Credit Card Processing Best Practices During COVID-19 and Other Challenging Times
By Juli Barter, Director of Client Relations for POST Integrations, Inc.
As the world continues to navigate the COVID-19 pandemic, the hotel industry continues to feel its effects. As a trusted hospitality payments provider, POST Integrations is providing the following credit card acceptance best practices to help guide you and your properties through these uncertain times.
CANCELLATIONS/PREPAID RESERVATION AND ADVANCE DEPOSIT CREDITS
If your property requires an advance deposit or offers prepaid reservations for guest stays, no doubt your team is dealing with an increased request for cancellations during this time.
As you remain committed to offering your guests flexible booking options, take a look at ways to turn your guest's cancellation request into a future stay by offering the following:
- Rebook the stay for a future date.
- Ability to cancel the reservation regardless if it was a guaranteed reservation.
- No cancellation penalty to cancel any type of reservation up to the day before the stay.
- A 20% room discount to rebook for a future date.
- Spa package to go along with their stay.
- F&B package with free breakfast and/or happy hour package.
- Credit to a gift card to be used for a future stay in the next one (1) year period.
Make all attempts to accommodate the guest as much as possible to maintain your cash flow during this time and if you are planning on issuing a refund, it's important to make sure that the card originally used to secure the reservation is the same card you use to credit the guest.
Both Visa and MasterCard state that if a merchant issues a credit, they must first attempt to issue credit to the same card that was used in the original sale. If the merchant can't issue a credit to same card that was used to secure the reservation, they may then issue credit to another card.
During the time when your property is closed or you have reduced staff, we understand that many normal daily operations may be challenging to address each day. However, there has been an increase in the number of disputes for the hospitality industry where a property has accepted advance deposits for future reservations and the cardholder has disputed the charge with their issuing bank instead of contacting the property directly to cancel/reschedule their upcoming stay. It is important that someone on your team is monitoring your merchant account daily to respond to these chargebacks as timely as possible to provide your Merchant Services Provider the best opportunity to defend them on your behalf.
As hotels close or reduce operations and furlough employees, it is a good time for you to review the hotel contacts listed with your Merchant Services Provider to ensure your list is up-to-date to ensure those staff members who may be taking over responsibilities in the interim are receiving the daily chargeback and dispute notices.
With a large number of hotels having reduced transactions and thus batch activity, POST has started to see merchants experience interchange downgrades due to late batch submissions. Interchange is the fee paid by a merchant to the cardholder's bank for accepting and processing the transaction. This fee is set by Visa and MasterCard and makes up roughly 90% - 95% of the overall merchant's cost of accepting and processing a payment. When a transaction downgrades in interchange, you end up paying more in fees to process the transaction.
To prevent interchange downgrades for late batch submissions, front desk transactions must be batched out within one day of "check-out" or after the sale has been completed.
If your property is on an automatic batch settlement, you should have no problems meeting these timeframes. If your property completes a daily audit and you manually submit your batches, be sure to settle your batches daily to prevent these downgrades and thus additional costs to your hotel.
SECURING YOUR STANDALONE TERMINALS THAT ARE NOT IN USE
If your property utilizes a standalone terminal that processes payments independently from your PMS/POS systems (i.e. banquets, catering, parking) it is extremely important to ensure that these terminals are stored and secured properly. This is especially true now that so many hotels have reduced operations.
POST has seen in the past where fraudsters (and sometimes internal staff) have targeted merchants with standalone terminals to commit fraud where they steal the standalone terminal or gain access to an unsecured terminal to initiate refunds/credits onto prepaid cards. Since prepaid cards are not associated with a specific individual like a debit or credit card, these refunds become untraceable and merchants will experience losses due to unauthorized refunds being completed. Particularly during this time when hotels are issuing an immense amount of credits, these additional fraud credits may go unnoticed
If you have not already done so, now is a good time to implement the process to inventory and store your standalone terminals in a secure area that is only accessible by authorized employees to ensure that you do not fall victim to this type of fraud. If you discover a terminal is missing, you should notify your Merchant Services Provider immediately so the programming that is associated with the missing standalone terminal can be deactivated, rendering the terminal unusable.
SIGNATURE REQUIREMENTS AT THE POINT-OF-SALE
As hotels make plans for their re-opening, public health officials have advised that all businesses attempt to reduce physical contact with their customers/guests and potentially contaminated surfaces like terminal pin pads, receipts, electronic signature capture stylus and pens for signing receipts. Elimination of signature collection could be an effective way to reduce cardholder contact. Now is a great time to look into PMS/POS device options to initiate contactless card acceptance.
As a reminder, MasterCard, American Express and Discover eliminated the requirement for merchants to obtain signatures from cardholders on all in-person transactions where the card is swiped or the chip is read. For Visa, the signature requirement is optional for all EMV contact and contactless chip transactions.