Merchants may choose to accept various forms of customer payment: Cash, checks, money orders, credit cards, debit cards, electronic payments and new online payment technologies may be welcome, depending on the business owner’s nature of business and policies.  Generally, the more types of payment that are offered to customers, the more profit that a given business owner can accrue.  Merchants try not to lose sales simply because they cannot accommodate their customers’ choice of payment.

Many merchants may now notice that debit card processing is becoming increasingly popular.  In a 2007 financial study, performed by TransUnion and Edgar, Dunn & Co., debit cards are now utilized more by customers than even credit cards.  In fact, for point of sale purchases, debit card use is the preferred method of payment, more than any other payment vehicle. 

As a reminder, when customers use debit cards, their funds are immediately withdrawn from their bank account.  In essence, debit cards necessitate that customers have ample funds in the bank.  Indeed, customers do not get the 30-day (or higher) grace period that credit cards afford.  In this manner, debit cards are similar in function to checks.

Perhaps the trend towards increased debit card use reflects our growing collective concern to reign in our (over) spending and become more financially responsible.  In today’s uncertain economic times, people are becoming more budget-conscience and are striving to reduce or eliminate debt. 

The use of credit cards, alternatively, may prove problematic for many when the monthly statement arrives.  Across America, a common refrain is incredulity when we view our total credit card bill, bewildered as to the amount of spending and perhaps even more mystified as to how to meet payment. 

It appears that debit cards compel us to keep our amount of expenditures “reasonable,” or at least affordable.  This is particularly important during Holiday seasons when we tend to stretch our wallets.  (Interestingly, debit card use is on the rise even during Holiday periods.)

Merchants, especially retail merchants, must be aware that they need to accommodate their customers’ burgeoning use of debit cards.  On a related point, I am often asked by a new retail merchant, whether he/she should purchase a pin pad based credit card terminal or a separate pin pad.  My answer is invariably an unequivocal, “Yes!”  It is important to offer this debit card option as well as many customers will choose to use their pin pad passwords.  An added bonus to the merchant in offering pin-based debit is that many merchant account providers only charge a flat rate for the transaction, and do not access any discount percentage.

As more customers and merchants get on the merchant account debit card processing bandwagon, the Federal Reserve Boards has recently enacted legislation to make debit card use more efficient, practical and cost-effective.  The Fed will no longer require merchants to provide receipts of debit card purchases that are less than $15.  Retail establishment owners can still offer receipts, but it is based on their discretion.  In businesses where no company representative is available (e.g., laundry machine service, vending machines, parking, any coin-operated business, etc.), a receipt will not be issued if the purchase goes under the $15 threshold.

As entrepreneurs, it is imperative to think outside of the box, embrace creative strategies, alter business methods and procedures when necessary, maintain enthusiasm and vigor for one’s enterprise, and inspire customers at all times. 

Like doctors who must keep up with the latest developments in the medical field, successful entrepreneurs need to keep their finger on the ever-changing pulse of their own selected niche and that of business marketing strategies, in general.  Towards that end, thousands flock to a host of business advice-oriented sites, seeking counsel, perhaps even looking for the “holy grail” answers that will propel their businesses to greater heights.

In my incessant search to find useful sites (where I feel that I am not overstepping my limited time constraints), I look for a wide range of well-written articles and/or blog entries offered by prominent entrepreneurs and small business experts, an active forum with knowledgeable, supportive members … and even inspiration, where I can learn about how others achieved their goals, perhaps mirroring some of the exact strategies.

Well now I need to look no further than EvanCarmichael.com.  It satisfies the aforementioned criteria on what constitutes an exemplary business advice website.  Indeed, I spent too many hours over the weekend, familiarizing myself with the site, greatly impressed by the quantity and quality of the information presented.

The articles are all-encompassing, covering a vast array of business topics.  Contributing authors include Donald Trump, Jay Conrad Levinson, Seth Godin, Tom Peters, Zig Zigler and others.  It is difficult to find a central location where one can easily access the ideas of such a brilliant constellation of writers, thinkers and business leaders. 

The articles presented are concise, easy-to-read and offer meaningful content.  Many should serve to inspire the reader.  For example, I just read an article by Jack Canfield (famous for his “Chicken Soup for the Soul books”) called “The Power of Asking: 7 Ways to Boost Your Business.”  It is a powerful reminder of the “Ask and you shall receive principle,” noting that even business can be secured by simply requesting it … as long as the request is made at the right time and in the right way.  (Canfield notes that 60% of sales people never even ask for the order!)

These articles may serve as a substitute for the next best-seller business book.  One can gain so much insight and wisdom by simply accessing the information.  Similarly, the success stories presented on the Evan Carmichael site can lead the reader/visitor towards a greater understanding of how to “claim” one’s niche.  All business leaders that are highlighted on the site provide a testament to the importance of perseverance, determination, if not fearlessness.  One sample idea taught by Ben Cohen and Jerry Greenfield, founders of Ben & Jerry’s Ice Cream: “Don’t be Afraid to Go After the Big Guys.”  This is salient advice to me as we are competing in an over-saturated merchant account field, dominated by some big players … many who don’t play fairly.

I am also planning to allocate much time visiting the forums of Evan Carmichael.  Here are some of the areas covered (not an exhaustive list): Website Ideas & Updates, Startup Pitches!, Getting Financed!, Sales Marketing!, Entrepreneur Resources!, etc.  Any question related to starting or growing a business or ancillary business topics, such as franchising, are welcome on the forum.  It appears that several forum members respond to posts so help is readily available.

Evan Carmichael, the industrious founder of the site, also seems accessible and available to provide insight.  I am particularly awed by the blog he manages called YoungEntrepreneur.com.  In the blog, Carmichael provides business advice, showcases entrepreneur profiles, and tackles questions and issues presented by his readers.

