Page 18 - GBC Summer ENG flipbook 2024

18
Golf Business Canada
• You can apply brand-level surcharges (e.g., all Visa cards) or product-level surcharges (only particular lines of cards, e.g., cash-back cards or travel reward cards). However, you cannot do both, and it’s unlikely you’ll ever have the technology to surcharge different fees for product-level lines of cards, like cash-back cards or travel reward cards.
Merchants need to ensure that their payment gateway or processing equipment is reprogram- med to record the surcharges accurately, following the card network requirements.
Also, research indicates that some GMS providers cannot distinguish between credit cards when you implement a surcharge, which is especially concerning when an American Express card is used. So if you are surcharging one, you are surcharging all – and that can cause trouble, both legally and with the respective bank card networks.
The workaround is cumbersome. It requires staff to inquire from the customer if the card they’re using is debit, credit, or American Express and surcharge accordingly. Everyone who processes a transaction at the course would have to adhere to this policy. Your online store would also need to do the same.
It is recommended that you ask your GMS provider, or prospective ones, how their technology manages surcharging if you determine it’s best for your business. As customers, it is important that you encourage your current or prospective GMS providers to build programming that automatically distinguishes which bank cards and types of bank cards can be surcharged. We see this currently in payment systems such as grocery stores and gas stations. It can be done. But until it is, it might be best to forego surcharging altogether.
“Card networks and processors alike view in-person transactions
as the least risky because the card is present—making it harder for a fraudulent transaction to occur.”
HIGHER FEES ON CERTAIN TRANSACTION TYPES
Card networks and processors alike view in-person transactions as the least risky because the card is present—making it harder for a fraudulent transaction to occur.
However, if you have recurring payments that are processed online (i.e., the card is not present), there’s a higher chance of the cardholder disputing the charge. This type of transaction has a steep cost added to the interchange rate.
Card Not Present (CNP) transactions for prepaid greens fees also come with a higher cost. You need to do a cost-benefit analysis on how and when you should use CNP, as transacting on-site will always come with the lowest fees, but there is certainly a benefit to your bottom line of having tee times prepaid to eliminate potential “no-shows.”
Open tabs not closed within four to six hours cause credit card transactions to be downgraded, increasing the interchange rate depending on your contract with the bank. The most common cause of downgraded transactions is the delay in applying the “tip adjusted” amount to the final tab before closing or batching at the end of a shift or day.
IT’S AS BAD AS BARTER
Beware of “free software” in trade for bank card processing fees. The sum of the processing fees multiplied by the number of card transactions will far exceed the cash price of the software – unless a cap is placed on an agreed-to maximum amount of processing fees paid. Theoretically, this should not exceed the cash price of the software (and beware of a quote inflating this), plus a small markup as the GMS provider assumes the risk that transaction volume decreases.