Most Florida small business owners are well aware of their processing rates. As they should be.
Unfortunately, many issues with payments occur due to missing PCI requirements, confusion about pricing practices, debit card minimum violations, chargebacks, and hidden fees from processors.
Accepting credit and debit cards requires much more than having an excellent rate. To avoid disputes, it is critical to understand and follow the rules, ensure proper settings of point-of-sale systems, place necessary signs, and train employees.
Card Systems helps small businesses avoid payment processing fines and fees in these 6 ways.
1. Prevent PCI Non-Compliance Fees
Payment Card Industry (PCI) compliance refers to businesses accepting card payments. These security standards have been developed and are maintained by the PCI Security Standards Council (PCI SSC).
PCI is easily overlooked by businesses because they become too preoccupied. They miss their annual questionnaire. They fail a monthly scan. They assume that someone took care of it. As a result, PCI non-compliance is reflected in their statements as fees.
It is important to do the following:
- Fill in your PCI questionnaire annually
- Perform all required scans
- Remove default passwords
- Maintain terminals and POS software up-to-date
- Never write down any card information
Card Systems offers PCI QIR-certified support to help businesses install, maintain, and service payment systems the right way.
2. No Minimums on Debit Cards
A customer purchases an item worth $4 but the cashier tells him that he needs to purchase items worth at least $10 using his card. In the case of credit cards, that is okay. However, this requirement should not be applied to debit cards.
According to the Federal Trade Commission, businesses are allowed to impose a maximum purchase amount for credit card purchases if the maximum does not exceed $10 and applies the same throughout the card brands. Visa states that minimum purchase amounts should only apply to credit cards.
Therefore, this kind of sign is prohibited:
“$10 minimum for all cards”
Instead, use the following wording:
“$10 minimum for credit card purchases. Debit cards accepted for any amount.”
Train your staff to ask customers whether their cards are credit or debit. A debit card is still a debit card even when the customer uses it without a PIN.
3. Be Careful With Credit Card Surcharges
The rules on credit card surcharging often confuse business owners. Although Florida statute prohibits surcharges on credit cards, its constitutionality has been declared by federal courts. Thus, Florida merchants are now free to implement them. Card brand rules still apply. For example, Visa prohibits surcharging debit cards.
Make sure that you:
- Have a compliant point-of-sale system applying surcharges only to eligible credit cards
- Place a warning sign before a customer pays
- List surcharges on receipts
- Have appropriate signage explaining the policy to customers
- Teach your staff how to explain it in one sentence
4. Know the Difference: Dual Pricing, Cash Discounting, and Surcharging
Dual pricing, cash discounting, and surcharging have substantial differences from one another.
Dual Pricing
- Cash price: $10.00
- Card price: $10.40
The customer knows both prices prior to the transaction.
Cash Discount
- Posted price: $10.40
- Cash discount: $0.40
- Cash total: $10.00
Surcharging
- Product price: $10.00
- Credit card surcharge: $0.30
- Total: $10.30
The primary difference is the disclosure. The customer should not be surprised by any changes in totals. Card Systems offers businesses dual pricing, cash discount programs, and credit card surcharging with appropriate POS setup and signage installation.
5. Use Clear Signage and Receipts
Most payment complaints are due to misunderstandings. The customer sees the product price. Then the price changes once they check out and they need to be explained the reason for it. You should not do this.
Proper, compliant signage should be installed in the following locations: entrance, checkout counter, menu board, checkout screen, invoice payment website, and receipt.
Here is a useful checkout script.
Dual pricing: “Your cash total is $48. Your card total is $49.44. Which do you prefer?”
Cash discount: “The posted price is the card price. You receive a discount for paying in cash.”
Credit card surcharge: “A surcharge applies to credit card purchases. It does not apply to debit cards.”
6. Review Your Processor Statement
Even if you received a good rate quote, it could be associated with excessive fees listed in the monthly statement. Here are some examples.
- PCI fee
- Non-compliance fee
- Gateway fee
- Batch fee
- Monthly fee
- Annual fee
- Chargeback fee
- Equipment lease fee
- Early termination fee
If you’re unsure of any items on the bill, make your processor explain them to you. If they can’t, you have a problem.
Payment Compliance Checklist for Florida Businesses
Complete this checklist quarterly to ensure you’re not paying and hidden or penalty fees.
- Perform your PCI tasks
- Review the last three processing statements
- Remove debit card minimums
- Verify credit card minimums do not exceed $10
- Do not surcharge debit or prepaid cards
- Install clear signage
- Verify discounts and fees are disclosed on receipts
- Train staff using checkout scripts
- Configure POS system properly to comply with pricing policies
Save More Money Without Adding Risks
Reducing costs associated with card payments makes sense. However, cutting costs the wrong way leads to bigger problems. Imposing a debit card minimum can break card network rules. Using a hidden surcharge can invite a number of complaints. Missing PCI tasks can lead to fees. Improper POS setup can charge incorrect fees on the wrong cards.
Card Systems assists in configuring payment processing, restaurant POS systems, dual pricing, cash discount programs, PCI compliance, and local solutions for businesses operating in Florida. Get in touch with us at (239) 549-5055 or info@cardsystems.com for a free processor statement audit.
