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Bank Card Law The Importance of Merchant Education
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Tony
Ogden “If
you think education is expensive, try ignorance!” I The
irony of ignorance-based loss is that preventive information is quite
accessible, yet rarely used. For example, both MasterCard and Visa publish
merchant education materials at relatively little or no cost and make
these materials available to acquiring banks. American Express and
Discover even make merchant education information readily available online
at www.americanexpress.com and www.novus net.com/merchant, respectively.
Merchant education materials cover such topics as: how to process
different types of card transactions, achieving profitability, product
offerings, and the ever-timely fraud and chargeback reduction. Some
merchant education materials cover what may be termed “Merchant Best
Practices,” an indispensable area in which all merchants should be
intimately versed and familiar. Surprisingly,
BCL has yet to hear one merchant say that their acquiring bank, ISO, or
sales agent provided them with any of the above mentioned educational and
training materials. From this merchant feedback, BCL opines that all
entities within the acquiring bank card industry are experiencing a
significant level of unnecessary loss. This becomes even more magnified
when you consider that chargebacks alone cost merchants and the entire
bank card industry millions of dollars each year. Conversely, some of the
merchant publications dealing with fraud and chargeback prevention are
either free or cost as little as 75 cents each. What
can you do to inexpensively educate merchants and reap the return from
loss prevention and account retention? It
would be overly simplistic to say that dissemination of educational
materials, alone, would solve all types of merchant loss. However, it is
reasonable to say that providing merchant educational materials is a very
important and simple first step in preventing unnecessary loss. It is an
action which yields benefits that grossly outweigh the cost. To make use
of the available merchant educational materials, every acquiring bank
should contact Visa and MasterCard, procure the relevant materials, and
make them available to their merchants directly or through their ISO/MSP
and Sale Agents. ISO/MSPs and sale agents can request that their
sponsoring member banks procure the merchant education materials for
distribution. In
the extremely competitive bank card acquiring industry, the practice of
educating merchants has the secondary benefit of giving the merchant
additional customer service. You can distinguish your institution from
others who do not similarly educate their merchants. You can also use the
educational materials as a platform or an adjunct to your own merchant
education program. In
conclusion, consider that no acquiring bank, ISO/MSP, sales agent or
merchant likes to lose the valuable income derived from a productive
merchant account. It is therefore imperative to use the readily available,
low-cost merchant education materials to help stamp-out ignorance.
Remember that ignorance leads to unnecessary loss, and that “a merchant
account is terrible thing to waste.” Please
Note: The above article is authored for general informational and
educational purposes and is not to be construed as legal advice, nor
relied upon as legal advice from Bank Card Law or its attorneys.
Individual facts, circumstances, and applicable law may vary. Therefore,
you are strongly encouraged to seek the advice of a qualified attorney
regarding your particular matter. Tony Ogden and Tony Osei of Bank Card Law provide legal and consulting services designed to facilitate merchant bankcard processing. The best way to obtain more information about Bank Card Law is to visit www.bankcardlaw.com. You can also call (310) 278-2708.
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