Mismatched Totals or Out of Balance – How To Fix
August 12, 2010 by Admin · Comments Off
You’re tired, it’s late and you want to go home. After an exhausting day you have just one task to complete on the Point of Sale terminal and that is your end of day settlement. Usually it is a two minute task but tonight when you go through the normal procedure the terminal is telling you that your sales are out of balance and ‘do you wish to continue’ with the settlement.
The answer is “yes”, complete it and if you’re tired deal with the out of balance tomorrow?
At this point you may be asking why wait until tomorrow and our response is simple:
You’re tired, go home and get some rest. Every reputable POS company has a reporting system that you can view online the following morning. You never “lose” money per se. In almost all instances the out of balance will probably have something to do with a communication error resulting in a cardholder being charged twice and this can be resolved easily.
POS systems and/or networks are not infallible, somewhere down the line there will be a failure of some sort and Out of Balance would be the most prevalent. There are basically only two reasons why a terminal will show you a mismatched total.
1. You attempted a transaction and received a communication error such as “Timed Out” or “Comm Error”. You then proceeded to re-swipe the customers card and complete the transaction. Occasionally, what will happen is that the host will approve a transaction and during the last leg of approval back to the terminal the transaction will cut off, i.e. disband thus the Comm error. This can happen because someone picked up the phone or perhaps you have not disabled call waiting and someone called while the transaction was being processed. Either way, the transaction was completed at the Host level but not at the Terminal level and the result will be the cardholder being charged twice although the terminal only has it once. Ergo, your end of day will be out of balance.
2. The second reason is similar to the first but in reverse. The card itself is only swiped once and it is approved at the Terminal level but this time the last leg of the transaction has gone back to the Host side and a communication occurs. The terminal says approved because the Host has sent an approval yet it is waiting for the terminal to send a message saying that Yes it has received the approval. If the Host network does not receive this message, the transaction will be “reversed”. When this occurs, the merchant is required to fax a copy of the transaction (not the transaction list) to the POS provider. Since the funds for the transaction would have been returned to the cardholder, the POS provider will request that the funds be sent to the merchant account. This process can take between five and ten days.
In brief, funds are never irretrievable and although the extra time needed to resolve an out of balance can be frustrating, it does not have to be. Check your online reports daily and feel safe that you will never lose money.
The Critical Payment Processing Guide for Canadian Merchants
March 30, 2010 by Admin · Leave a Comment
The Critical Payment Processing Guide for Canadian Merchants
Discover how this Guide has helped 100’s & 100’s of Canadian business owners cut their payment processing fees by 10-30% and sometimes much, much more. If you are brand new to merchant account services, then this is the perfect guide for you… it’s takes most people about 15-20 minutes to read.
In this guide you will learn…
- What a Merchant Account is & Why Essential You Know How Your Business Will Transact Before Applying for Merchant Services
- How Not to Be Fooled by Ethically Questionable Merchant Account Companies’ Marketing Tactics
- How to Avoid the 3 Most Common Mistakes Merchants Make When Choosing a Payment Processing Provider
- The 18 Essential Questions That Will Protect You from Costly Hidden Fees
- How to Become a Seasoned “Pro” at Understanding How Credit Card Processing Rates Work Through Real Life Case Studies
- How to Save On Merchant Processing Fees with These 3 Insider Tips
- Learn How to Find the Perfect Payment Processing Solution for Your Business Needs Without Having Any Remorse Buying
Ready to get started on the guide…? Click here to become a merchant service pro.
Where is the CVV # on Credit Cards?
July 8, 2009 by Admin · Leave a Comment
I have had a few merchants recently not understand what the CVV # is on credit cards and how they can use it to protect themselves from potential fraud and/or chargebacks. In the image (the left) shows you where to find the CVV number on credit cards.
