There is no questioning the palpable shift in the way that people buy and sell goods over the last several decades. More and more people are turning from the traditional payment methods of cash and checks to "putting it on plastic" with credit and debit cards. For a business to truly grow and succeed in today's market, credit card acceptance is more important than ever. Knowing some of the rules and regulations that govern this payment type can help save merchants time, hassles and money.
Other People Are Reading
Surcharges, Credit Prices and Other Pitfalls
While using a credit or debit card for payment allows a consumer an easy way to pay without having to carry cash, for a merchant it means giving away a bit of your profits to your credit card processor. Many merchants think that they can offset that cost by charging a surcharge or a higher rate for credit payments.
Though this may seem an easy solution, the truth is that it is in direct violation with your card acceptor agreement with MasterCard and Visa. Merchants that charge a surcharge to their customers for paying with a credit card can be subject to fines that can be as high as £32,500. In addition, a merchant also cannot charge a higher rate for services paid via credit card.
There is one way of accomplishing this that is within MasterCard and Visa guidelines however, and that is to offer a cash discount. This allows a merchant to reward those customers who pay in cash without directly penalising those that use a credit or debit card.
For many merchants, there is a certain threshold at which a transaction will almost cost them more to process than they stand to make on the sale when a customer is paying with a credit card. In such situations it can become tempting to impose a minimum amount that must be purchased to use a credit card.
This is a big no-no with MasterCard and Visa, and can lead to exorbitant fines and can even ultimately result in a merchant losing its right to accept credit cards. Once a merchant agrees to accept MasterCard and Visa for payment for goods or services, it is agreeing to accept any MasterCard/Visa branded card for any transaction of any amount. Not doing so is in direct violation of the merchant agreement.
With the wave of identity theft that has accompanied the increase in credit card use, you might think that asking to see a photo ID when accepting a credit card is a service to your customer. Some customers may even have "Ask for ID" or some other similar sentiment written on the signature line of their credit card. The surprising truth is that a merchant cannot request additional ID, photo or otherwise, in addition to the signed card itself.
There are, however, two exceptions to this rule. A merchant may request ID if a customer presents an unsigned card. In that situation, the merchant can request that the cardholder sign the card and they can request a photo ID to compare the information.
The other exception to this rule is if the good or service being purchased requires proof of age or identity. For instance, a customer buying cigarettes or alcohol is still required to show ID. A merchant can ask for ID as long as he asks for ID regardless of the payment method.
- 20 of the funniest online reviews ever
- 14 Biggest lies people tell in online dating sites
- Hilarious things Google thinks you're trying to search for