Best Card Acceptance Practices for Car Rental Companies

The following best card acceptance practices should be taken into consideration by merchants selling airline tickets:

• Obtain an incremental authorization approval if the car rental period is extended. When a customer wishes to extend the rental car period beyond the time frame of the original agreement, an incremental authorization approval needs to be obtained for the additional transaction amount that will be generated by the car rental extension. The following best practices should be applied:
  
  • Standard authorization procedures should be followed to obtain an approval for the incremental transaction amount.
    
  • If a "decline" response is received, the customer should be contacted and an alternative payment method should be requested for the amount that was not approved.
    
• Settle only for the cumulative approved authorization amount if an incremental authorization was declined. Applying good settlement practices will help minimize chargebacks, processing costs, and potential losses when card issuers decline incremental authorization requests.
  
  • Submit a settlement transaction for the total approved authorization amount without including any amount for which authorization has been declined.
    
  • Obtain an alternative form of payment for the declined incremental amount.
    
• Submit an authorization reversal if the originally approved authorization amount exceeds the actual car rental cost. In some cases, the actual cost of a rental car may be less than the amount previously estimated for the authorization approval. To complete settlement and to avoid tying up the customer's credit, an authorization reversal must be submitted for the difference between the authorization amount and the actual rental agreement.
  
• Understand and apply the final authorization and the 15 percent rule. At the end of the car rental period, authorization is required in the following instances:
  
  • If there was no previous authorization the total transaction amount must be authorized.
    
  • If there was a previous authorization, and the actual final transaction amount is more than the previous authorization amount, the "15 percent" rule needs to be applied to determine whether or not an additional authorization is required. To do this:
    
    • Add 15 percent to the previously authorized amount.
      
    • Compare the total (sum of authorization plus 15 percent) to the actual transaction amount.
      
  • If the actual amount is more than the total, an additional authorization is required for the difference between the original authorization and the final transaction amount.