It is a three or four digit security code on your credit card. If your customer is prompted to enter that and it matches the security code on file the transaction goes forward, if it doesn’t match it is flagged and the transaction is halted. It’s important to match this up on mail-order and telephone-order businesses. I’d also incorporate it into my e-commerce shopping cart too. It’s not a 100% fool-proof, but it is just one more measure that enables Merchants to protect them selves from credit card fraud.
What’s the Deal with: “Merchant Accounts & Personal Guarantees”?
June 28, 2009 by Admin · Leave a Comment
This question comes up often from many merchants “Why do I have to sign a personal guarantee?” and it’s a valid good question. In this blog post I will try to shed some light on this merchant account subject matter.
Basically all merchant account providers will require that a personal guarantee be signed by the owner(s) before approving an account for credit card acceptance. Now I do know providers that will accept applications, but it requires 2 years worth of accountant ready financials (which most new companies obviously do not have) so any new company does not have this as an option and will have to make a personal guarantee to get approved on a merchant account.
Some business owners are justifiably reluctant to sign a personal guarantee, and I get that (and hear you loud and clear)… that is the point of having incorporations and limited partnerships, or other legal entities that are set-up to protect your personal assets from the business’s liabilities.
So what’s the big deal, right?
Well, what most Merchants do not understand is that these merchant accounts are consider short term loans (only with higher risk associated to them). A merchant account provider is at risk for every dollar that passes through the merchant account during a 6 month peroid.
Look at this scenerio:
Company ABC comes out with a new… I dunno… lets say a… MP3 Player for $50 bucks. During their first month, sales are over $50,000 and everyone in the company is excited. Because ABC Company feels they have a hit on their hands they take all remaining capital and toss into advertising to try to drive more sales to their new MP3 Player. Only 2 weeks later ABC company finds out their is problem with their player, a manufacturing bug that is causing almost all their MP3 Players to stop work a couple months after working.
ABC Company doesn’t have the cash to replace them because they dumped all their capital into the extra advertising so they tell customers that they are sorry, they won’t be able to honor the six month warranty that was included.
What do you think these customers who bought the MP3 Player are going to do…? That’s right – issue a chargeback. Then the merchant account provider will try debit ABC Companies bank account to recover the chargeback amount only to find out there is no money to be able to debit. Guess who is on the hook for all these chargebacks…? The merchant account provider, if… they don’t have a guarantee.
Hence why Merchants have to give a “Personal Guarantee” for approval on a merchant account.
You see Merchant Account underwriters have to determine what the risk factor is for each company and business. They look at projected sales and multiply that by 6 months because that is how long a card holder has to issue a dispute a charge (a.k.a. chargeback).
Yes the above example is a Merchants honest mistake, but it is still the merchant account provider that does not want to stuck holding the bag, if Merchant’s businesses goes bust. The above example even though the business made an honest mistake it could be taken the wrong way and they could end up on the TMF Match List. Merchant Accounts are very serious stuff – it’s not just as simple as apply for a credit card (which I think a lot of newbie business owners think).
These procedures are also set-up to prevent your typical fraudsters too. This is where they try to set-up a merchant account, sell stuff (or so they say), get paid by the merchant account provider within 48 hours and then skip town. The “Personal Guarantee” is to try to prevent fraud.
I hope this has shed some light on why a “Personal Guarantee” is required when applying for a merchant account. If not, please let us know your questions by using the comment section below.
Terminated Merchant File (TMF) Match List – One List You DO NOT Want To Be On!
June 25, 2009 by Admin · Leave a Comment
I recently had a client who we submitted an application into the merchant account underwriters and the application came back being on the dreadful “TMF Match List“. Now this has only happened to maybe half dozen of my clients (out of about 1000 applications), and I felt it warranted a blog post on the subject matter to help Merchant understand what the LIST is how to try to prevent ending up on the ‘TMF Match List‘.
You may be asking yourself “What is the TMF Match List“?
