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85787 Views 136 Replies Latest reply: Feb 22, 2014 1:23 PM by swlinphx RSS Go to original post 1 2 3 4 ... 10 Previous Next
  • swiss-house Contributor 260 posts since
    Jul 6, 2011
    Currently Being Moderated
    15. Jul 7, 2011 11:37 PM (in response to mooreva)
    Re: Accepting Credit Card Payments - A Warning

    Just a quick primer - I won't go into detail because I think using HA's system will be better for most people, but:

     

    If you set up a PayPal account, presumably to pay for something you bought online from someone else or as part of an eBay account, you can use that same account to receive money.  If you are receive payments in high volumes they force you to join their Merchant program which has higher costs, but typical uses like us, receiving only one payment a week or so, can slip under their radar.

     

    You simply give your renter your PayPal email account name, and they can make a payment to your account.  In fact, there is an area in your PP account where it can create an invoice and send the email to your renter for you.  It's pretty professional looking.

     

    To get your money out you must give them the routing and account number for one of your bank accounts.  In fact, this MIGHT be necessary to receive payments at all, I don't know since I've always had this set up with my own PP account since day one.  Once the renter's payment has cleared (typically only 1 or 2 business days) you can transfer the money to your own account.  Your only cost is the roughly 3% of the transaction amount, plus a 25 cent or so fee per transaction.

     

    Now the downsides:

    1: When there is a conflict, PP will always side with the buyer, and will often lock your account so you cannot receive any more payments through them.  This can wreak havoc on your payment process.

    2: Payments over a certain amount cannot be paid by credit card by the renter.  It requires the renter to set up a PayPal account and link it to their bank account so it can take an electronic check.  This is a HUGE, I mean HUGE hassle and renters absolutely hate it.  It takes days for the bank account to be verified, it's scary for the renter, and it's just plain weird. 

    3: If you take damage deposits by credit card, then refund them when you inspect the house after the renter leaves, you get charged the commission twice - a total of 6% overall.  Plus, too many refunds in a month raises a red flag and you may have your account suspended. 

     

    All those reasons, and more, are why we went with a 3rd party bank-based credit card solution.  It's pretty good, it's cheaper than PayPal, and it supports the ability to pre-authorize an amount without actually charging it - great for handling deposits.

     

    The new HA system is pretty close to the third party solution I'm currently using, and I will consider using it for some future transactions.  It doesn't support the pre-authorization feature right now, but they don't charge for the damage deposit transaction and refund, so it might just be a wash.  More importantly, the HA system doesn't require each merchant go through a PCI audit - a PITA if there ever was one.  PCI audits designed to make sure customer's credit card info is always protected which is important for large retail companies like Amazon or TJ Max.  But for little guys like us, the questions are way out of place - if I weren't a computer geek I wouldn't even know where to look for answers to their questions.

     

    Long story short - PayPal is a decent solution for people who sell things over the internet to get paid via credit card.  But there are better ways, including HA's new processing system.

     

    Pocono Swiss House

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  • bend2011 Contributor 163 posts since
    Apr 28, 2011
    Currently Being Moderated
    16. Jul 11, 2011 10:41 PM (in response to mle642)
    Accepting Credit Card Payments - A Warning

    Run from paypal!  Since they have been taken over by e-bay, they are pretty much exclusive to ebay.  They are not there to help the merchant. 

    They hold a third of your funds for 90 days if you use virtual terminal.

    You've got to have your ducks in a row if you want to have a shred of hope against them.

     

    My boyfriend sold a $1200 item, took the funds via paypal, the folks paid and picked it up.  After they left, they said they never recieved the item and paypal gave them they're money back and he's out the item and $1200.

     

    They also charge you monthly.

     

    I have looked into the HA credit card acceptance and it looks like a good system. 

    For the time being, I am am using www.squareup.com and it's awesome!  It's an Android, I-phone, etc. app.

    I have no complaints.  No monthly fees, any credit card accepted for 2.5% swiped or 3.5%+.15 otherwise which is mostly what I use.

    The money goes directly into your account and you can send a receipt to the customer so they know what the charge was for.

    I haven't delt with a chargeback yet, so I cannot comment on that.