So my fellow entrepreneurs, as you continue to surf the Internet for business advice -- particularly  for valuable advice that is free -- follow Evan Carmichael's stready current of business information to abstract pearls of wisdom. 

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To learn more about our merchant account services, please visit us at http://www.intelli-collect.com.

Retail merchants: Have you heard about the Fair and Accurate Credit Transaction Act, passed by Congress in 2003?  If not, please put on your “listening caps” as a federal mandate may directly affect your business operations and may pose a risk to your bottom line if you are out of compliance.

The Act was approved to safeguard your customers’ privacy, if not identity, by ensuring that receipts do not contain the entire credit / debit card account number.  Only the last five digits may appear.  Moreover, the card’s expiration date cannot be revealed.

There has been debate over the language of the Act, as some speculate that merchants will still be in compliance if their receipts limit the digits appearing or if receipts omit the expiration date.  In other words, both stipulations do not have to be followed.  Others contend that the truncation of credit card numbers and the exclusion of the expiration date are mandatory.

The Act’s waters become even murkier as there exists differing perspectives whether merchants’ receipts must also fulfill the aforementioned stipulations (i.e., must contain no greater than the last five digits and/or leave out the expiration date).  Typically, merchant receipts’ contain such data, potentially compromising customers’ privacy and security.  While one faction avers that the Act does not pertain to merchants’ receipts, another group asserts that that the law applies to both merchant and customer receipts and slips.

Regardless of the purported nebulous language surrounding the Act, enforcement is entrusted to the Federal Trade Commission (FTC).  But the law enables customers to sue for damage if a merchant is out of compliance and many are exercising this right to sue.  (Please note that customers can only sue for slips that are electronically printed, not ones that are written by hand or generated using a manual imprinter.)

Large companies, such as Rite Aid Corp., Wendy’s International Inc., FedEx Corp., and others have been subject to a class action suit as a result of alleged violations of the law.  Restaurants and/or restaurant chains, such as In-N-Out Burger, have also been grilled due to ostensible transgressions regarding the handling of customers’ receipts. 

While the defendants’ lawyers contend that such lawsuits are baseless, particularly when no financial harm has arisen to a customer, the plaintiffs’ lawyers claim that companies cannot circumvent laws, especially when there is potential for customers to suffer privacy/identity and concomitant monetary loss.

It may not even matter if any ostensible violation has been committed willfully or not.  A recent ruling by the Ninth Circuit Court of Appeals in San Francisco declares that companies are still liable for any breach of this law, regardless of the set of circumstances for the infringement.

In this context, it is vital that retail merchants ensure that the receipts that they provide to their customers (perhaps even their own receipts) have the least amount of financial information revealed.  Ensure that the credit card terminal that you are using truncates the account number, and, if possible, omits the expiration date.  (Card Association companies, such as Visa, mandate that their branded cards contain no greater than four of the last digits … and this must be followed to the “letter of the law.”)

Indeed, when it comes to your customers' credit card receipts, less is more.  Too much information shown can pose financial consequences to your business.

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To learn more about our merchant account services, please visit us at http://www.intelli-collect.com.

A friend of mine in the merchant account industry just told me a distressing story how his friend, a merchant selling books online, just lost his credit card processing capability.  Apparently, this merchant “lent” his merchant account to his wife who periodically sells jewelry.

The wife had a “no return” policy which infuriated the wife’s customer.  As a result, the customer initiated a chargeback, bringing the transaction under scrutiny by the husband’s merchant account provider. 

Remember, the husband, the merchant selling books online, only has the right to sell books and related items, bound by the merchant account agreement that he signed.  When the merchant account provider discovered that he was selling an unrelated item (jewelry) and for someone else’s business (even for a spouse), he was added to the Member Alert to Control High-Risk Database (the dreaded “MATCH” file).  The merchant lost his merchant account and perhaps any chance to ever obtain one – other than a third party processing account.  The MATCH file is tantamount to a blacklist in the merchant account industry.

Expectedly, the merchant was extremely upset and claimed that he did not even know that he committed any transgression.  But if the merchant read and/or more closely examined the fine print of the merchant account agreement, he would have known that factoring or laundering was against Card Association rules.  A merchant can only process credit cards for himself/herself!  Trouble ensues if the merchant allows any third party to use the account – under any circumstances!

A broader context of credit card processing factoring applies when a given merchant runs credit card transactions for any non-approved business entity – even his/her own, governed by the stipulations set forth in the merchant account agreement.  In the example above, even if the merchant ran the jewelry sale for his own expanding line of businesses, he would have encountered the same problem.  Indeed, he was only approved to sell books/related items – not jewelry.  In order to avoid any difficulty, the merchant needed to set up two different merchant accounts – one allowing him to accept credit cards for books and the other affording him the privilege of accepting credit cards for jewelry.  

I receive at least one phone call a week about this issue (i.e., accepting credit cards for two or more disparate businesses).  Invariably, my response is the same: You cannot process credit cards for businesses that are different, carrying their own distinctive risks, even if the businesses are registered under the same corporate or sole proprietor name.  I am simply trying to help merchants avoid this factoring pitfall – one that can have grave consequences for any business.

This is not to say that certain merchants do not try to circumvent the Card Association rules, surreptitiously accepting credit cards for one or more unapproved businesses.  But such action carries great risk as factoring is considered a form of fraud.  Even one chargeback (and factoring usually is associated with a high frequency of chargebacks) can open “Pandora’s box” and permanently close a business owner’s merchant account.  In addition, the business owner may also incur heavy fines, levied from the merchant account processor and/or their acquiring bank.  Talk about the high cost of doing business!  Just say, "No" to factoring! 

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To learn more about our merchant account services, please visit us at http://www.intelli-collect.com.