Why and How Hotels Should Optimize Their Credit Card Best Practices
‘Best practices’ is a phrase used to describe optimum procedures and actions that should be carried out in a specific setting or situation. Somehow, the phrase, almost invariably, connects with the hospitality industry — an industry that runs on its predetermined best practices.
The hospitality industry has seen widespread usage of credit card processing services and related technologies. David Pavelko, the travel partnerships director with Google says, “Hotels like Hard Rock, Marriott and Omni Hotels have integrated their loyalty programs with Google Wallet and are seeing great results.”
Another instance of a revolutionary idea is the wearable Smart Watch that can connect with hotel customers.
Of course, with extensive use of a service of this nature, issues do crop up from time-to-time, both on the hotelier’s end, and the customer’s, too.
Neither outcome is desirable for a hotel owner, so to avoid these situations, most hotels follow an established code of conduct – credit card best practices for hotels. Some hotels establish their take on these tried and tested best practices, so the process may vary in these places. Sometimes this happens because a hotel owner has found a better method of handling a particular situation. More often than not though, these changes are borne out of ignorance and have the potential of causing harm to both parties involved.
Here are the top best practices that hotels should follow to make sure they don’t lose money
- Settlement of charges
- Acquiring customer information during reservation
- Suppressed codes
- Submitting information, and obtaining signatures
- Authorization
- PCI compliance
It is advisable to settle your charges within two days of the check out at the very most. Ideally, batches should be processed for settlement daily, even weekends. Delayed clearances invite additional interchange fees, which is not desirable for hotels, where credit card transaction fees are a high enough expense already, especially when you consider the sheer volume of payment processing systems used in the hospitality industry.
When accepting phone or online reservation, it is beneficial to acquire all the required consumer information at that very juncture. The information once acquired, should be relayed back to the customer in a confirmation e-mail. The email must contain the following information – the cardholder’s name, billing address, phone number, account number, the hotel’s name and official address, the rate of accommodation, charges made for the reservation, and all other important details about the reservation. These details must include reservation cancellation information like how to apply for a cancellation, and the terms and conditions involved. The e-mail must also contain the hotel’s customer service numbers, the customer’s reservation code (clearly visible), and a written confirmation message assuring the customer of the reservation. This information helps when disputing customer no-shows.
Credit card authorities sometimes ask for the card number to be partly hidden on receipts (if this requirement is compatible with local laws). Visa, for example, has a rule to this effect in place since the 1st of October 2014 as stated in Visa’s acceptance guide for the lodging industry.
All information as required by your merchant account provider should be submitted during check-in and check-out. Information such as the room number and folio number are vital, and if not keyed into the system, can not only lead to a higher interchange rate but also open the door for customer disputes.
It is standard practice to obtain authorization during check-in, but there are certain procedures involved here, too. Standard procedure dictates that authorization should be acquired for the entirety of the customer’s stay, and must also include taxes. This protects the hotelier’s interests in case of potential issues at a later date. If the customer’s stay is extended, fresh authorization should be acquired to include this extension, or a weekly billing cycle should be enforced. The authorization code should also be included in the settlement record after checkout to ensure that no dispute arises. Furthermore, if the authorized amount exceeds the final bill amount, an immediate authorization reversal should be processed. This protects the interests of the customer, causing them less inconvenience, and regularly ignoring reversals can also incur further charges from the merchant account.
Chargeback is a bane for all businesses that use credit card processing; more so for the hospitality industry. To ensure minimum chargebacks and lower interchange rates, the Payment Card Industry (PCI) Data Security Standard (DSS) compliance is a must. This compliance also protects your customers’ sensitive credit card information.
CreditCardProcessing.com reaffirms the fact that the hotel industry is driven by credit cards and that’s why all relevant businesses need to beef up their credit card processing systems. What’s more, the relationship between hotels and credit cards is so strong that a few credit card processing firms even offer a special payment processing package that is specific to hotels.
If you follow the aforementioned best practices, you can rest assured that your hotel will suffer from fewer interchanges, will be protected in case of disputes, and will be able to make a strong case for protecting its interests if a customer makes a reservation but doesn’t turn up.
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h2>Credits
A pro gamer, a great baker, and a tech-savvy entrepreneur with an insatiable appetite for the good life, so to speak — that’s Jordan Greer for you! But more importantly, he indulges in writing blog posts to express his thoughts on business and technology and other related aspects — investment, personal finance, credit cards, and payment processing.
Apart from managing his small business with aplomb, Jordan keeps himself busy by keeping a close eye on the new technology in the market and tracking business trends.
With a fresh outlook and a young soul (like many entrepreneurs looking to make it big in the business world), Jordan shares his professional experiences and the knowledge he’s gained from them through his posts.
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Are Morch is the founder and owner of Are Morch – Hotel Marketing Coach. Get more from Are on Facebook | Twitter | LinkedIn | Pinterest | Instagram| Podcast