When you apply for a merchant account, the underwriters will check to see if you are on the Terminated Merchant File (TMF). If you’re on it, this means that another payment processor has terminated a merchant account with you, and sends up a red flag to all the other payment processors that you’re a credit risk. Once you are on this list nobody can get you approved from any of the merchant account providers until you are removed.
How do you get on the TMF Match List?
The bad news is… is it’s not difficult to end up on this list and it can happen to good, honest hard working Merchants. Not enough merchant processors take the time to educate merchants about the “Do’s & Do n0t’s” merchant account services. And when they do, its in some legal type document in tiny print that even the smartest bankcard lawyers would have difficult time digesting it all.
All it takes is one accounting error or technical mistake or even a little dispute over billing practices and your business is in jeopardy.
So how do you get on the Match File? The most common ways to violate you merchant agreement includes:
- Credit card fraud – If your fraud detection controls aren’t strong enough you could end up with too many chargebacks.
- Friendly fraud – This is when a consumer disputes a legitimate charge such as from an adult website, hence why adult sites are consider ‘high-risk’. Card processors do not like high chargeback businesses.
- Factoring – Factoring is when a merchant deposits transactions for sales generated by another business. You must never do this, you are approved for your business and your business only. Do not let a friend convince you of using your debit machine for the weekend or whatever. This a for sure way to get your merchant account terminated. People are usually caught because the billing on consumers credit card statements shows you info, yet they purchase from your friends business and now that they do not recognize the business info they issue a dispute causing chargebacks, etc.
- Not delivering products or misrepresenting products or services.
- Owing money to the merchant account processor
- Refunding money to your own credit card – you think they can’t tell your credit card was refunded on your merchant account.
- Running your own credit card on your merchant account – big no-no.
- Basically excessive chargebacks – card processors do not like to see chargebacks above 1%
One of the fastest ways to get on the Match list is to close your merchant account and not pay your last statement. It’s a simple oversight with costly consequences. Even a matter of a couple of dollars can land you on the dreaded list. Fortunately, this is one of the easiest fixes – just pay your remaining bill/fees.
Tips for staying off the TMF list:
- Don’t go over your officially authorized maximum sales without permission from your merchant processor. Many merchants are unaware that when you applied and put down your expected monthly sales volume that creates your profile of sales limits. You see merchant account are seen kinda like a ‘short term loan’ and you are approved for a certain amount. Credit Card Processors do not like it when you exceeding those amounts with prior notice or growing your business organically over time (kinda like improving your credit limits through years of good credit). The worse thing you can do to a merchant account is slam it with ton of sales – this causing ‘huge’ RED FLAG and with cause your funds to held until the securities department decides it safe to release your funds.
- Make sure you make easy for your customers to resolve any issues they may have had with your products and/or services. Provide your customers with up-to-date information about how and when you will debit funds from their accounts. Give them easy access to contact methods for them to reach you with any of their questions, concerns or complaints. Respond to all inquires in a timely fashion. If you don’t do this you are just asking for a flood of chargebacks.
- List your customer support phone number on your customers’ monthly statements. If they don’t recognize your debit they should call you first before hastily-and mistakenly-disputing the charge.
- Provide excellent customer service and stay in touch with your customers. Send emails, call them to confirm higher-than-normal charges or to solicit customer feedback, and send newsletters. The more they know you the better the more they will feel comfortable with and trust you.
- Monitor transactions closely with a transaction management system, so that you can protect your business from an expensive interruption of service.
If you find out that you’re on the TMF list, there is hope-but it will take some work. Sometimes bad things happen to good honest Merchants, but don’t lose hope, it is possible to get off the ‘Match List’…now that being said…if you committed fraud, you probably won’t ever get off the list.
