These are strange times. Due to the rise of Coronavirus (COVID-19), many businesses that had previously accepted payments in person only, are now accepting payments over the phone. If your business is doing this already, or considering making this move, this article is for YOU.
Right now, every cent counts, so it’s NOT the time to overpay on credit and debit transactions. These three tips will help cushion your bottom line and improve outcomes as we face this difficult time:
1. Avoid additional fees
Every time you process a debit or credit card transaction, that transaction is assigned an interchange rate. This rate is impacted by everything from card brand to industry, but there are some actions you can take to ensure you qualify for the lowest possible interchange rate on every transaction.
Batch out daily.
Transactions that sit unsettled in a terminal for more than 24 hours, often called “stale authorizations,” are frequently downgraded. This means you’re paying increased rates for every single one of those transactions. Avoid this problem by setting up your terminal to automatically batch out every day after business hours.
Don’t neglect AVS.
AVS stands for address verification system, which is a fraud prevention tool that confirms the address provided by a cardholder matches the address on file with the cardholder’s issuing bank. If the billing zip code is not provided, the transaction will be charged a higher interchange rate, so make sure the 5-digit billing zip code is provided every time you or an employee key in a card.
Ask for the CVV code.
Entering the three-digit CVV code from the back of the card won’t impact interchange rates, but it will help prevent fraudulent transactions. Many fraudsters don’t use physical cards—they’ve either purchased a list of card numbers or stolen the information themselves. Either way, without being in possession of the card, they most likely don’t have the CVV code. Fraudulent transactions will inevitably be charged back and that costs money. More on that in the next section.
2. Ensure accuracy
When you key in a transaction, the customer usually won’t have the chance to review their receipt, so data entry errors are more likely to result in chargebacks. Chargebacks are accompanied by a fee of at least $25, and the disputed amount is pulled from your bank account until the chargeback is resolved. Then, to get your money back, you must provide supporting documentation to prove the transaction was legitimate. Don’t have it? You don’t get your money back. Your restaurant does NOT have the time or money for this right now, so please, please, please, avoid unnecessary headaches and ensure data entry is accurate! A best practice is to repeat the total back to each customer while you still have them on the phone.
3. Use a virtual terminal
A virtual terminal allows you to process payments from any device with an internet connection. This provides a secure way to accept payments over the phone or the internet. This can allow you to keep your business open, and revenue coming in, even if your physical location is closed. You can accept orders that can be shipped, or picked-up, or delivered… and even work from home if necessary.
If your business is struggling with cash flow due to COVID-19, we hope you’ll be able to implement these three practices to start saving money today.