure your background or have a picture of a nice beach or sunset behind you. 

You really cannot take a presentation you have made in front of a live audience and simply share it digitally. The results will not be the same and probably not well received. Your interactions with a remote audience are limited so your visuals must reinforce your message well. 

Practice your presentation using the presentation system beforehand so you work out any tough spots. 

Send the login information, including the URL, password, call in numbers and an agenda, at least one business day in advance so they have the information needed. If it’s the first time with this group of participants, suggest they log in a few minutes early in the event they have to download an app and test connectivity before the actual start time of your meeting. 

Be Engaging, Stay Focused
Don’t skip the early call pleasantries – you need to engage in a little chitchat to help put people at ease and reacquaint them with your voice and speech cadence. Do a little housekeeping by asking participants to put their questions in chat or raise their hands. Explain how the call will go briefly and ask for their agreement. To keep people engaged and paying attention, you might want to ask questions during your meeting but avoid tough questions or ask a particular person so you don’t have a long period of dead air followed by several people trying to talk at once. 

Don’t try to pack too much into your meeting. Keep your topics to no more than two. Otherwise you may confuse or “turn off” your audience. If the call is longer than one hour, give participants a 10 minute bio break. Adults don’t sit for long periods of time well; their concentration and focus strays easily.  

Think about your clothing and stay neutral – no plaids or stripes that cause video jitters. Be dressed as you would in a face-to-face meeting: if the customer usually dresses in business attire (tie, suit jacket) then mirror that as you present.

Stay fully focused on your presentation and participants throughout the meeting. If you sound or act distracted, that will come across to your attendees and you will lose them. Iron out any technical issues well before the meeting begins, asking new participants to log in as much as 15 minutes early so you and they can ensure smooth connectivity. 

Digital Meeting Etiquette
Here are some quick reminders for what to do and what not to do whether you’re the presenter or a participant in a digital meeting. 

Be polite, attentive and respectful to all participants and speakers
Speak clearly and a little bit more slowly, near the microphone
Slow down your presentation slightly to allow for comprehension
Keep body movements to a minimum if you are on camera
Keep your microphone on mute unless you are asking a question or presenting content
Move and gesture slowly but naturally
Maintain eye contact by looking in the camera, not at your notes
Keep the session interesting with mild jokes, quips, cartoons, asking softball questions
Relax and enjoy the session
Smile even when you’re not on camera – your pleasant demeanor on or off screen still communicates to your attendees 
Avoid making distracting sounds – tapping a pen, jingling change, sniffling, laughing loudly, shuffling papers, clanking bracelets or jewelry
Never shout or whisper – keep your voice at a normal tone 
Try to not interrupt other speakers or participants – the audio lag can be a problem with this
No side conversations on mute or by covering the microphone – people can hear the slightest sounds and they are quite aware of what you’re doing

As you do more digital meetings and presentations, your natural personality and abilities will make them a snap. Give them a try!

Stick with the CDC for Health Info and Reopening Guidelines
Click here to read more best practices from the Centers for Disease Control and Prevention. Wear a mask in public. Stay home, slow the spread. Flatten the curve.

Stay home, stay healthy and safe!

Mike Krause
Sales Sense Payments
585-704-6453
mike@salessensepayments.com
Please visit SalesSensePayments.com for more information.

Filed Under: Uncategorized

Do Merchants Benefit With Groupon?

May 18, 2020 by salessensepayments Leave a Comment

Groupon and others such as Get My Perks have enjoyed a lot of popularity especially with cost conscious consumers over the last decade. Certainly, everyone loves to save money on restaurants, amusement activities and other retail stores. But how do these deep discount deals affect the merchant behind the offer? It depends. 

Benefits of Groupon Offers

1. Customers love them. Groupon offers attract new customers to you by appealing to bargain shoppers who are willing to pay but want to save money at the same time. Groupon promitions can be a benefit as long as the promotion does not sacrifice sales to existing customers, who are willing to pay full price for your products or services. It’s important to make these promotions a part of your overall marketing plan, side-by-side with your Google Adwords, Facebook, Twitter, Instagram and other social media platforms.

