Actions to avoid:
- Never run a transaction on your own credit card
- Never refund a customer’s transaction to a credit card that differs from the original credit card used for the purchase
- Never refund cash to a customer that used a credit card for the original purchase
- Never forget to batch out your credit card terminal, virtual terminal or point of sale system
Processing a transaction on the merchant account owner’s credit card:
This action is considered fraud and will result in your account being shut down and your business black listed for credit card processing. You should never process a transaction with the owner of the merchant account’s credit card, not even for a small amount. Owners may think this is a good way to pull money out of the business but that is incorrect. This action is strictly monitored and the consequences are severe. If you are interested in taking cash out of the business look for a merchant cash advance instead.
Refunding the purchase amount to different credit card:
This action is also considered fraud and will result in the merchant account being shut down. Pay special attention that you are refunding to the exact credit card that was used originally. If the original credit card is not available issue an in-store credit.
Refunding cash on a credit card purchase:
It may seem logical that a refund is a refund, who cares if the refunded amount is returned as a credit to the original credit card or as cash? Well, if you issue a cash refund for a credit card purchase you are enabling the customer the ability to receive two refunds for the purchase amount. The first refund is the cash they receive when the item is returned. The second refund can come in the form of a charge back initiated through the credit card company. Since the cash return does not match the original purchase on the credit card you will have little luck winning the charge back suit.
Always batch out your terminal at the end of the day:
If you wait, even a day, to batch out your transaction you will experience a downgrade on all the day’s transactions. You will also delay the deposit of those funds into your bank account. Monitor your bank account closely to ensure your credit card receivables are batch and deposited daily.