As soon as you find out that you’re on the TMF, call the merchant account company that placed you on the list. Prep yourself to be speaking to many different departments before you will reach the ‘right person’. Once you have reach the ‘right’ person keep your cool (no matter how frustrated you are) The ‘risk department’ is NOT customer service and they don’t deal well with angry Merchants, nor do they have to. Think of them more like a collection agency only this collection agency is trying to get their money back from you they usually have it already. If they have your money they can legally hold up to 11 months in trust before they have to release your funds back to you. This enables them to protect themselves from any chargebacks. I have seen this cripple businesses before. Please be patience, nice and do exactly what they ask. Some people are going to not be nice anyways, but you were for warned.
If you believe your business or name was mistakenly added to the Match file, you must work with the acquirer that added the listing to the file. Only the company that placed you on the list is authorized to request a change or deletion of the information.
If you were placed on the match file for a high chargeback ratio, time is usually the only thing that will get you off the list. Your card processor needs to know that it isn’t going to get stuck with unpaid bills resulting from the merchant’s former customers’ chargebacks. They sometimes will request a deposit or rolling reserve if you do not already have one.
It can take several weeks to get off the match file in many cases. If after a few weeks you don’t make any progress, you may need to hire a lawyer. If you need legal assistance in getting of the Match file, seek a lawyer with experience in bankcard law.
Merchant Account Warnings from a “Merchant’s Perspective”
November 7, 2008 by Admin · Leave a Comment
Matthew Bredel talks about Merchant Accounts. He is not in the industry and is talking about US merchant accounts, but a lot of what he speaks about also pertains to the “Canadian Merchant Account” industry too.
I was going to write a post today covering some of the merchant account FAQ’s, but he did such a great job in his video that I decided to let him do the talking. Makes for an easy post for me! 
Understanding Merchant Account ‘Discount Rates’
September 27, 2008 by Admin · Leave a Comment
Watch the video below to better understand how credit card processing fees work.
Use our Free online Merchant Account Calculator
The Critical Canadian Merchant Services Guide – Part 8
September 26, 2008 by Admin · Leave a Comment
Three Insider Money Saving Tips for Merchant Accounts
Tip number one: If you run a business where you need to take a deposit (like a motel) or pre-authorization (as in a car rental biz) over the phone, then do the pre-authorization, but don’t close it out as a pre-auth because you will then be charged the “non-qualified” rate-which is usually substantially higher then the “card present rate.” Just leave the pre-authorization and then when it is time for payment and the customer is present, swipe the card in the machine, allowing you to end up with the “qualified rate.”
Tip number two: If you have a business where you have multiple check-out stations or a business that has a dedicated line for each terminal, then you may want to use a high-speed internet connection, because you can use multiple Point-of-Sale Terminals through one IP connection. This can potentially save you $40-$70 for each additional phone line you are paying for to connect to your Point-of-Sale.
Tip number three: If your business requires a lot of MO/TO ordering then you really should use a Virtual Product because the rates will be less on the Non’s. A terminal’s keyed transaction rates can be as high as 3-4% and yet the same Non-qualified rates used on a completely different solution (a solution designed) for MO/TO order can be half the costs. It is very important that you chose the right solution for your business needs.
Choosing the Perfect Processing Solution for Your Business Needs
You have a choice between four types of solutions.
1. Retail
A) Dial-up Machine
B) IP Machine
C) Wireless/Cellular
2. MO/TO 1-800 number
3. MO/TO Virtual
4. E-commerce
Retail Solutions are obvious for a business that will process most of its transactions face-to-face with its customers. You can have your Point-of-Sale Terminal connect via phone line, high-speed internet, or on the cellular network.
MO/TO 1 800 # Solutions are for businesses that have very few transactions, that are on the go. You can call into a 1-800 number for authorization regardless of where you are.
MO/TO Virtual Solutions are for businesses that take orders via: phone, mail-order, email, etc. and process those transactions by logging onto a website with a user name and password.
E-commerce Solutions are for businesses that want to have processing on their websites, where the customer or client clicks through and checks themselves out online. There are many other important factors that pertain to internet merchant accounts.
