Checkout Fees Not Allowed on Debit Cards

Effective January 13, 2018 surcharges (“Checkout Fee”) on credit and debit card transactions in the European Union are prohibited.

In the United States, confusion about checkout fees still lingers; here are some facts you should know:

1.  The surcharge only applies to credit cards; it does not apply to debit cards (Advantage Checkcards for example) or prepaid cards (gift cards for example).

2.  Cardholders who use a debit card or prepaid card at checkout and choose the “Credit” button in order to make a “signature” purchase should not be charged the checkout fee. If a store attempts to add a surcharge on a purchase made with an Advantage Checkcard, cardholders should inform the clerk they are using a Debit Card and not a Credit Card and the surcharge is not allowed.

3.   The Checkout Fee may not exceed four percent (4%) of the transaction amount and merchants must disclose the actual dollar amount of the surcharge on the receipt. For credit card returns, a prorated share of the surcharge should be refunded as well.

4.   Merchants who implement the Checkout Fee are required to post a notice at the point of store entry and at the point sale. Online merchants must post a notice in the first web page that references credit card brands. The disclosure must include the amount of the surcharge and the fact that the fee is being charged by the merchant, not the card issuer.

5.   Some merchants will charge a “convenience fee” to the cardholder for using a card for their purchase, for example, taking online payments for rent rather than accepting checks only.

6.   Merchants are allowed to require minimum purchases for credit card purchases — up to $10.

7.   Merchant are allowed to offer discounts for cash, checks, or other non-credit card means of payment.

8.   Several states have laws restricting surcharging; if you suspect a violation in these states, contact the state attorney general’s office.

9.  Cardholders may report merchants charging excessive Checkout fees, or surcharging debit or prepaid card transactions, or setting minimum debit purchase requirements by going to this website and filling out the “Report a Merchant Violation” form: www.visa.com/checkoutfees.

10.  For FAQs and information about credit cards and debit cards visit www.knowyourcard.org.

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Charitable Giving: Help Cardholders Make Sound Decisions

About 40 percent of all donations are made in the last few weeks of the year, according to nonprofit rating site Charity Navigator. Here are more statistics about charitable giving:

  1. The 2000 Social Capital Community Benchmark Survey shows that households with incomes below $20,000 gave 4.6% to charity.
  2. The other income levels with the most generous levels are $45-50K and $10M+.
  3. The largest contributor group is individuals and the average gift per household is $2,400 per year. On the extreme end, Warren Buffet pledged 85% of his entire $45+ billion fortune to the Bill & Melinda Gates Foundation.
  4. One in seven charitable transactions is a recurring payment; credit and debit make up 50% of recurring payments.
  5. 93% of all giving was “off line,” i.e., checks, cash, ACH, etc.

Here is some information you can share with your cardholders to help them make sound decisions about charitable giving:

  1. Before giving to any charity, ask yourself: What’s my realistic budget for charitable contributions? What really inspires me and how can I make the greatest impact?
  2. In order for the donor to receive a tax deduction for a donation, the charity must be a qualified 501(c)3 organization. The I.R.S. has a searchable database of charities where you can verify that the organization holds this status.
  3. The Better Business Bureau’s The BBB Wise Giving Alliance provides a national-level seal of approval with its Standards for Charity Accountability. There are 20 standards that a charity must satisfy. If some standards are not met, consumers will see that in the charity’s listing. In addition, the BBB states that a charitable organization should spend at least 65 percent of its money on program activities — that is, activities directly related to its cause.
  4. Charity Navigator and Guidestar are two online sources of information about the structure and performance of many nonprofit organizations.
  5. Never make a donation to a telephone solicitor. The solicitor might not even be legitimate. Telephone charity scams use names similar to those of well-known organizations, or they may say they are raising money for causes that tug at the heartstrings, such as supporting military families, veterans or police officers. In reality, your money will be used simply to profit the person calling.
  6. Email and social media scams and misinformation abound. Before clicking on a link or forwarding information, do some research at the sites listed above or www.snopes.com, a fact-checking and Internet reference source.
  7. Mailed donation requests may also be fraudulent; do your homework before giving.
  8. You can make a greater impact by making your donation part of a matching program. Does your employer make a matching donation? Is there another matching option, for example, during a telethon, on giving Tuesday or a donation drive?

Americans are the most generous donors in the world, and, on average, households in South Dakota and Minnesota generously gave 4.1 percent of discretionary income to charity. Help your cardholders make the most impact with their dollars.

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Cardholders Can Mitigate Fraud, too!

Fraudsters use a number of methods to obtain card information: phishing, vishing, skimming, and malware for example. They then use the information to make fraudulent transactions by creating counterfeit cards or making online purchases.

Although we can’t prevent compromises, the good news is Advantage Checkcards are covered by several layers of security to mitigate fraudulent transactions.

