Credit Card Processing 101
By Adam Moss

In order to lower your processing costs, reduce fraud and improve customer service, the following guidelines should be followed. These guidelines remain the same, regardless of what point-of-sale device you use, whether it's a dial-up point-of-sale terminal or PC-based Shortcuts software.

To get charged the lowest rate, all of the following are needed:

1a. Transactions must be swiped through the magnetic card reader on your terminal or PC keyboard.

1b. The card must be a Visa or MasterCard consumer card, issued from a domestic US Bank.

1c. The card must be swiped, electronically authorized, and the customer must sign the transaction receipt. It is imperative that the customer gets a copy of his signed receipt. All transaction receipts are to be stored for at least three (3) years.

1d. All authorized transactions must be electronically settled daily, as part of your day-end closing procedures. This means that in order to receive the lowest rate, the authorization and settlement date of each transaction should be the same.

2. If the magnetic stripe reader cannot read the card or you are recording a transaction from a telephone order, you should be suspicious because these transactions represent the highest occurrence of fraud. It is suggested that on all keyed transactions, you follow the prompts on your terminal for any additional information required, including:

2a. A CVV2 number - This is usually a three-digit numbe on the back of the card in the signature box. Entry of this number on all phone orders ensures that -- in most cases -- the cardholder is at least holding a valid credit card.

2b. Address Verification - You may be prompted on manually-keyed or "card not present" transactions for additional information. Responding to these prompts will reduce the amount of the surcharge on keyed transactions.

2c. Street Address For example, for 4482 Fountain Drive, you enter the number 4482.

2d. Zip Code e.g. 33467

3. Imprint the Card lf the Cardholder is present, but the credit card cannot be read, again be suspicious. It is recommended that you purchase an imprinter to imprint the card on a three-part "sales draft." Have the customer sign both the transaction receipt and the sales draft.

3a. If you do not have an imprinter, please photocopy the cardholder's credit card (front and back) and, if possible, their driver's license .

Following the above procedures will reduce the surcharge amount you pay on these sales.

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