  • sfvacationhut Community All-Star 643 posts since
    Dec 31, 2010
    Currently Being Moderated
    17. Jul 11, 2011 11:51 PM (in response to aznative)
    Accepting Credit Card Payments - A Warning

    AZnative, I feel for you!

     

    Thank you for supplying us with the full narrative.

     

    I hope you can still book the dates for January and February next year.

     

    In another thread, someone mentioned the rule about needing the customer's signature within a certain number of inches of the cancellation policy. 

     

    I used to require that the guests fill out the Payment Contract and Guest Rules and sign it and return it, but I'm not sure if the actual signature space was within the required number of inches of the actual cancellation verbiage.  So it might not have stood up to the credit card's scrutiny.

     

    Nonetheless, that's somewhat moot, for me, at this point, because in recent months I have switched to an e-mail agreement system.  Now I copy and paste the full text of the Payment Contract and Guest Rules in the e-mail for the guests to read (I used to provide it as a .PDF for them to print and sign and return to me).

     

    I also have them fill out a Guest Information form which includes their name, mailing address, phone numbers, e-mail, names and ages (if under 21) of all guests staying at the apartment, allergies, preferences, special accommodations, and "ICE" (people to contact In Case of Emergency).

     

    I tell them that they need to respond back as follows:

     

    (If the cancellation deadline has already passed ...)

     

    If you'd like to continue with the booking, please write back that you have read and agree to follow the terms of the Guest Rules and Payment Contract.  In doing so, please quote the following three sentences in your e-mail:

    "The deadline to cancel with no penalty is has already passed.

    There will be no refunds for any monies paid, other than the security deposit. There is no refund for early departure."

     

    (If the cancellation deadline has not yet passed ...)

     

    Please write back that you have read and agree to follow the terms of the Guest Rules and Payment Contract. Please quote the following four sentences in your e-mail:

     

    "The deadline to cancel with no penalty is July 1, 2011 (or whatever date it is).

     

    Cancellations must be submitted in writing to ______.

     

    After the cancellation deadline, there will be no refunds. 

    There is no refund for early departure."

     

    If they respond back without those sentences quoted, I remind them that I need an e-mail from them with those sentences, before I will process payment. 

     

    AZNative, or any other expert out there ... do you think that would be enough to pass muster with the credit card companies?  Is it enough that they are specifically agreeing to the contract via e-mail, without a handwritten signature?

     

    We went for nearly a year with the printed out application and signature process ... and I don't think we lost any reservations because of it, but it was a real PITA for some people, especially those with no access to a printer, scanner, or FAX machine.  And some of our international people ran into troubles sending us international faxes.  I felt so bad causing these well meaning people (our clients!) all of this extra hassle, when those things happened.  So I have been really excited about the idea that we could handle all of the contractual obligations by e-mail.  (I got this idea from a post by Paul Crockett in another HomeAway thread.) 

     

    But ... if "Giving the OK via e-mail" won't pass muster in the case of a credit card dispute, I will need to change my method again.  I might need to change back to doing the print-outs with real signatures? Or maybe even not take credit cards?  But then how would I take money from the international folks? Sounds like PayPal is no better ...

     

    What do you guys think?

  • mike-dfv Community All-Star 835 posts since
    Mar 5, 2011
    Currently Being Moderated
    18. Jul 12, 2011 7:39 PM (in response to sfvacationhut)
    Accepting Credit Card Payments - A Warning

    I'm nowhere near being a lawyer, sf, but I don't see how this would be much different than checking an agreement box then clicking on "submit" to complete an online version. I think HomeAway now includes the online form as part of their new Reservation Manager.

     

    I am using Paypal now, but have registered for the HomeAway webinar on Reservation Manager. If I like what they show tomorrow, I may be moving over to their system.

