Sunday, June 24, 2012

How to Take Credit Cards when the Card is Unreadable

How to Take Credit Cards when the Card is UnreadableDo you know the experience? You swipe your card through the machine at the register and it gives you an error. You do it again, but you get another error. It can be frustrating, but it does not have to be. If the merchant knows what they are doing, the situation should be handled quickly and painlessly.

So first of all you need to understand that a face-to-face setting does not always translate into card-present transactions. In this post I will go over the reasons why this is so and will show you how to take credit cards every time this happens in a way that will be satisfactory to both you and your customer.

Issues with Card Readability

First of all, why would a card be unreadable? 99% of the time the reason is one of the following:
  • The credit card terminal is damaged.
  • The card is damaged, most often its mag stripe is demagnetized. This could be totally accidental, but it could also be caused the card being counterfeit or somehow altered.
  • The card is not swiped incorrectly.

What Should You Do When the Card Is Unreadable?

When, for whatever reason, the card is unreadable, you need to follow these procedures:
  1. Examine the credit card terminal to make certain it is working correctly.
  2. Verify that your customer is swiping the card correctly.
  3. If there is no issue with either of the above items, examine the card itself to verify that it is valid and has not been damaged in any way.
  4. If it turns out that the issue is with the card itself, you have several options. Whatever you choose these procedures to be, write them down and train your staff. You could request another card or a different payment form. You could, on the other hand, manually enter the payment data. You could also request a voice authorization approval for the transaction.
  5. If you choose to be implementing one of the last two options in the preceding item, you will also need to take an impression of the front of the credit card, to be placed on the transaction receipt or on a separate receipt, which will have to be signed by your customer. The impression of the card could then be needed in chargeback disputes.
Before you decide on your procedures for handling unreadable cards, you need to know that when you accept credit cards that are not swiped, they will be processed at card-not-present rates. Simple as that and there is nothing you can do about it, even though you had the card in your hands.

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