Best Practices to Accept Credit Cards Over the Phone

Industry regulations state that merchants are permitted to accept credit cards over the phone or in the mail, provided they follow the procedures disclosed in this article for the processing of such card transactions. First of all, it should be understood that the floor limit of all telephone and transactions is zero and retailers are required to obtain authorization approvals for each one such sale. Retailers need to also document the card transaction and send the sale data to the credit card company or association as described below. Additionally, for each merchant, the transaction form will indicate if their payment programs are primarily telephone and or mail order (MO / TO) sales.

Validating Cardholder Identity

For each mail or telephone order card transaction, the retailer should verify the address of the cardholder associated with the card account and validate the location for shipping with the customer by using the address verification service (AVS) procedures.

Documenting Payment Card Transactions

When they accept credit cards over the phone or by mail, retailers need to obtain the following data from their customer for each sale:

• Customer name.
• Customer's 16-digit card number.
• Card' "good-through" date.
• Customer's shipping address.

The merchant must keep all such information, together with the delivery date, for the document retention period that is stated in the merchant processing agreement. Retailers need to communicate the expected date of shipping to the consumer at the time of each telephone order being placed and then upon request by the consumer or the issuer.

Communication of Transaction Information

When you accept credit cards over the phone are required to communicate the transaction information to their processing provider each day in the form and format that is specified. All transaction information needs to be communicated to the processor through an electronic means of transmittal. The retailer is not allowed to transmit transaction information to the acquirer for items or services purchased by a customer until the product or services have been delivered or furnished to the consumer or at the very least have been shipped. The retailer is allowed, however, to accept a card for a deposit on a sale of item or services and the merchant is permitted to communicate the transaction data pertaining to such a deposit before the time of shipment or delivery of the item or services bought in such a sale.

You will need to follow the above guidelines for all of your phone sales and you will be sure to do itright every time and prevent customer disputes and chargebacks.