     

    Mike

  • aznative Contributor 103 posts since
    Feb 8, 2011
    Currently Being Moderated
    19. Jul 13, 2011 3:40 AM (in response to sfvacationhut)
    Re: Accepting Credit Card Payments - A Warning

    sfv - thanks for the condolences. To answer a couple of questions... first yours... as you could see I spent months speaking with the Risk Assessment Departments of two different processing companies, and also spoke with other merchants to compare what they have been told about this policy/signature situation and I feel very confident in recommending to you that you do NOT assume that any "OK" via e-mail is acceptable to VISA, MC, etc. Everything we have been told is that it MUST be a signature or initials.  As you probably read, we even had e-mails that went back and forth between us and Mr. Wonderful where he flat out admitted that he knew his deposit was non-refundable.  This is when you really have to wonder if there is such a thing as Karma (and also, what the %$^# is wrong with VISA that they wouldn't side with their merchant.)

     

    To mooreva - you bring up some very good points.  My husband was in real estate for 30+ years.  During that time he did property management for about 10 years. Yes, the Arizona Department of Real Estate required him to maintain a trust account separate from his general Corp account. They do random and initiated (which he never had) audits of the trust accounts, and he had a crackerjack bookkeeper (she was a licensed CPA who didn't want to work full time) and he was never so much as a penny off during an audit, but in that business, you never comingle those funds.

     

    However, those are properties that belong to other people. It would not be a legal issue to comingle the funds if it is your own property.  In my husband's opinion, (and, as an attorney, your opinion would be just as valid) if it was your property, anything except a sole proprietorship, such as a corporation would only require the proper verbiage in the contract to allow (disclose) that their money will be comingled with that of the corporation. In the situation of a sole proprietorship (as most would be) this wouldn't even need to be disclosed, as you ARE the sole proprietor.

     

    As of right now, we are following what Flagship has mandated to us -- that we take a deposit on a credit card no further out than 90 days, but are absolutely meticulous about getting the contract back, signed, with the cancellation policy and any other significant policies (such as one where we have their permission to charge their credit card for any monetary damages that they cause that exceed what is covered by the insurance) initialed in the margin of the paragraph of the contract.

     

    Beyond 90 days, we are asking for a cashier's check by mail or FedEx, and then AFTER we receive the signed contract we deposit the check and feel okay about spending the money.  BUT, you should see our contract now!  As sfv mentioned about their international guests, I actually both verbally, and in writing, apologize to our guests about what they are about to receive, and try to soften it by saying that "our contracts are stuffy, but we aren't! Once this is out of the way we'll get on with the fun part of your vacation planning!"  I hope it helps, but I think many guests are flabbergasted to see all of the CYA stuff we now have them initial. I imagine that not many homeowners have eight pages (nine with a pet) for contracts and Addenda, as they usually write or call, and we almost lost one guest because they wanted their son in New York who is an attorney to look it over first!

     

    We do still take a credit card regardless, and we feel comfortable (after all the initialing about it, etc.) taking a CC for the final deposit 30 days before their arrival, and for any incidental expenses or damage above and beyond the insurance coverage (again, ALL in the contract and INITIALED of course.)  I was really wondering if the new HomeAway plan was going to be any help, but if you think about it, they're still dealing with VISA, MC, etc, and they're the bad guys, and as for an e-check... all of us are no different than a hotel.  They say they want your CC to make it convenient to charge things to your room, but really, the bottom line is they want it to have a way to charge you if you skip out on paying for an extra night, etc. (in our case, damages, theft, not vacating the house, etc.)

     

    Life is just too complicated.

  • aznative Contributor 103 posts since
    Feb 8, 2011
    Currently Being Moderated
    20. Jul 13, 2011 3:53 AM (in response to mle642)
    Re: Accepting Credit Card Payments - A Warning

    Sorry to be lazy, but for those of you who are really familiar with HA new system, doesn't someone pay by a credit card that is a Visa or MasterCard?  Aside from the slick-sounding features for invoices and virtual terminal, how would anyone get away from all of the same issues of the policies of the CC companies?

  • marym Active Contributor 463 posts since
    Feb 10, 2011
    Currently Being Moderated
    21. Jul 13, 2011 5:45 AM (in response to mle642)
    Re: Accepting Credit Card Payments - A Warning

    You know, I acknowledge that there's a certain convenience for guests to be able to use a credit card, but I've just never been interested - just adds another party to the equation, there's a cost to doing business that way, etc.  I've always just accepted personal checks/money orders and scheduled payments such that they've cleared the bank before I send the keys.  Simple, done, no problems....

