Remember when credit cards were new? Yeah, neither do I. That’s because accepting and using credit cards for payment has become second nature to almost everyone in the first world. Therefore, as a small business owner you can get a real edge over your competition by accepting credit cards (just like the big boys!)
Today’s customers expect to use their credit cards for just about every purchase, even from service businesses that have historically been cash only. The ability to accept credit cards is now a formal requirement, but rather a form of customer service. Any business that can’t accept credit cards risks losing clients to competitors that will.
However, you also have to deal with additional problems if you want to accept credit cards. These include security issues such as fraud and chargebacks, which are a routine part of credit card transactions.
Ensuring that customers know you accept credit cards and providing them with as many payment options as possible is also essential for attracting and retaining clients. The following ten tips will detail how to accept credit cards for your service business in 2020.
Get your helmets and elbow pads ready, this is going to be a bumpy ride! But I know you’re up for it. 🙂
- Provide Great Customer Service.
Customer service should always be a top priority, especially for small businesses trying to grow. This includes basic courtesies such as thanking clients for their patronage. It is also important to make it as easy as possible to get in touch with someone from your business when they have questions about a purchase.
Customer service includes additional issues when you accept credit cards, which you must address promptly to avoid misunderstandings. For example, you should handle refunds yourself instead of driving your clients to file disputes. This practice is virtually certain to save you money in the long run and protect your reputation.
- Prioritize payment options that provide greater flexibility.
Many options are available for handling your credit card transactions, but you need to select a credit card processor that maximizes your flexibility when you accept credit cards. This is especially important when running a new business that’s still trying to find its footing.
In particular, you don’t want to lock yourself into a long-term contract before you determine exactly what you need from a merchant account provider. Some of these companies try very hard to get you to sign a contract with a long term and high cancellation fee. Don’t be afraid to ask for providers to make exceptions for the terms you don’t like. They may be more flexible than it first appears and you don’t lose anything by asking. Remember, you can always say “no” to a proposed agreement.
- Learn how to spot potential fraud early.
Identity theft is a routine problem when you accept credit cards. You can’t do much to prevent someone from stealing credit card information in the first place, but you can protect your own business by recognizing charges that may be fraudulent before executing these transactions.
Always check the details of a credit card transaction carefully, and ensure your employees do the same. Contact the card holder if anything seems amiss such as a shipping address for a purchase that doesn’t match the credit card’s billing address, especially for phone and website purchases. An incorrect security code is also a good reason to verify the purchase with the card holder. Legitimate clients will rarely resent you going the extra mile to protect their account.
“Hmm.. for your protection, can you confirm if the shipping address on this is correct?” -It’s that easy!
- Deal with returns quickly.
Accepting returns and issuing refunds is a part of any business, whether it accepts credit cards or not. In the case of credit card purchases, however, a return also involves a chargeback that can cost your business money. Dealing with it quickly is essential, especially for small businesses.
Find out if your payment processor offers an option to notify a merchant about pending chargebacks, and activate it if available. This capability lets you know when a customer is disputing a charge very quickly, allowing you more time to contact the customer and address the matter. Chargebacks are often the result of a misunderstanding, rather than a fraudulent transaction. For example, a customer may have simply forgotten about the purchase.
“Oh yeah, that Blendmaster 4000.. I actually did order that! It was 2AM and I was filled with awe and also not a small amount of wine. But yeah, I ordered that” -Ever have a conversation like this?
- Follow the rules to the letter.
All merchant account providers have extensive rules regarding credit card transactions, although those rules can vary considerably between merchant account providers. Learn these rules and follow them precisely to keep your account in good standing and protect your business. This practice is especially important when switching providers.
For example, some providers require a different procedure for transactions that don’t require the physical card, such as online and phone purchases. In these cases, merchant account providers often require the merchant to obtain additional information from the customer for security purposes. For online purchases, this information may include the customer’s IP address or digital signatures. Providers may also require you to review the customer’s social media profile.
“Okay, it looks like bigjoe3453 made this order… is that you? I can’t find you anywhere on social so just wanted to make sure” – Always check if folks are legitimate or not. You’d be surprised!
- Shop around for your payment processor.
You need a merchant account from a payment processor before you can accept credit cards. These accounts all perform the same basic function, but there can be a huge difference in other areas. Obtaining an account can be a lengthy process, largely because there are so many providers. However, it’s essential that you select the right one due to the wide range in prices and services they offer.
Processors often offer multiple plans based on factors such as transaction volume, transaction type and business type. For example, some providers favor businesses with low volume, while others are best for businesses with high volume. Similarly, businesses that don’t typically require physical credit cards may be better off with a different provider from those that do require the actual credit card.
P.S. PocketSuite currently has the lowest fees in the industry (2.9% + 30¢ flat fee) for small businesses based on our studies.
- Communicate your refund policy to your customers.
It’s virtually impossible to provide too much clarity to your clients, especially when it comes to your policy on refunds. Common reasons for a customer to request a refund include buying the wrong item, an item that didn’t work as expected and a sale price that took effect after purchase. Refunds for credit card purchases require additional steps, making it even more important to minimize them when you start to accept credit cards.
Ensure your business has a clear policy on refunds, returns and adjustments. Display this policy prominently throughout your store, especially at point of sale (POS) locations. You should also print your policy on your receipts, so customers will know what it is after they leave your store.
“Sorry, I didn’t know that someone stealing my item wasn’t covered by your refund policy” Really…?
- Add signage for credit cards.
Most customers today will assume that you take credit cards unless they have a reason to believe otherwise. However, it never hurts to post dedicated signs to that effect, and it can help your business. These signs should clearly state that you accept credit cards and include the logo of the specific cards you accept. Post these signs at the front of your store, on your website, and POS locations to boost sales, especially from impulse buys.
Example: WE ACCEPT VISA, MASTERCARD, etc.
- Keep records of everything.
You should already be keeping meticulous records on your financial transactions, but this practice is even more important when you accept credit cards. Of course, records aren’t much use when someone steals a cardholder’s information, but they can be invaluable for disputing chargebacks. Detailed records are particularly useful in cases where the customer has simply forgotten about the purchase or is trying actually to commit fraud.
Fraud is no joke, don’t take this lightly!
- Obtain valid authorization for credit card transactions.
Today’s consumers expect a large number of payment options, especially from businesses that accept credit cards. In addition to traditional credit cards, it’s also in your best interest to accept debit cards, gift cards, and prepaid cards. Regardless of the specific type of card, you should never get lax about security. For example, you should never complete a transaction without obtaining valid authorization.
Keep this in mind
You can increase your sales when you accept credit cards, but you also need to implement a number of practices when doing so. Some of these practices are specific to credit cards, while others are best practices for all transactions that become even more important for credit cards. These changes may seem burdensome at first, but they’ll soon become second nature.
It’s time to take your business to the next level. If you’re interested in accepting credit cards for your business, PocketSuite has the lowest fees (2.9% + 30¢ flat fee) around and is built for small business owners.
Like this article? You’ll love our guide on how to generate leads for service businesses in 2022, and of course our Frustrations with Square article!