Taking Credit Card deposits

[art200380]

Hello

Sorry if this is in the wrong place!

I own and run an equipment hire company.

We currently only accept customer payments through Paypal but are getting to the point where we need to look at our bank account options.

In addition (and more importantly) we require the ability to take deposits from customer credit cards which will be refunded when the customer returns our equipment at the end of the hire period.

Can anyone point us in the right direction? Any suggestions of how we can take deposits from credit cards and then refund a few days later? What are the cost implications for us?

Thanks in advance.

 

[Sparx]

You want to look into 'pre-authorisation' have a look at it. It's made for exactly your type of industry (hire companies, hotels, etc)..

 

[arcon5]

What is your typical length of hire?

 

[LMDServicesUK]

Hi Art200380

Preauthorisation is a way of "ring fencing" funds on a card holders account for a period of time, you set the duration of the time as you require. Once you have got your equipment back you can "release" the funds back to the card holder.

However you will need a conventional Merchant account to do this, I presume that you are selling Face 2 Face so you would need a terminal configured to provide this facility for you.

If you want more information or an outline quote for an account and terminal please PM me.

Rgds

Mark

 

[oldoakey]

If you got a standard credit card facility you could take the rental payment and then a separate deposit from their card and then a few days later do a refund of the deposit only. This then should provide a no cost option, apart from the terminal rental and set up fee. I would check this out with the merchant provider before you sign up though.

But with this facility in house you can then take cards as payment for your rentals either face to face or over the phone which would be a lot cheaper than Paypal fees of 3% this should mostly negate the costs for the terminal rental.

 

[LMDServicesUK]

You are aware that the Merchant is charged for processing of the initial deposit and also the subsequent refund, where with pre authorisation there are no charges for this service.

Just a clarification

Mark

 

[arcon5]

Last merchant account I had there was no charge for a refund and the original fees was refunded!

 

[LMDServicesUK]

Last merchant account I had there was no charge for a refund and the original fees was refunded!

Let me clarify what I said.

The charges the Merchant would have paid against the original deposit payment would be refunded, but ALL Merchant Account Providers now charge a refund fee to the Merchant.

So whilst yes the deposit payment acquiring fee is refunded, the Merchant is then charged a fee for processing the refund, the actual amount will be dependent on the Merchant Provider.

This is now always the case for anyone opening a Merchant Account, and if you are still operating a Merchant account and you are not being charged a refund admin fee for any refund transactions you might have to do, don't change providers !

Rgds

Mark