  • sfvacationhut Community All-Star 643 posts since
    Dec 31, 2010
    Currently Being Moderated
    22. Jul 13, 2011 10:24 AM (in response to aznative)
    Re: Accepting Credit Card Payments - A Warning

    AZ native, this is a great point you have brought up.

     

    In the HA system, people supposedly can submit payment by Echeck or credit card (Visa, MasterCard, etc).

     

    One question I have ... is there a way to FORCE people to use Echeck instead of credit card, so we don't have to deal with credit card headaches?  Or is the choice always left up to the customer?

     

    It would be great if there was a box that the owner could check, when sending the Payment Invoice, which says something like "Accept Payment by Echeck Only."  Then the customer would only be given that option when he/she receives the invoice.

     

    Also note: in the HA system, we are able to copy and paste our Guest Rules into a text box for sending to the guest.

     

    I'm not sure, but I believe they may have something that requires the guest to click a box, agreeing to those rules? I didn't see such a checkbox when I looked into the system, but it might be there. 

     

    Regardless, it certainly wouldn't be a signed document or a handwritten initial.  If that's what the credit card companies require, we'll be in a real pickle, in case of any chargebacks through the HA system.  But it seems the folks at HA must have ironed this out already ...

     

    Hopefully one of the HA editors will be to answer this.

     

    Also ....  when I last checked into the HA payment system, which was about 6 weeks ago .. the cancellation policy is sort of written into the main text that HomeAway sends to the guest.  It was something like "Refunds will be made in full up to ______ days prior to arrival."  (Just going off my memory here.)  The only thing we, as owners, were able to change, was the number of days in advance for which full refunds would be made.  This, for me, is a problem ... I actually like to charge a cancellation fee, which would be deducted from the refund.  But this didn't seem possible with the way they had the HA system set up.  Upon seeing this, I changed my policies / guest rules so that we no longer have a cancellation fee.  That's how determined I was to use the HA system, because it looked so much easier than what I had been doing.  But I must say I wasn't happy about having to get rid of our cancellation fee.

     

    Maybe HA has changed the cancellation wording / set-up now, I hope so!  I've been on vacation myself, over the last month and haven't had much time to check into it lately.

  • aznative Contributor 103 posts since
    Feb 8, 2011
    Currently Being Moderated
    23. Jul 13, 2011 4:58 PM (in response to sfvacationhut)
    Re: Accepting Credit Card Payments - A Warning

    sfvacationhut wrote:

     

    One question I have ... is there a way to FORCE people to use Echeck instead of credit card, so we don't have to deal with credit card headaches?  Or is the choice always left up to the customer?

    sfv - It only makes sense that you should be able to only accept payments the way you want to accept payments. If you are referring to this in the context of the HA system, then I don't know, but I wouldn't like a system that forced me to accept credit cards if I didn't want to.

     

    sfvacationhut wrote:

     

    Regardless, it certainly wouldn't be a signed document or a handwritten initial.  If that's what the credit card companies require, we'll be in a real pickle, in case of any chargebacks through the HA system.  But it seems the folks at HA must have ironed this out already ...

     

    Okay, I just received some really bad news for us. I called our Flagship Chargeback Dept and posed as a potential customer with questions as to what kinds of things can be put on credit cards, and how VISA and MC handle chargebacks in cases of dispute.  If anyone would like to verify any of this information for their own particular situation and set of rules you must be a merchant to get the phone number, so here is how to contact them:

    • Phone 1.800.554.4777
    • Press "4" for the Chargeback Department
    • When offered to narrow your questions don't press anything... just stay on the line
    • When it asks for you to put in you merchant number don't do anything and it will ring you through to the Chargeback Department.

     

    I would recommend anyone considering using credit cards to do this, as you can get your information, as it pertains to your rules and practices right from the source. Just do what I did and say that you are considering signing up with Flagship, but you have reservations about the risks involved with chargebacks, and ask any questions that you may have about your use of taking credit cards.

     

    By the way, Google Flagship.  They are one of the best processing companies.

