Credit Cards after our first full month

B

bodegahwy

New member
We started accepting credit cards during the third week of July. We did the full computerized set-up where the POS handles the card clearing and the slips print on the drivers run printer with the routing slip etc.

Sales for the month up 13% (But we have been running increases for 37 of the last 40 months)
Average sale for card purchases $34 which is 22% above the overall average for the month.
29% of total sales were paid by CC.
Fees were 2.6% of credit card sales or 3/4 of 1% of total sales.

A few headaches while employees get used to using the cards etc.

Full implimentation costs were high since we had to upgrade our software and add RAM to the computers in addition to the CC handling software, DSL connection etc.
 
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I have only had 1 charge back in 3 1/2 years and that one was only because the staff member did not follow policy.
 
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And even if you do get the odd chargeback, the profit on the increased sales from more sales and higher tickets will cover it…22% is a nice increase in average ticket…Although I am sure only a portion of it is because of credit cards…
 
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Are you getting your average credit card ticket from your POS or from your credit card reports? The credit card reports are going to include tips, artificially increasing the average ticket.

Edited to add: We’ve only had 1 chargeback in 4 years and it was legitimate. We accidentally charged a customer’s card twice. It was a very regular customer but he didn’t realize it would have been much easier to call us and get it credited.
 
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Excellent point on the tips Piper. Yes, I did take the data from the CC statement so that did include the tips on about half the orders (the other half tipped in cash)

I’ll have to go back and have another look. My guess is that the increase in the ticket average is closer to 10%. How much of that is due to the increased spending the CC guys predict and how much to people making larger purchase using cards is anybody’s guess.
 
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Don’t get me wrong, I’m not saying you shouldn’t have started taking CC’s.

Those of you who never get chargebacks, I wonder what your volume of CC processing is. Across 4 stores, I probably get 10+ chargebacks per month. None of them are “fightable” because they are ususally telephone transactions. Many of them are due to identity theft, so going all out with swiping and ID checking makes no difference.

I’ll give you an example. I’m looking at a list of charges to a card by a customer at 2 of our stores - sent to me by my processor. There is nearly $6,000 worth of charges to various places in a 2 month period - with over $300 charged at our stores. All of these charges are getting charged back because the “real person” says they never made those charges - nor did they even know they had that card. 🙂 $100+ of those charges to us were swiped - with ID checked. Does not matter one bit. We have to eat $300+. I have the address we delivered many of those orders too - no one cares.

Why? Because NO ONE is out a dime except us. I could go on, but hey - I’m the only one with chargebacks…
 
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Bodegahwy (and anyone else who cares to answer)…

Just curious what your procedure is for telephone CC delivery orders. Are your drivers asking to see the card at the door along with ID? Are they taking a physical imprint of the card at the door?
 
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RG

thats seems really high. I take a reasonable about of cc business and have (fingers crossed) only had a handful of incidents which occurred by staff not following our policy.

Talk us through step by step what info you take for the transaction and what info you take. Amongst other things we get our drivers to get a signature on the slip (even though it is card holder not present) and makes sure it matches that on the card. Its no guarantee that the it won’t get challenged but I do know of cases where the slips, and details of the delivery address (which macthed the cardholders address) were supplied and the charge-back was reversed.

Wiz
 
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Registered Guest:
Bodegahwy (and anyone else who cares to answer)…

Just curious what your procedure is for telephone CC delivery orders. Are your drivers asking to see the card at the door along with ID? Are they taking a physical imprint of the card at the door?
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Our first line of defense is to get the CVV on all phone orders. I know that it can also be compromised, but it adds a layer of security. We also get the address and zip code. It HAS to be the same as the address we’re delivering to (we make exceptions for businesses).

There’s a lot of people that will say “well, I’m at a friend’s house.” That’s a judgment call. If we know the customer well we’ll take it. Otherwise, no.

When you process, it will report if you had the CVV and address correct. PC Charge will allow us to stop any transaction where they aren’t correct.

So we know the billing address on the credit card is the same as the address we’re delivering to. That should eliminate card thieves.

Getting CVV and address will also turn the transaction into qualified and there could be a big difference in the fee you pay.

To avoid being scammed by the actual cardholder, check the signature against a driver’s license. The names should match, the picture should be the person signing and the signatures should match. I’ll admit we don’t check the signature against a driver’s license but that’s only because we haven’t had any chargeback problems (knock on wood.)

I only have one store, but we do about 75% on credit card.
 
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we do the same as Piper
  1. check cvv
  2. we ONLY deliver to the cards registered address
  3. we get them to sign and the driver checks the signature against the card
  4. only deliver to the house door (not outside etc)
We make an exception for point 2 above for hotel guests (but they must know the registered address and MUST have the card/sign it) I know this is risky but we’ve only had one instance of this out of a lot of business. We also allow an exception to point 2 where the customer has over 5 previous orders (i.e. they built up an order history and have a friend/guest stay who wants to pay).

As long as you explain the reasons for doing this (i.e. 2 above) genuine card holders don’t mind - we’ve had people move to the area and explained this and they’ve paid in cash.

The charge-backs we’ve had have always been related to point 2 above.
 
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If we limited to delivering to the card address we would not be able to take cards. First of all, nearly all locals have a PO box. Second of all more than half our business is tourists on vacation…

We do get the signature on all slips. The drivers want to do this anyway since that is how they get tipped.
 
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I can see that might be an issue for you. If you haven’t discussed this matter with your card provider then do check as in my case signatures alone are not enough to challenge a dispute/charge-back.
 
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bodegahwy:
If we limited to delivering to the card address we would not be able to take cards. First of all, nearly all locals have a PO box. Second of all more than half our business is tourists on vacation…

We do get the signature on all slips. The drivers want to do this anyway since that is how they get tipped.
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Check your merchant agreement - if the card wasn’t swiped, you must have an imprint of the card. Otherwise you will automatically lose any and every chargeback you try to fight.

Again, not saying you shouldn’t take cards - just mentioning how easy it is for someone to say “I didn’t make that charge” and how the merchant is helpless in fighting it unless you go through extraordinary hoops.
 
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“Piper” said:
Registered Guest:
Bodegahwy (and anyone else who cares to answer)…

Getting CVV and address will also turn the transaction into qualified and there could be a big difference in the fee you pay…
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I also thought this was true for years, but I finally questioned it enough times after constantly hearing the same response. The CVV does not affect rates at all…it is only for chargeback situations…we are lucky enough that we have never had a chargeback on deliveries…all we do is get the signature so we do not bother with all the extra steps
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Between our two stores we take about 45,000 in credit cards. Location #1 has been open 14 years location 2 almost 3 years. Never have we had a charge back. We take the number over the phone, they sign the slip when we get there. That is it…not all the other hoopla. I would much rather take a debit- pay the credit card fees and risk the charge back. We used to get hundreds of dollars in returned checks. People use credit now adays and it is much better bet than checks.

Ticket averages and tips are always higher on plastic.

Bodge congrats on your first month and I think you are going to continue to see the averages go up. I would deal with chargebacks when they happen.

Kris
 
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