2. Offers build business awareness. Using Groupon lets consumers learn about your business and attract new people to your products and services.  Hopefully they’ll be so impressed with your offerings at 50% off that they will return without the discount. The key here is to attract new people as well as increase your conversion rate for repeat visits.
3. Move slow-selling inventory. You might use a Groupon deal to move slow selling products or promote little-known services. Discounts such as these seem to be most successful for merchants with a low cost of goods sold. Use a bargain price deal for a product or service that isn’t very pricey to you.
 
4. Build relationships with customers. Rather than offering a one-time buy, make the offer a sequence of buys: $20 worth of product for $10 times three visits, rather than $60 worth for $30. Same value but it builds the habit of coming to your business on multiple occasions. Or offer discounts on specific products and services rather than on the total bill or invoice. Keep them coming back for more!
5. Generate additional revenue. If your business has a fixed cost structure, promotions can help you make more money by attracting more people than you would usually have. For example, a miniature golf course business. The owner’s operating costs don’t change much based on the number of customers using the course. Setting up a coupon promotion brings in extra cash by getting more people to come play mini-golf. Customers pay $10 for three rounds (rather than $15) and the owner still makes a profit. It’s imperative for this to work that you know your costs and can set a coupon price to attract customers and stay profitable.

Disadvantages of Groupon Offers

1. Deals bring out bargain shoppers. Since Groupon’s whole premise is low cost, the customer base is in the habit of only looking for bargains and may not be willing to purchase without the deep-discount coupon as incentive. Therefore, you may see low levels of spending with commensure low rate of return. To counteract this, put an upper cap on the number of coupon deals you are willing to sell at the reduced price.

2. Deals can tarnish your brand. People preoccupied with price aren’t buying what you’re selling for brand. And they’re not ikely to stick with you for because of your brand either. When people get a brand at a deep discount one time, they are much less willing to pay full price in the future.
 
3. Deals don’t encourage repeat customers. Historically, Groupon deals have a low rate of conversion for repeat customers, roughly 20 percent of customers will return, depending on the product or service. You may never see that customer again unless they have another coupon.
4. Deep discounting is not profitable for a merchant. Groupon keeps 50% of the sales revenue from each promotion. This means you need to gross a margin in excess of 50% to make Groupon work for you. If a business is built on a 75% margin and customers merely visit and get the Groupon deal, the merchant loses money. You must be able to offer a typical deep discount, pay 50% to Groupon and still make something from the deal for it to be reasonable.

5. Look for better deals. Daily deals, like Groupon coupons, are not the only game you’ll find. You can easily run a similar promotion such as a discount on your business Facebook page, Instagram or through Twitter. Cheaper, better returns and you’re not giving away 50% off the top. 

Discount doom? 
Not necessarily but you must be very careful with Groupon-type promotions. There are many ways to get creative and attract new customers. Want to know more? Contact Mike Krause at Sales Sense Payments for some targeted brainstorming to help you promote your business and not give away your profits!


Stick with the CDC for Health Info

Click here to read more best practices from the Centers for Disease Control and Prevention. Wear a mask in public. Stay home, slow the spread. Flatten the curve.

Stay home, stay healthy and safe!

Mike Krause
Sales Sense Payments
585-704-6453
mike@salessensepayments.com
Please visit SalesSensePayments.com for more information.

Filed Under: Uncategorized

Combat Covid with Contactless Payments

April 29, 2020 by salessensepayments Leave a Comment

Combat Covid with Contactless Payments

Making a payment by tapping – a contactless payment – provides consumers all over the world a more sanitary and streamlined way to pay for purchases, preventing contact with potentially contaminated public surfaces.

While secure contactless payment processing has been around for several years, the technology is slowly getting adopted by consumers. Here’s a brief overview to explain and foster greater use of secure contactless payments in the US and worldwide.

