How to Setup and Accept Credit Cards, Checks, or Open Accounts Accepting credit cards is not an option but an absolute necessity. Most customers who order merchandise on websites expect to pay by credit or debit cards. Credit cards are the most popular. Shopping on the Internet must be made, so it's necessary you accept the most popular credit cards which are Visa and MasterCard. Most customers will have one or the other. American Express cards are popular but their Internet policy may cause problems. New card merchants who apply by Internet are informed by mail that charge backs can and will be done without notification. If your customer complains and asks American Express to remove a charge on their statement, they're issued a credit and the funds are removed from your account without notification. This to me is a license to steal. In that case a customer could have the merchandise and their money, leaving you with nothing. When word of this gets out, vendors stand to lose a lot of money. Charge backs may occur additional charges (up to $35.00) which are taken from your account. Don't accept terms such as these. Check by asking questions before applying. Before accepting credit cards you must open a business checking account at your local bank. Then apply for an Internet Merchants Account. This account enables a merchant (you) to accept credit cards over the Internet. If you decide to use a Shopping Cart, that cart must be compatible with the Internet Merchants Account and must contain a Secure Payment Gateway. That gateway provides security for the information customers insert into the on-line ordering section. For customers who call and place orders over the phone, you still must open a business checking account and apply for a Internet Merchants Account same as above. However you'll need a Processing Program that requires the manual input of credit card information into an on-screen window. That information includes; type of card, card number, expiration date, amount of sale, invoice number, address and zip code needed for their AVS system. (Address Verification System) Then with the push of a button, information is sent to a clearing house and within seconds an approval is returned. Receipts are printed and the transaction is completed. The funds are automatically deposited into your checking account within 48 to 72 hours. Charge backs can occur when customers are dissatisfied with products and request a refund. If you refuse and they complain to their credit card company, you'll receive written notice of the problem and have opportunity to handle the situation. If it's ignored, there will a charge back against your account. That can trigger up to a $35 chargeback fee. It's better to handle any and all complaints in a satisfactory manner. In the event of a charge back, the clearing house is authorized to take money out of your account. You must agree to this before setting up your account. They'll probably want to check your credit in case you end owing more money than you're taking in. Even though accepting credit cards is not an option, their are risks. Fraudulent credit card use or charge backs from complaining customers who try to get something for nothing. Most credit card companies contact you when they receive a customer complaint, giving you a chance to settle the problem. They will ask how the complaint was corrected or if you agree to a refund. Occasionally you'll have a dishonest customer but don’t worry it doesn’t happen often, as most people are honest.
If you promote a digital e-book that can be delivered over the Internet, here's a great idea for you. Build your website, then This Processor does the sales and delivery for a flat fee of $1.00 per order plus 7.5%. They accept Visa, MasterCard, American Express, Discover, Eurocard, Bravo, Visa Debit, MasterCard Debit, or Novus. Customers in the US can also pay by online check. Nothing to apply for or set up yourself. They do all the sales and collecting, then sends you a check twice a month. If you accept credit cards from call in customers, you need to know about fraud. Credit card companies have procedures for reducing fraud and I suggest reading them. One deterrent is ship only to the billing address used by the credit card company. Meaning where the monthly statements are sent. This Credit Card Processing Program requires the billing address and zip code of the customer so it can perform address verification. If this doesn’t match, don’t accept the card. On larger orders, if you want to be sure the person owning the card is the one who's ordering the merchandise, overnight a copy of the invoice to the billing address of the card and ask they call you. (that depends on the dollar amount involved) Some may give you the correct billing address but have the merchandise shipped somewhere else. This is a red flag and you can just say no. If you send merchandise to the “billing address” on the card and receive an address and zip code match, you should never get a chargeback from a stolen card. You'll learn quickly about credit card fraud and may occasionally get burned. Just consider it a cost of learning. It's probably less that 1/4% of your sales, but still aggravating when it happens. When dealing with corporations, schools, city, state or local governments you may be asked to bill on open account. I had a policy about that. As it might be a one time order and they may never order again, ask them to put the first order on a credit card. Then ask them to submit credit information for future ordering. If it's a one time thing, you'll never receive the paperwork from their credit department. Or give them the total amount due including shipping and have them mail a check. When the check is received, ship the merchandise. You must worry about receiving bad checks from individuals more than businesses. If you accept a bad check from out of state, chances are you’ll never get paid unless it was an honest mistake. There's no recourse going to your local prosecuting attorney because they can’t collect from another state. Nor will they try, even for several thousand dollars. That's one of the risks in the world of business. Minimize risks by setting rules, then following those rules. Such as no personal checks accepted, or credit cards are refused when address and zip code isn't a match with what the credit card company has on file. Here's another. No credit unless it's a business with a proven track record of at least one year and two is better. If you honor open accounts, ask for 3 credit references plus bank information. You might make out a credit application form and put it on your web site. Ask applicants information such as addresses, phone and fax numbers, account numbers and contact names. (the quickest way to process applications is by fax) Credit departments at most businesses have their own pre-written forms that provides this information. Only consider taking credit applications if you've sure they'll become a regular customer. People want to pay later even if they'll only order once with you. Opening an account will take about an hour of your time. Let your instincts guide you. It's better to refuse an order than to be cheated out of one. For instance, let’s say you work on a 40% profit and you sell $100.00 worth of merchandise which cost you $60.00. Then you discover you've received a bad check or the credit card was stolen and you sent the order directly to the thief at a different address. Not only have you have lost the $100, but you must sell 1-1/2 more $100.00 orders just to break even. You're making 40% or $40.00 per order and the thief stole $60.00 from you. Orders over $500.00 require a signature on the credit card receipt, required by the credit card clearing house. Failure to do so can be a problem if the customer complains and you're asked to show proof of purchase. If that’s what's required, I suggest you do it. Fax the receipt to the customer for signature and have them fax it back. Accepting credit cards is not free. There's a cost with every transaction. For Visa and MasterCard, charges are dependant on the amount of business they receive from you.I was charged 2.35% of the gross amount of each sale. American Express charges 2.95%. Some have a transaction charge of .25 - .35 cents each, others may include a flat monthly charge. The good news is, you'll get your money within a few days and not 30 to 60 days while waiting to be paid on an open account.
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