  • Continuous Fraud Monitoring (SecurLOCK) deters and detects suspicious activity.
  • The 3-Digit Security Code on the back of Checkcards provides Internet and phone security by verifying the cardholder is in possession of their Checkcard.
  • Verified by Visa is a free, simple-to-use service that confirms the cardholder identity with a personal password when making an online transaction. Learn more at visa.com/personal/security.
  • Chip Checkcards, used at a chip-enabled terminal, generate a onetime code for that transaction. This makes it nearly impossible for fraudsters to use stolen transaction data to create a counterfeit card.

In addition, Visa’s Zero Liability policy applies to all “Signature” or “Credit” purchases and PIN transactions that route through Visa so cardholders are protected in case of a lost card or fraudulent use.

Did you know that the most important fraud fighter is the cardholder? About 50% of fraud is found by the cardholder. Following is good information you can share with your cardholders to encourage them to become actively involved in mitigating Checkcard fraud.

  • If a Checkcard transaction is suspect, our fraud monitoring system attempts to contact the cardholder to verify the transaction. For this reason, it is important for your institution to have a current phone number (preferably a cell phone number) and email address on Cardbase. If the cardholder cannot be reached, the card may be blocked to prevent further transactions. Also, cardholders should notify the institution when traveling or before unusual spending.
  • Daily limits for purchases should be set at an appropriate amount for your spending habits. The daily limit can be temporarily raised for vacations, special purchases, etc. where a higher daily limit is needed.
  • Sign up for Transaction Alerts through your mobile banking or at Visa Purchase Alerts (whichever your institution offers).
  • Friendly fraud (the fraudster knows the victim – a relative or friend) accounts for about 10% of fraud.  Don’t leave confidential information out in the open.
  • Don’t give out personal private data over the Internet or phone unless you initiate the interaction with a trusted source.  Do not respond to emails, phone calls or text messages that ask for sensitive information.
  • Do not to give out card and PIN information. Do not write your PIN on your card or put it in your wallet.  Do not use a PIN that can be found in your wallet (birthdate, part of social security number, house number, etc.).
  • Social networking sites are becoming a hazard for information breach. Do not reveal any sensitive personal information on your Facebook, Twitter or other social networking site.
  • Do not respond to text messages, phone messages, emails or pop-up windows that offer a gift in exchange for providing card information. There are so many scams circulating, it’s hard to stay current; in general DO NOT respond to ANY requests for personal and/or financial information.
  • Do not provide your card information to any web site that is not a secure site. A secure website will have an “s” after the http: in the URL address bar and look for the padlock symbol.  Double click on the padlock and the SSL certificate will appear.
  • Install and regularly update anti-virus, anti-spyware software and keep computer systems updated.
  • Be aware of those around you…don’t let others overhear sensitive financial or personal information.
  • Shred documents with sensitive information prior to disposal.
  • Select more complex passwords for your online accounts.  Also avoid using the same password for all accounts.

 

Other resources to check out:

 

Federal Trade Commission (FTC) Identity Theft Hotline: 877-ID-THEFT

http://www.ftc.gov/bcp/edu/microsites/idtheft

 

Social Security Administration’s Fraud Hotline: 800.269.0271

http://www.ssa.gov/oig/

 

Credit bureau fraud hotlines

– Equifax: 800.525.6285

– Experian: 888.397.3742

– Trans Union: 800.680.7289

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Cash Flow and Expense Management for Small Businesses

Small businesses (fewer than 500 employees) account for 99.7% of all businesses in the US. About two-thirds of new businesses survive two years, half will survive five years, and one-third will survive 10. Poor cash management accounts for 82% of business failures and cash flow is a “continuing” problem for one in five small-business owners.

In regard to expense management, employees losing paper receipts is the top complaint from finance professionals. And, the IRS won’t just take your word for undocumented expenses.

There are many strategies small businesses can undertake to create and maintain optimal cash flow and manage expense reporting:

  • Keep accurate records regarding customers, sales, and inventory as a historical reference and as a guide in planning for the future.
  • Monitor cash flow. For a business to be successful, it must have sufficient cash to pay its expenses, make loan payments, pay taxes, and purchase new assets.
  • Track spending. It is estimated that most companies are wasting about 30% of their expenditures on items that do not have any impact upon their customers.
  • Segregate personal and business accounts. Having a separate bank account keeps records distinct and will make life easier come tax time. Partnerships, LLCs and corporations are legally required to have a separate bank account for business. Sole proprietors don’t legally need a separate account, but it’s a good idea nonetheless.
  • Set up automatic deposits and payments. Customer payments and other deposits can process immediately and recurring bills can be paid on a specific day, providing better control of cash flow.

Advantage can partner with your financial institution to provide solutions for your business accounts including business debit cards, Checkcard alerts, prepaid gift and incentive cards, and rewards programs.

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