What is a contactless payment?

A contactless payment uses wireless, encrypted technology to transmit payment information from your electronic/digital device or enabled card to the merchant’s point-of-sale terminal without any physical contact. Contactless payments are quick, secure and easy to make. Consider the alternatives of handing someone your credit card (or inserting it yourself in a public card reader used by hundreds) or cash, which is notoriously dirty.

There are numerous electronic devices these days that you can use to make a contactless payment: your smartphone, a contactless-enabled credit or debit card (look for the contactless payment symbol, usually on the backside of your card), a smartwatch or other wearable technology. With these, simply tap the device over the contactless-enabled device over the payment terminal.

The transaction is almost instantaneously processed securely and there is no contact between people or possibly contaminated surfaces.

What’s going on behind the transaction?

When you initiate a contactless payment, a secure signal transmits your payment data directly to the payment reader, using Near-Field Communication, abbreviated NFC. The contactless payment devices have an NFC antenna in them to transmit data to the terminal, activated when placed near an NFC receiver, such as a payment terminal.

How do I know it’s secure?

Contactless payments are every bit as secure as using a chipped credit card. Contactless devices/cards use the same technology used in EMV  (Europay Mastercard Visa) chipped credit/debit cards. This makes payments made with contactless devices/cards are virtually impenetrable to counterfeiting for in-person transactions. To date in the US, the use of chipped cards/EMV technology has decreased counterfeit card fraud by 87 percent, and overall in-person card fraud by 40 percent, VISA announced in September 2019.

Contactless payments use tokenization to ensure every transaction is secure. Tokenization replaces your credit card account number with a one-time-only digital identifier, called a token. The tokens are instantly created and just as immediately disposed of. The tokens do not transmit sensitive data such as your account number. What this means for a consumer is that even if someone obtained your tokenized data, it keeps you and your account number untraceable beyond the moment of the transaction so it cannot be used a second time.

Use your smartphone for extra protection

If you use your smartphone for contactless payments,  you have an extra level of security in hand. Smartphones require you to login, either with a PIN or unique biometric identifiers such as your fingerprint or a face scan to proceed to payment approval. That means that only you can use your smartphone to transact a contactless payment, adding one more layer of security for your purchases.

Your smartphone stores credit card information in what is called a “secure element,” an industry-standard, certified chip that is specifically designed to store payment information securely. That’s the purpose of the mobile wallet on your smartphone.

By the way, if you’re paying with a contactless device/card, as a consumer you are never liable if you become a fraud victim. Either the merchant or the funding financial institution is liable, not you.

What do I do to make a contactless payment?

First, check to see if your card or smart device is enabled for contactless use. Contactless credit/debit cards come from your bank or credit union and bear the brands of the major players in the industry: Visa, Mastercard, American Express or Discover. Millions of contactless credit/debit cards are in circulation, making it very likely that your financial institution issues them. Check your cards and look for the universal contactless symbol on the front or back of your card, looks like little sound waves.

If you don’t have a contactless-enabled card, call your credit union or bank (or visit them in person) to request one.

All iPhones and most Android devices introduced in the last two or three years are enabled for contactless payments from their mobile wallet applications.  The most popular of the mobile wallets are Apple Pay, Google Pay and Samsung Pay, which are pre-installed on new devices purchased from those manufacturers. You can easily and quickly opt-in to using these services.

If you use a device as a digital wallet, treat it the same way you would cash—use the locks on your device and set up notifications on all your credit cards in case of fraud or theft.

Once you have your contactless card or mobile device set up, making a contactless payment is simple. When you’re at the register checking out, hold the device for two to three seconds above the contactless-enabled payment terminal. Listen for a beep and check the payment reader to see that your payment has been processed. Easy peasy!

How can I tell if a merchant accepts contactless payments?  

