By Biff Matthews
CardWare International
Companies that invest in employee training benefit from higher productivity, less downtime, lower turnover, less need for supervision and reduced reliance on others. They also gain a more satisfied workforce and a decisive competitive advantage.
I strongly advocate for merchant training for precisely the same reasons. And from the ISO or merchant level salesperson (MLS) perspective, training confers other important benefits, too. It maximizes and locks in the revenue stream: the more transactions, the higher the revenue.
Good training also thwarts chargebacks and other transaction anomalies at the retail site. Given that a percent of total transaction revenue is your income stream, chargebacks can quickly erode profits, making you (and the merchant) poorer.
Good training is also an easy path to higher merchant retention and satisfaction. This brings in my final point: it sets you apart from the competition, who likely are providing little or no training for their merchants.
Training should be comprehensive and start with the assumption that the merchant knows nothing. Forget previous equipment, systems and software the merchant has used. For best results, all aspects of the operation must be re-emphasized - and all key elements covered.
Anyone can run an ordinary sale with little or no training. But what happens during an emergency or when things do not go according to plan? That is the focus of training. The goal is the protection and security of every transaction so there is no opportunity for chargebacks, disputes or mischief.
Training should start with an overall statement of the training's specific benefits for merchants. Emphasize sharing of information with staff and future employees. By this I mean not just the easy sale and credit procedures, but where to find assistance when circumstances are out of the ordinary.
In all cases, the first line of defense in protecting the transaction is the quick reference guide (QRG). It should be kept close by, and everyone should be trained - and tested - on how to use it. The last line of defense should be the help desk.
Checklists are invaluable, and training is one place where they are mandatory. To start the training process, use a checklist that covers all aspects.
Discuss fraud in its various forms and the measures in place for fraud prevention, such as examining the card, making sure it's signed, knowing what to do if there is any question about the presenter or transaction.
Furthermore, communicate to merchants that substantial rewards are available for the capture of stolen cards (or cards severely over credit limits). And, since security is everything, make sure they know that if a card doesn't read when swiped, the keyed-in transaction should be accompanied with an imprint to document presentation.
A plethora of atypical transactions go beyond the normal sale, including credits and returns, voids and split payments (two cards for a large purchase). Also, gift and debit card transactions fall into this category.
All merchants encounter these transactions, and all procedures need to be understood and followed. Training should cover the merits of an address verification service (AVS); if there's no match, merchants can use an AVS to verify cardholder identity and evaluate any plausible explanations for discrepancies.
The AVS acts as a guarantee that is not actually a guarantee, but it validates a good transaction. A "no match" gives merchants the choice of whether to go forward with the transaction. Merchants selling high-ticket items and goods that are easily fenced should always be wary of a "no match" on the AVS. (They should be equally wary of international sales, but that is for another article.)
Voids and credits should be handled as carefully as sales because an improperly handled credit can also create a dispute and offset your revenue. With terminals performing multiple applications, and with debit transactions growing as a percent of the total, PIN pad and split tender transactions are also part of what merchants need to master.
In addition, unemployment and other government benefits are now rendered with prepaid cards. Food stamps and the Special Supplemental Nutrition Program for Women, Infants and Children (known as WIC, which allows only certain kinds of products to be purchased) are also in widespread use.
One in eight Americans now receive food stamps, according to Reuters (Dec. 20, 2009). This is more than $4.6 billion in circulation per month. About 6 million Americans receiving food stamps report they have no other source of assistance, according to The New York Times. Clearly, food stamps delivered on reloadable prepaid cards are common currency, and merchants must understand their requirements.
Also in circulation are purchasing cards, where the individual presenting the card may be authorized only to buy office supplies, and transactions on nonspecified goods may not be approved. Here again, care in the application of the QRG is invaluable.
Once a merchant believes he or she has a handle on everything discussed above, the merchant is inevitably presented with a closed-loop reward card. Here, the consumer receives a percentage discount for buying specific merchandise or from a specific merchant.
Nothing demonstrates how important it is to fully train managers and line staff more than the explosion of transaction types and the accompanying pitfalls. Worse yet, criminal networks of every stripe are determined to identify and penetrate merchant vulnerabilities. They can, and will multiply the problem before you can address it. So prevention is essential.
The retail clerk must also be knowledgeable about check guarantee and check imaging. Few things are worse for the consumer than a clerk unable to quickly handle a transaction; delays in the shopping experience cost sales.
Training can be a powerful competitive advantage. Done well, it ensures the revenue stream and merchant satisfaction, because customers have a good experience with every transaction.
But back to training. Like a cash register, the POS system needs to be balanced nightly or at shift change. The reasons for this are numerous. Primarily they involve user error: the clerk fails to follow procedures learned during training. There can also be system or processor communications issues.
Any irregularity in the chain of communication can prevent successful acknowledgement on the back-end. Big things like lightning strikes and small disturbances like line static (virtually anything to do with power) can be at fault.
Some processors "force-balance" in the evening; some "auto-settle." In these cases, the terminals end with what they have, and the processor looks for any discrepancies, such as an authorization without a capture.
As you move through the training process with merchants, you'll reach the point of needing to know whom to call if certain things occur. There are just a few phone numbers merchants need regarding electronic transactions:
The difficulty is that for authorization and help desk, there can be one number for MasterCard Worldwide, Visa Inc. and Discover Financial Services, another for American Express Co., a third for gift cards, a fourth for checks, and a fifth for electronic benefits transfer.
It is important to have a comprehensive, universal authorization and support list that includes all relevant phone numbers on a single reference card.
The one remaining number, the one you'll have to supply, is your phone number, or that of someone from your organization. This is about service and business retention, after all. And that requires protecting the integrity of transactions 24 hours a day, endeavoring to ensure there are no issues, but if there are issues, that people and tools are readily available to solve them.
Another aspect of training is the POS system. In most stores, this is a computer-controlled cash drawer, so the computer is fully integrated with attendance and inventory, accounts payable and receivable, and a cash system. For lodging applications, it does even more.
Its successor, the personal computer POS (PC POS) system, presents an entirely new set of training parameters. Most PC POSs are tied to card-based transactions, but there are also cash sales that lead to multiple tender transactions. This is why your checklist is so critical.
If you are considering outsourcing training, find a company that can train on multiple platforms and applications. Ask to see the company's checklists, and make your own additions and corrections. The training checklist, or script, should be modular so what is learned is truly reflective of the merchant's situation.
You also want the ability to monitor the training culture, so you might arrange randomly recorded training calls. But whether you outsource or do your own installs and training, you need a training checklist merchants can sign off on, confirming that you - or your provider - covered all items.
Finally, conduct follow-up training within a few days to see if anything is unclear, has been overlooked or has arisen through use. As a value-added service designed to increase merchant efficiency, training can help you and your merchants gain a powerful competitive advantage.
Biff Matthews is President of Thirteen Inc., the parent company of CardWare International, based in Heath, Ohio. He is one of 12 founding members of the Electronic Transactions Association, serving on its board, advisory board and committees. Call him at 740-522-2150, or e-mail him at biff@13-inc.com.
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