Unintended Consequences When Accepting Credit Cards - Some Lessons-Learned From Our Readers
According to Credit Today's recent annual benchmarking survey on credit cards, 76 percent of all trade credit departments are now accepting credit cards. Managing this process always requires careful planning, so we asked our readers for their comments and advice on the process of accepting credit cards. As always, we got some great feedback. Among various comments, several were clustered under what we would define as "unintended consequences." No matter how hard you try to think of everything, there will always be unintended consequences. Hopefully, the experiences reflected in these responses will help you eliminate the number and severity of the unintended consequences you might run up against in setting up or managing a credit card payment process. "Our credit card merchant charges us different rates depending on the type of credit card (i.e. corporate procurement cards have a lower rate than a personal credit card). However, I've no way of knowing whether the card we're accepting is a corporate card, large ticket card, personal card etc, so no way of knowing what we'll get charged - very frustrating."
- Tracey Skipp, Credit Manager, Krug, Inc. "The major lesson we learned is that by accepting credit cards, we were lowering our mark up since we could not charge any fees back to them. This is not a first option for us. We only accept credit cards for those prospective clients that did not get an approval in the credit process."
- Michelle, Payroll/Credit Manager, The Hamilton-Ryker Group, LLC "Watch their billings closely. Learn the fee structure. Audit their invoicing periodically. They will err and mischarge you."
- John Bradtke, Credit Manager, Dayton Superior "Make sure your rate doesn't change by the info you input. For example, if we put in an address that is different than the billing address for the credit card, we are charged a higher percentage. Also know that a confirmation number on the machine doesn't mean the transaction is valid. It may later be rejected."
- Catherine, Credit Professional, Ohio Medical Corp "There were too many hidden fees we were not aware of such as millage accounts, points and bonus type cards, transaction fees, volume fees, no address fess. And remittance reports were not detailed by transaction (lumped per day)...J.P. Morgan offered better rates than Fifth Third (there were no set up charges for changing to J.P. Morgan (Chase)."
- Patricia Hunter, Credit Manager, Line 6, Inc.
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