You will be delighted to find that millions of brick-and-mortar merchants accept contactless payments. According to Visa’s report from 2019, more than 60 percent of face-to-face transactions took place at contactless-enabled payment readers.

When you’re at the checkout, look at the merchant’s payment reader for the contactless symbol or a sticker that shows Apple Pay, Google Pay and others are accepted. You’ll also see the prompt/contactless symbol on the screen of the payment reader. The word “tap” on the screen also is a clue that the reader is contactless-enabled.

And if you see no symbols or stickers indicating contactless payments, ask the checkout person. Since contactless payments are so secure, merchants are eager to have you use this form of payment.

My business does not currently accept contactless payments. How can I add that capability?

Contact your merchant services/credit card services provider. If you are already accepting chipped credit/debit cards, you are probably already set up to take contactless payments. If you aren’t accepting chipped cards (still using the swipe method), you should consider upgrading to chipped card equipment for your own financial protection.

Sales Sense Payments can answer any questions you have about taking contactless payments and help you with equipment or other requirements. Visit SalesSensePayments.com or call (585) 704-6453.

Bottom Line

While contactless payments offer a wide array of benefits, the best reasons to pay by or accept contactless transactions is the highest level of security and convenience, along with the touchless aspect that’s so important right now. Contactless payments provide merchants and customers a payment option helping everyone avoid contact with potentially contaminated surfaces – something we all should be concerned about as the whole world fights to eradicate the deadly COVID-19 virus.

Regardless of how you pay for your purchases, don’t forget the common sense steps to avoid infection by washing your hands often, wear masks out in crowded public places and don’t touch your face. Click here to read more best practices from the Centers for Disease Control and Prevention. Stay home, slow the spread. Flatten the curve.

Stay home, stay healthy and safe!

Mike Krause
Sales Sense Payments
585-704-6453

Filed Under: Uncategorized

Free Credit Card Processing! (Not April Fools :))

April 1, 2020 by salessensepayments Leave a Comment

Free Credit Card Processing!
It’s All in the Spin: Cash Discounts

In January 2019, New York State passed a law allowing merchants to add a surcharge to customers’ credit card payments. The surcharge covers the fee the merchant pays for the privilege of accepting credit/debit cards for purchases.

Whether they call it a convenience fee, a non-cash adjustment, a courtesy fee or a surcharge, it amounts to the same thing: when a customer pays with a credit card, the merchant can add a fee to their bill. The extra fee is to cover the merchant’s cost of accepting credit cards. This practice is currently more prevalent in New York City than in upstate businesses.
 
So if a customer pays for a meal or products with a credit card, their bill could be anywhere from 2.5% to 3.99% higher.  
 
Meal                                             $20.00
8% Tax                                             1.60
2.75% Non-Cash Adjustment        0.55
               Total                              $22.15
 
The merchant cannot add a non-cash adjustment that is higher than what they are charged. In other words, the convenience fee added to the check can’t be 3.99% if they are only charged 2.75%. The fee is passed along to unburden the merchant from the charge but is not a way to add profit to the business. 
 
Some merchant processing vendors are touting this fee pass-along as a “Cash Discount,” attempting to make the practice more palatable to merchants. Using the same example, here’s how a receipt might look, one paid with cash and the other paid with a credit card.
 
              Cash Discount                                       
Meal                                        $20.00       
8% Tax                                        1.60       
2.75% Non-Cash Adjustment     0.55       
Cash Discount                          – 0.55
Customer Pays                       $21.60       
 
          Credit Card Payment
Meal                                         $20.00
8% Tax                                        1.60
2.75% Non-Cash Adjustment      0.55
Customer Pays                        $22.15
 

Find Out What You’re Actually Paying

Credit card processing fees are seemingly endless and intentionally difficult to decipher. Financial institutions pass numerous credit card fees along to your business every month. Do you know what you’re paying and why? Contact Mike Krause at Sales Sense Payments for a free, objective analysis of your credit card processing fees. We know we can save you money.

 

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