Accepting credit and debit card payments is an excellent way to improve cash flow and provide convenience to your clients. To protect your business from payment disputes (chargebacks), follow these essential best practices for documentation and authorization.
Key Prevention Strategies
Secure Explicit Authorization: Always obtain authorization for the specific dollar amount being charged. This should be a physical or electronic signature.
Verify Cardholder Identity: Confirm the name on the card matches your client. If a different person is paying, obtain additional approval from that specific cardholder.
Maintain Records for Remote Payments: For phone or website transactions, ensure you have a signed charge authorization or a prior payment agreement on file.
Document Third-Party Payments: If a relative or third party is paying a client’s bill:
Use a formal agreement or authorization form.
Include the client name and invoice number.
Ensure the third party signs to acknowledge responsibility for the payment.
Highlight Cancellation Policies: Have clients initial next to any specific cancellation or refund policies within your standard agreements.