     

    Anyway, here is what I was told:

     

    • All of the initials in the line item for cancellations are exactly as I have been writing
    • Now, the bad news for us:  I found out, to our chagrin, that VISA will NOT allow their credit card to be used for damages or theft!  I didn't even know this until just now! I also found out that MC has slightly different rules!  It got into a bunch of picky little requirements.  In either company,  it came down to the only way to have a chance to win a dispute over damages and theft you MUST have an imprint or a swipe of the credit card, which we all know is impossible, not only because of distance, but in the case of a virtual terminal, we don't even have a machine! Now, I didn't think to ask this: what if we created the charge slip through a swipe, sent it to the guest, had the guest sign it, and then have them return it to us.  But, brother! What trouble!
    • Credit Card companies can be okay for charges to a card for "honor bar" type items; for instance, we have a wine honor bar here that has a price list, and if someone want a bottle of wine they are welcome to use it, and then we charge their credit card after they leave and we can see what is missing.  But even this is "iffy."
    • Bottom line from the Chargeback employee - credit cards are very risky, and if there is a dispute that you don't like the outcome of from the chargeback, you can take the guest to court, but who wants to do that??!
    • She recommended to me that you can go on VISA.com or MC.com and go to "Merchants" then "Operations and Procedures" and get an overview of some of their rules, but the entire .pdf is over 100 pages!

     

    Even HomeAway says in their promotional literature that they will go to bat for you in the event of a chargeback, but the policy is what it is, and if you haven't abided by it, it won't matter how hard the processing company fights for you... you will lose.

     

    This whole thing is making me extremely discouraged about using credit cards. I don't know what to do about a security deposit other than keep using the insurance company, but, so far, the guests are not reporting their damage before they leave, so that means doing a final walk thru before they check out.  For us, doing that at 7:00 in the morning is impossible, because of our health issues. So far they have been little things, so I haven't persued them, but after awhile I'm going to have to because it's starting to add up. Now that means taking the security deposit by check too!

     

    Bottom line - it would be so nice if we could all offer the same conveniences for guests as hotels do by allowing guests to put a credit card on file and enjoy their vacation, from the minute they book, to the minute they check out, but for some reason we aren't able to offer these same conveniences to our guests.

     

    And yes, I agree, it would be nice to have the HomeAway rep step in here and add some information, but I think maybe they are not because we wouldn't like the answers!  All they can do is help you minimize risk.  But in the end, if you get a real peach of a guest like we did, you are up a creek without a paddle.

  • sfvacationhut Community All-Star 643 posts since
    Dec 31, 2010
    Currently Being Moderated
    24. Jul 13, 2011 3:55 PM (in response to sfvacationhut)
    Accepting Credit Card Payments - A Warning

    Yes, aznative, when I asking, "Is there a way we can FORCE the person to use Echeck instead of credit card?" (paraphrasing, not quoting), I was talking about, within the context of the Homeaway Reservation Manager system.

     

    The way I understood it, the customer would receive an invoice that would allow them to choose whether they wanted to pay by Echeck or by Credit Card.  But now ... given all the headaches we've heard about, especially with regards to AZNative's credit chargeback woes ... we can see the real value of a customer who will pay with personal check sent in the mail, or Echeck sent electronically.  I would hope that Echeck is not processed through Visa or Mastercard and therefore would not be subject to the ridiculous rules that AZNative has described for us.

     

    Also, I'd like to give a bit of a discount to people who pay with Echeck instead of credit card. 

     

    Therefore, I would like to be able to ask the customer, are you paying with Echeck (funds deducted directly from you bank account) (for a discount), or are you paying full price with a credit card?

     

    If the person answers, "Yes, I would like to pay the discounted price using Echeck, so the funds come directly from my bank account," then I would like to send that person a invoice that shows the discount applied.

     

    Therefore, I need to be able to send that persno an invoice that ONLY enables them to be pay by Echeck, not by credit card.

     

    My question is, does the HomeAway Reservation Manager system allow us to do this?

     

    Obviously .... I don't want to give the person the discounted price for using Echeck ... and then send them the invoice with the discounted price ... and then find out that the invoice gave the customer the choice of using Echeck OR credit card.  Because then the person might say, "Oh cool!  There's a credit card option on here.  I'll use my credit card instead and get some miles or points."  That would be a real bummer for me, because the customer would be paying the DISCOUNTED PRICE that was intended to be only for people paying with Echeck.

