Taking credit card details as a security bond

[Donshon]

Hello,

I would like to know if it's okay legally to take a customers credit/debit card details along with the security number (on the back of the card) as a security bond against a hired item?

For example:

• A customer hires an electric generator for a week.
• The customer's credit/debit card details are taken and stored on file.
• The customer returns the generator a week later and it is still in perfect order.
• The customer's details are removed from file storage and destroyed.

Or...

• A customer hires an electric generator for a week.
• The customer's credit/debit card details are taken and stored on file.
• The customer returns the generator a week later and it is damaged enough to breach the hire terms and conditions.
• The customer's details are used to charge for the damages done.
• The customer's details are then removed from file storage and destroyed.

Is this an okay system?

Any advice on this would be appreciated.

Best Regards,

Donshon

 

[TheConsulter]

When you look at the market for hiring tools for example, they want you to pay a deposit in advance. It's then refundable once the product is returned in good condition. Have you thought about this type of system?

 

[Scott-Copywriter]

I'm not sure of the broad legalities, but at the very least, I imagine that you would have to stipulate specific charges in the terms and conditions.

I'd be surprised if you could take the card details and give yourself a blank cheque to charge whatever you deem appropriate for the damage.

 

[POI investigations]

Hi you are best to take a deposit by card, rather then holding the card details. You will need to put something in your terms and conditions to try and protect yourself from charge backs

 

[Nochexman]

Is this an okay system?

Broadly speaking the answer is 'no'.

If you 'take ' the customer's card details you need to come under PCI regulations, and it is hard to image that you could store the card details in such a way that was compliant.

As others have suggested, look for a different solution.

 

[NRLtd]

How do hotels do this...? It's pretty standard to take a swipe when you check in in case you raid the mini bar!

 

[Supercoach]

It's the system that car hire companies use but I would imagine they have a cast-iron agreement with the card companies.

 

[DontAsk]

Hotels do it all the time.

There's also a system for pre-authorisation that will reduce the remaining credit limit, even though nothing has been paid anything yet.

Talk to your card payment system provider.

 

[Newchodge]

Hoiw do you know that the card account has sufficient available funds to meet your charge?

 

[DontAsk]

Hoiw do you know that the card account has sufficient available funds to meet your charge?

That's what pre-authorisation does.

 

[Newchodge]

That's what pre-authorisation does.

But the Op is not talking about pre-authorisation. He is talking about manually recording the details of the card and security code! and using it if needed. He also does not know what value he would put on the charge until at the end of the contract, so what amount could he pre-authorise?

 

[DontAsk]

That's why I told him to talk to his credit card payment system provider. They will give the best advice as to what he can and cannot do.

 

[Donshon]

Hi, thank you for all your replies and help so far.

I've talked to the band and card payments provider people. They have both advised that we should take a deposit against the hired goods, then refund once the goods have been returned safely.

They also told me that it's only Car Hire, and Hotels that can use pre-authorisation and that it's something that is going to be phased out as it causes a lot of problems with customers.

Not sure how true this statement from the bank/card people is, but there you go. I thought I would share.

Again, thanks for the help

 

[Nochexman]

They also told me that it's only Car Hire, and Hotels that can use pre-authorisation and that it's something that is going to be phased out as it causes a lot of problems with customers.

Not sure how true this statement from the bank/card people is, but there you go. I thought I would share.

Thank you for closing the loop, Donshon, that is interesting. I'd take what the bank told you about pre-auths with a very large pinch of salt!