July 19, 2010, 6:08 pm
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Product Description
This digital document is an article from Franchising World, published by International Franchise Association on November 1, 2003. The length of the article is 783 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.
Citation Details
Title: Does accep… More >>
Does accepting credit cards affect the bottom line? What is credit card processing? In simple words, “credit card processing is the act of converting raw … An article from: Franchising World
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credit card processing |
Comment
January 21, 2010, 4:33 pm
Merchant accounts enable you, the merchant, to accept credit cards, debit cards, gift cards, electronic checks, EBT cards, and other electronic payments. It is proven that accepting credit cards can increase your sales by 40 to 50%. Having a merchant account is a necessity for any credible business.
Although credit card acceptance can boost your business, you need to be aware of the costs associated with having a merchant account. One such cost is a chargebacks which is when a credit card processor charges you the cost of crediting a customer’s account for a questioned transaction.
A chargeback occurs when your customer has called the credit card company and disputed an item on their bill. The bank that issued their credit card is required by law to resolve the matter for the customer. Their credit card company or credit card issuing bank is then supposed to investigate the transaction. But because of the high cost to conduct a thorough investigation, most disputes are decided in favor of the customer.
A chargeback can also be initiated by a credit card issuing bank. These chargebacks require no investigation by the bank and are the result of processing or authorization issues.
Therefore, the costs and responsibilities associated with chargebacks are pass-down to the merchant. The average cost of a chargeback to the merchant exceeds $50. This accounts for more than 0.2% of total sales receipts. These are significant numbers and a burden for a business of any size.
The total cost of chargebacks is an enormous problem merchants must face. As always, it is up to the merchant to develop solutions, procedures, and policies that will help them combat and reduce chargebacks and their associated costs.