     

    So I just wanted to find out if the owner is able to limit the payment options for the customer, whenever he/she sends the invoice.  Does anyone know the answer?

     

    Thank you!

  • aznative Contributor 103 posts since
    Feb 8, 2011
    Currently Being Moderated
    25. Jul 13, 2011 5:37 PM (in response to sfvacationhut)
    Re: Accepting Credit Card Payments - A Warning

    sfv - here's another picky point I ran across in my trecherous travels with chargebacks.  This has nothing to do with chargebacks, but it is another ridiculous rule with VISA.

     

    Let's say that someone calls you and wants to give you a corporate credit card to pay you. If you read your contracts carefully, corporate credit cards cost a higher rate by quite a bit.  i don't have the number in front of me, but it's something like 2.5% more than a consumer card.

     

    So, let's say you ask the guest if they have a personal card that they could use instead, because [whatever - you don't take corporate cards.] You are not allowed to do this! If they want to pay with a corporate card it is a violation to ask them to pay with a card with a lesser interest rate! Now, how anyone would know that you did this, I don't know, but if you ended up in a dispute with this cardholder and it came out that you turned down their corporate card, you would be in hot water again.

     

    I asked, "Can't you even ask them if they wouldn't care which card they use?" and I was told that, no, this is a violation to even bring it up.

     

    I now understand why small businesses really don't like to take credit cards.

     

    p.s. I edited my last post, and I can't remember if it was only for typos or if I added any information.

  • aznative Contributor 103 posts since
    Feb 8, 2011
    Currently Being Moderated
    26. Jul 13, 2011 5:00 PM (in response to marym)
    Re: Accepting Credit Card Payments - A Warning

    marym - how much do you get for a security deposit, and do you know what the law is regarding how many days one must return the deposit or retain something for damages? Have you ever had to keep some security deposit?  How did that go over with the guests?

  • New Member 2 posts since
    Jul 13, 2011
    Currently Being Moderated
    27. Jul 13, 2011 5:29 PM (in response to mle642)
    Accepting Credit Card Payments - A Warning

    MLE642,

     

    I read your post and you have recieved some good advice.  Pay Pal is not a traditional merchant account and the process they operate with are much different bacause of that fact.  They by nature of their relationship with Visa / Master Card have to automatically side with the card holder (as do most processors), however with in not having a traditional account can mean that they can hold your funds for months, upto 12 with out paying you, even if service has already been rendered.

     

    I would suggest going with a traditional merchant account.  I work with several homeaway owners in assisting with their processing and have help manage cost, perfom the PCI certification and I think you will find it is much more flexible and really not more expensive. Let me know if you have questions or I can be of help.

     

    Sincerely,

    Ryan

    ryan@rynoco.com

  • New Member 2 posts since
    Jul 13, 2011
    Currently Being Moderated
    28. Jul 13, 2011 5:31 PM (in response to mle642)
    Accepting Credit Card Payments - A Warning

    O, I would also add that you may incur more issues with Amex than you will with other card bands, and many people I know in your business have done way with them all together.

    Ryan

  • marym Active Contributor 463 posts since
    Feb 10, 2011
    Currently Being Moderated
    29. Jul 13, 2011 6:54 PM (in response to aznative)
    Re: Accepting Credit Card Payments - A Warning

    We charge a $250.00 sec. deposit.  (I see that for some similar rentals in our area, some people charge from $300 to $500 - I just think that's too much.)   Thankfully, we've never had to withhold any funds, knock wood!! And the ones where it's been a close call,  - red wine spilled on rugs - juice on bedspreads - it just wasn't worth the hassle of explaining that I thought this was above and beyond normal wear and tear.  As far as the law re: returning sec. deposits, we're in PA, and our rental is in NC.  I put in our contract that it's returned w/n 20 days of receiving the keys back.  It's usually the day after the keys are returned, so again, I don't think there's a problem.  (Although it might be a good idea for me to check on that....! )  I must say, we've been extremely fortunate with the calibre of our guests - I have read some real doozies on this site!!

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