Do you accept credit cards? I’m going to guess the answer is yes. 60% of transactions in the self-storage industry are credit card transactions. Credit cards are great; they are easy, quick and can be held on file. Some even call them the “no late fee guarantee” if stored on auto pay.
What you might not have known is that the U.S. accounted for 51% of global payment card fraud costs in 2013 (BI Intelligence). Credit card fraud and transaction disputes are commonplace. The last thing you want is for a customer to dispute a valid charge.
Through experience, we have some tips to help you minimize the risk of a valid charge being disputed. Follow these guidelines to help minimize invalid disputes.
1. Obtain an authorization for every transaction.
2. Swipe the credit card if the customer is present.
3. Do not complete any transaction if the authorization request was declined.
4. Get the cardholder’s signature.
5. Enter each transaction into the POS (point of sale) only once and deposit it only once.
6. Communicate return, refund and or service cancellation policies to the cardholder.
Why get the cardholder’s signature on every in-person transaction? If there is a signature on file for the transaction, your merchant provider is able to dispute the customer’s dispute. If there is no signature on file, they have less ability to dispute and you may be accountable for returning those funds to the customer’s card. Before you add the customer to auto pay have their signature on an auto pay form that agrees to be placed on auto pay for the duration of their rental. While it’s not guaranteed protection, it will allow your merchant provider to at least dispute the first round. The credit card company can always come back, but at least you have some form of verification that the charge is valid.
Additionally, do not accept a credit card payment on a unit in lien. I spoke with a self-storage owner recently who accepted a credit card payment for a customer in lien. As the customer was leaving, with the items from within their self-storage unit, they told the owner they would be disputing this card transaction with their bank. The owner had no signature for the transaction and so is powerless to dispute the customer’s dispute. You must have a signature for that specific transaction. Several hundred dollars gone that was charged validly. The lesson he learned the hard way? Only accept cash, money orders or cashier’s checks when tenants are in lien. Do not accept credit card or personal check payments.
Be a savvy operator. Always get signatures for in-person transactions and make sure to have an auto pay form signed and on file before adding any customer to auto pay. Swipe the credit card if the customer is present. Do not accept a credit card payment on a unit in lien. Don’t let yourself be duped. There will always be credit card disputes, some valid others not. There is no sure-fire way to avoid a credit card disputes at your facility, but there are many ways to be a smart operator.
Have any questions? Ask us below or provide other good guidelines to follow.