The credit card payment process is deceptively simple. It’s all too easy to become complacent, assuming that your merchant account provider, the banks and credit card companies have everything down to a perfect science. While the vast majority of your payments will go through without a hitch, it’s the few that don’t that can cause you grief. This is even more daunting when you own a business with several locations. Understand some of the common pitfalls that you can avoid as a merchant, and you can drastically decrease the likelihood that you will take a big hit.
Don’t Leave Yourself Open to Skimming
Skimming is an illegal act that occurs when someone unscrupulously captures a customer’s credit card information and then uses the data they collect to manufacture an artificial credit card. All it takes is the lethal combination of a disgruntled or dishonest employee, a portable card reader and a tablet or mobile phone. Now that online credit card payments are ubiquitous, the thief doesn’t even need to find a way to produce a false card; they simply input the numbers, expiration date and CVV to order products under the false card.
While it’s impossible to be a mind-reader and know the internal motivations of everyone on your staff, it does help to have personal relationships with your employees and show concern for their well-being. Keeping your door open and listening to people’s concerns and frustrations can enable you to get a sense of whether employees are working well on the team or if they may need to find other opportunities. For the owner of multiple franchises, this can be nearly impossible to accomplish on your own. However, you can meet with the management staff of each location on a regular basis, helping them to recognize the signs of discord and encouraging them to come to you if they have any reason to believe that trouble is brewing.
Keep Customers’ Credit Card Data Safe
Thanks to EMV chip cards now being the standard, merchants are less likely to need to hold onto customers’ sensitive cardholder data. This is because the chip system allows customers to keep their card in their own possession throughout the payment transaction, with the information sent to the processing company in encrypted form.
The time when you may still run into this problem is if you take payments over the phone or take orders at some other external location. To simply input customer data into a file on your computer and assume it will be safe is a serious lapse of judgment. In fact, hackers like nothing better than to worm their way into the computers of small businesses and steal this exact type of information. To give yourself maximum protection in cases like this, do some serious research. Take advantage of the built-in encryption features of your operating system. If you’re a novice with computer security, invest in your own future by consulting with an expert. Putting together a safety net that is as ironclad as possible may seem like a luxury because you may not see how many hackers you detract, but it’s worth every penny.
Don’t Give Employees Free Access to Systems
You should have an open door policy when it comes to hearing workers’ grievances, but that should not extend to your computer systems. Allowing anyone and everyone to use your equipment and providing access to your virtual office system and point-of-sale software leaves you extremely vulnerable. You never want to find out how much damage just one disgruntled employee with a little computer knowledge can do in a short period of time.
The key here is knowing who to trust. Most likely, you will need to delegate some important and data-sensitive tasks to others. This is particularly true when you run multiple franchise locations. Only time and experience will give you a clear indication of who is the most trustworthy on your staff. Chances are, they will be the people who have been working for you for the longest times. Even after you have assigned them higher-level responsibilities, continue to monitor your systems. While they may not intentionally do harm, they may make mistakes that close monitoring can nip at the bud.
Keep on Top of Your Record-Keeping
Even in this age of electronic data, businesses still seem to generate mountains of paper. Keeping everything well-organized and current is a full-time job in itself, and it unfortunately slips through the cracks for many busy entrepreneurs. The end result can be disastrous. Then when you do decide to have a major clean-up, you might inadvertently discard what is important and keep what is not.
The IRS requires that businesses retain certain pieces of financial information for seven years. If the worst happens and you are audited, you need to be able to get your hands on all of the important receipts, reports and records they require. If you can’t, you risk paying serious penalties, not to mention enduring psychological stress.
Particularly if you have multiple franchises, it only makes sense to hire one or more people who will be solely responsible for ensuring that your financial house is in order. In addition, you should have an excellent working knowledge of your mobile payment processing system and/or point of sale solution for training and monitoring purposes. If you aren’t sure how everything works, your payment processing company’s customer service center can help. On the other hand, if you own a smaller business with just one location, you may have no choice but to be your company’s financial manager along with all of your other duties. If this is the case, dedicate a set amount of time at the end of each day to make sure that receipts are where they should be, cash is accounted for and records are properly filed. Even just a few minutes each day will make tax time go infinitely more smoothly.
Resolve Disputes Quickly
Nobody likes confrontation or disputes, but they are a necessary evil in the business world. For whatever reason, many times having nothing to do with you, customers will dispute a charge for a product or service that you provide. As part of their dispute, most ask their credit card company to give them a refund. Usually, the company will do so provisionally during the period of time when the dispute is being investigated. As a merchant, you will be required to send the customer’s credit card company a copy of the receipt or other documents. Failure to send them before the deadline they give you will probably result in a chargeback. Accumulating chargebacks will have a detrimental effect on your account status. If they keep happening, the account could even be canceled or you could be charged other penalties.
No one would argue that running a business, particularly one with many locations, is easy or that you won’t make a mistake here or there. However, failing to do your part in resolving disputes can damage your relationships not only with your merchant account provider but also with customers. Be proactive in avoiding this by dealing with disputes right away as soon as you receive the request. Make it a priority.
Be Careful When Selling Internationally
Having a global reach by making your products available to several countries or even worldwide can be a heady experience. What’s more, it can be profitable, particularly if you have a product that is highly sought after in new markets. However, you need to know what you are doing before you take this giant leap. That’s because the e-commerce environment is swarming with criminals who want nothing more than to deprive you of your money and products.
Before you go global, learn about internet crime, and take measures to protect your business against it. Become acquainted with the red flags to watch for when you receive a foreign credit card transaction, and arm yourself against problems by keeping current on the latest scams and schemes. Better yet, be sure to work with a processing company that has an international payment gateway equipped with all the latest security features.
Today’s credit card processing process offers a level of ease and security unlike any that customers or merchants have experienced in the past. Even so, the potential for problems still exists. Being as organized, proactive and careful as possible will help you to stay clear of the worst of them, giving you more time to run your business and make it profitable.