Credit Card Processing Pitfalls

By: Kayfione
In an ideal situation, credit card processing service ensures that customers get the goods they purchased in good order. In addition, it also assures merchants that they get their money's worth of goods. Each get their end of the bargain in a satisfactory manner.

But in the real world, however, transactions do not go smoothly. Aberrations occur along the way. These problems could originate either from the customers, from the merchants, or from the credit card processing company. And let's face it. Merchants have practically no control on the kind of customers --- whether they be honest or deceitful-- that patronize their business. The credit card processing company can and will take care of fraudulent transactions. Likewise, merchants have no influence or control over the credit card processing system.

This leaves one controllable factor that merchants can manage well: how they conduct everyday business.

Listed below are some credit card processing pitfalls that could put merchants' business in jeopardy:

1.)SKIMMING
The unscrupulous act of capturing card data and then using the data to manufacture counterfeit credit card is called skimming. Too often, a dishonest salesclerk or a desperately disgruntled waiter would resort to it. They use their own personal digital assistant ( PDA) with a card reader to secretly swipe and obtain credit card data.

2.)STORING UNCRYPTED CARDHOLDERS' DATA
It's very convenient to type credit card information and store these data in your PC without any form of encryption. If you do, you are opening the door wide open to identity theft and forgery. Always take the time to encrypt card information. It's a must. And if you want to back up your credit card data files, do so with the encrypted form.

3.)UNRESTRICTED ACCESS TO COMPUTER
Just because they work for you does not necessarily mean you grant any or all employees access to your computers. Any one of them could potentially steal important credit card information. To prevent this, only allow a select few and trusted employees to gain access to your computers.

4.) KEEPING RECORDS ONLY FOR A SHORT TIME
Merchants must keep transaction receipts and records. But sadly, most merchants keep these records for a limited time only-- some one month,others three months,and the longest is six months. This unproductive practice could jeopardize your business. What to do? Well, keep credit card transaction receipts for at least three years. While this may sound a tall order, doing so could save you a lot money and headaches. You could easily produce the necessary supporting documents in case of card disputes even though the transaction occurred two or three years ago. Be sure your accountant keeps all the transaction receipt files within the given period.

5.)IGNORING CARD TRANSACTION SECURITY REQUIREMENTS
Major credit card companies will charge you a fee if you ignore to use built in card transaction security requirement-- Address Verification Service, for instance, or the three digit security code . These charges are called “ pass-through fees". The amount is added to your discount rate. You could end up paying a large chunk of revenues if you ignore card transaction security requirements.

6.)GIVING LATE ATTENTION TO RETRIEVAL REQUESTS
Supposing one customer disputes a credit card transaction. He or she initiates a retrieval request Your credit card processing company then requests that you furnish the necessary receipts for the disputed transaction. Normally, you should do so at the earliest time possible. But if you are busy or have a hectic schedule, you tend to put off this task some other time. Again, this is counter-productive. If you fail to provide your processor the documents within a specified length of time, you will be liable for a costly chargeback. As you well know by now, accumulated chargebacks could put you out of business for good.
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