This concludes ‘The Critical Canadian Merchant Services Guide’
What You Need to Do Next?
Now, I believe we made an agreement together at the beginning of this guide. Our agreement was that I would tell “the whole truth and nothing but the truth” when it comes to Canadian merchant accounts. In turn, you would fill out your application through my merchant account brokerage. Ready to keep your end of the bargain? I am sure you expect the same from your clients and customers! All I ask is for you to follow through with the type of actions you would expect from your clients after giving them all the tools for success!
The Critical Canadian Merchant Services Guide – Part 4
September 25, 2008 by Admin · Leave a Comment
Making Things Worse: Payment Processing Providers Use Ethically Deceitful Marketing Tactics
I have been disgusted with the unethical marketing tactics many merchant account providers have taken to secure more clients. I am seeing payment processing companies tread thinly on the legal line with misleading advertisements/flyers. Often important details are omitted, leaving merchants to discover hidden fees in their statements and then having to pay huge cancellation fees to break their agreements.
Many merchant account providers advertise below-cost rates, then turn around and pad accounts elsewhere with ridiculous back-end fees. They have chosen to play the game of “If they don’t ask, then we don’t tell.“
This is flat out wrong.
I have said this repeatedly: the companies that are playing this shady game are risking a lot. Merchants are consumers too and in this day and age-with the internet such an easy place to share personal experiences to potentially huge audiences-they have a means to fight back!
Look what I found after just a few short searches on some Canadian small business forums:
These are just a couple of examples of merchant accounts gone bad-really bad. There are hundreds of complaints found all over the internet where merchants are complaining about the same themes. For those companies that continue to try and make sales using misleading advertising, and by not sharing all the terms and conditions…well, let’s just say: their day of reckoning is coming.
I understand that there will always be disgruntled customers out there ready to complain at the drop of a hat. But these types of problems are not atypical: they are a common experience I have witnessed firsthand with so many merchants.
Why do these companies put their reputations and long-term credibility with customers at risk? Personally, I don’t understand this type of thinking or marketing!
A good chunk of my business is helping merchants cut their fees by switching them to new merchant accounts with competitive rates, because they were not explained the full details of the agreement they signed with the previous company.
Everybody understands there are costs to doing business and costs associated with payment processing. There is no need to hide fees and/or not to mention certain fees to merchants to secure business. All merchants want to know is what they are paying, so they can budget and price their products and services appropriately to generate a profit margin. A business owner cannot do this if they don’t know the true cost of their expenses. Am I wrong…?
All you want is good service with competitive rates, right?
It’s actually fairly easy to spot misleading advertisements when you know how. Let me share a secret with you that most small business owners do not know.
All the card processing companies have buy rates from Visa & MasterCard. Visa & MasterCard are publicly traded companies and have to post those buy rates. The buy rates are called “interchange.”
For example: all a merchant needs to do is search “MasterCard interchange rates in Canada” in Google and they should be able to track down the current buy rates for that card.
Therefore if a company is advertising well below the buy rates, then doesn’t it make sense that they are making up for it somewhere? These companies are not in the business to lose money. A payment processing company is not going to take a loss to secure your business, just like you wouldn’t sell your products and/or services at a loss.
Which brings us to…
The Critical Canadian Merchant Services Guide – Part 2
September 25, 2008 by Admin · Leave a Comment
Why Card Processing is Important
Just look at Interac’s statistics on card processing in Canada:
Sixty-five percent of all sales are paid through Debit and/or Credit Cards in Canada. From my five years of experience working with many different businesses this can be much higher. If you have an e-commerce business it’s basically 100%. And a lot of other businesses, like restaurants and bars, can see up to 85-90% of their sales go on plastic.
Any sane business owner understands that, considering the types of statistics above, there is virtually no way to stay in business without having a merchant account.
But did you know not everyone can qualify for a merchant account?
Click here to discover how to increase your chances of qualifying for a merchant service account…
