Banks offer various rates for processing credit card transactions depending on how the information is given to them.

Banks may charge a higher rate for processing paper transactions, simply because of the labor involved in keying in this information. The alternative is to key the information in yourself at a later date using an electronic terminal. The rate for this is usually lower than the paper processing method.

The increase in telephone, mail order, electronic and Internet credit card sales has increased the exposure for fraudulent credit card transactions. Banks are changing the requirements on how the transaction was processed. This is done to reduce the ever-increasing level of credit card fraud. You no longer need the actual credit card to make a purchase. Simply knowing the account number and expiration date will suffice. Obtaining a true card imprint along with a guest signature is the best method to reduce disputed transactions in the future.

Cashiers fill out the total amount of the payment on a multi part receipt. Guests sign for this amount. The draft is run through a credit card imprinter to record the card number, cardholder name and expiration date.

Advantages:

• You can process many transactions at a time, limited only by the number of imprinters available.

• You can also hand write the information on the sales draft, but this leaves room for errors.

• You have an signed agreement between you and your guest to pay the appropriate amount

• You have a paper trail that can be used to reconcile the auction proceeds and collections

• Your guest has a paper trail that can be used to document the transaction and can be used for tax deduction purposes in the future

• Transactions for the wrong amount are simply torn up

• Risk of losing the actual credit

• Transaction is not approved by the bank

• Possible higher rate charged by the bank for processing paper or processing a manually keyed in transaction

• Possible transposition of credit card numbers when actually keying in the information.

Cashier runs the transaction through an electronic swipe terminal, keys in the amount of the sale. A paper transaction receipt is printed for signature. The terminal calls the processing center and obtains a transaction approval or decline.

Advantages

• Lower rate for processing transaction means more money for your organization (check with your bank)

• Immediate approval or decline of transaction

• No need for organization treasurer or volunteer to key information in at a later date

• No chance of error in transposition of credit card numbers as these numbers are read from the magnetic stripe

• Rental of multiple swipe terminals is costly

• Installation of multiple telephone lines into your hotel or event venue is costly, especially when it is used for such a short time period. (I estimate no more than 2 hours of actual processing time)

• Existing or installed telephone lines may not work and no service technician is available until normal working hours. Meanwhile, your event must move on. (This has actually happened)

• Each transaction can take several minutes, which slows down overall processing. Your guests are waiting and long lines develop.

• If the transaction is declined, your guest, cashier and everyone else knows it. Use a second credit card and the transaction processing time is at least double.

• Risk of losing credit card is higher than the manual imprint method depending on actual cashiering scenario used

• Cashiers may not know how or are not authorized to process "credit" transactions. You cannot simply tear up or void an electronic transaction

• Guests may also change their mind on part of the total sale and a "credit" transaction needs to be processed.

Transposition of transaction dollar amount when keying in. Processors are in a hurry and are rushed when guests are waiting impatiently to process payments. If a higher dollar amount is misposted, the guest’s credit limit is often hit for this wrong transaction. The available credit limit is now reduced, limiting future sales. Corrected transactions further exacerbate the problem. Credit Card Processing Centers often limit the number of transactions from a particular card at any one time. This is done to reduce fraudulent transactions. You must then call the processing center to handle it. In addition you must process a "credit" transaction to undue the incorrect "debit" transaction

Use a multi part paper voucher immediately.

Another cashier or group treasurer uses an electronic swipe terminal in the back room to process transactions as quickly as possible

Or

Another cashier or group treasurer uses an electronic swipe terminal in the back room to process specific high dollar transactions as quickly as possible.

Advantages:

• Processing is handled the night of the event

• Declined transaction may be handled if the guest has not yet left for the evening and you can still locate the guest on site.

Disadvantages

• Phone line installation is costly and subject to technical problems especially for the short time it is used.

• Additional cashiers are costly

• Group treasurer may not want to leave the event to handle this process during the event itself.