Getting paid with a prepaid credit card.

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Proud Texan's picture
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I've been Googling all afternoon trying to find an answer to this one.   For those of you who take credit cards (online or in person),  do you know if there is anyway to discern if a credit card is a regular card or a "prepaid" card?

We require at least one-night's full payment as a deposit when a guest makes a reservation.   Whether the reservation is taken online or over the phone,  they are required to provide a valid credit card number with all the associated security information and have the card charged for the deposit before they are given a reservation confirmation.  At this point in the transaction there is no authorization for the full amount.

I went round and round with a recent guest who insisted on paying in cash.  The only problem with that is that we have no recourse if they're a no show or if any damages are incurred during their stay.   He finally provided me with his mother's credit card number.   Everything went O.K. (except a champagne flute is missing from our romance package stuff).   He indicated that when (and if) they come back,  he will use a prepaid credit card.

O.K., is it me or does this defeat the purpose of having a credit card number on file in the first place.   If their prepaid card is only good for the initial balance,  there is no fudge room for additional charges. This is the same as being paid in cash.

I would like to be able to identify and deny prepaid cards, but I can't see away around this one.

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These last few posts have reminded me of a commerical I have seen several times lately.  As with most commericials I only remember bits and pieces and do not recall the company, but the commercial is about a prepaid V/MC (not sure which) and the take is that a person can have their pay checks loaded on the card each week... no running to the bank to deposit, the money is there so you can spend more time with the family instead of the bank. 

If the card can be loaded through direct wire transfer from your employer, I am sure it also is registered with name, address etc. 

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The most anonymous of the cards in Canada is the Vanilla Mastercard available at corner stores and drug store. This card doesn't need to be registered at all. But on their website at www.vanillamastercard.com/faq.html it says:

"What billing address do I use for online and phone transactions?

Your personal information is not associated with the MasterCard® card therefore you should use your mailing address. This will ensure that if a problem arises you are able to be contacted by the merchant. If you are using the Card for online transactions, we recommend that you register your postal code with us, because a number of merchants use this as a security check before processing online orders."

So even the anonymous cards can pass muster, if you register the postal code.

 

 

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Eric Arthur Blair wrote:

The most anonymous of the cards in Canada is the Vanilla Mastercard available at corner stores and drug store. This card doesn't need to be registered at all. But on their website at www.vanillamastercard.com/faq.html it says:

"What billing address do I use for online and phone transactions?

Your personal information is not associated with the MasterCard® card therefore you should use your mailing address. This will ensure that if a problem arises you are able to be contacted by the merchant. If you are using the Card for online transactions, we recommend that you register your postal code with us, because a number of merchants use this as a security check before processing online orders."

So even the anonymous cards can pass muster, if you register the postal code. 

I have done this was Vanilla cards before. Called them, gave the info, was told I could use it online. Nope, it didn't work. I then called the merchant to try to buy the item over the phone. Nope, they wouldn't take the card. Had to use a credit card of mine and used the Vanilla in a restaurant.

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 Just to help clarify those o/s or neighboring countries. The prepaid visa/mc can be bought at any convenience store, or walmart check out, they are sold at the register, you can load them up and give as gifts, for example I sent that to my niece when she graduated university, in lieu of a check.  And you can reload them, so say your child is AT UNI and you want to make sure they have a credit card to use when required or emergencies.  You can reload them. 

They are not associated with the person, or the giver.

There are others out there that may be, these are just load em up and go credit cards, so people can use them online and other places that require a credit card.

I think the underlying issue for most innkeepers is that, if these folks have that bad of credit or no credit, we don't really want to take the chance on having them stay at our inn without collateral. To me, that is it in a nutshell.  And then there are those who use someone else's credit card to book the stay, Mommy's card, that is another can of worms. I have seen less of it this year than the last few... 

And another issue is when someone books a room via a gift certificate, do you require the guest who redeems it to provide a cc on file? Would a hotel? YOU BET THEY WOULD. Why don't we? We need to. 

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Joey Bloggs wrote:

And another issue is when someone books a room via a gift certificate, do you require the guest who redeems it to provide a cc on file? Would a hotel? YOU BET THEY WOULD. Why don't we? We need to. 

 We now use Reservation Key for our Gift Certificates.   Recipients are required to make their reservation online using a code that's spit out when the giver purchases the Gift Certificate.   The certificate is only good for the exact dollar amount for which it was purchased.  The recipients are required to enter a valid credit card to use the gift certificate and make a reservation.   If the gift certificate is for the full amount,  then their credit card is not charged, but we have captured their card information for that transaction.

 

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Proud Texan wrote:

Joey Bloggs wrote:

And another issue is when someone books a room via a gift certificate, do you require the guest who redeems it to provide a cc on file? Would a hotel? YOU BET THEY WOULD. Why don't we? We need to. 

 We now use Reservation Key for our Gift Certificates.   Recipients are required to make their reservation online using a code that's spit out when the giver purchases the Gift Certificate.   The certificate is only good for the exact dollar amount for which it was purchased.  The recipients are required to enter a valid credit card to use the gift certificate and make a reservation.   If the gift certificate is for the full amount,  then their credit card is not charged, but we have captured their card information for that transaction.

Just to clarify this statement a little...they can use less than the certificate is valued, but not more. If they have a $200 certificate, and they use $150 for a reservation, then they still have a $50 balance on their certificate.

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Breakfast Diva wrote:

Proud Texan wrote:

Joey Bloggs wrote:

And another issue is when someone books a room via a gift certificate, do you require the guest who redeems it to provide a cc on file? Would a hotel? YOU BET THEY WOULD. Why don't we? We need to. 

 We now use Reservation Key for our Gift Certificates.   Recipients are required to make their reservation online using a code that's spit out when the giver purchases the Gift Certificate.   The certificate is only good for the exact dollar amount for which it was purchased.  The recipients are required to enter a valid credit card to use the gift certificate and make a reservation.   If the gift certificate is for the full amount,  then their credit card is not charged, but we have captured their card information for that transaction.

Just to clarify this statement a little...they can use less than the certificate is valued, but not more. If they have a $200 certificate, and they use $150 for a reservation, then they still have a $50 balance on their certificate.

You might be right. I have never had anyone use less than the certificate amount. Mine have a 6 month expiration date, so they would have to use the balance within that time frame or they would lose the balance anyway.

 

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Joey Bloggs wrote:

I think the underlying issue for most innkeepers is that, if these folks have that bad of credit or no credit, we don't really want to take the chance on having them stay at our inn without collateral. To me, that is it in a nutshell.  And then there are those who use someone else's credit card to book the stay, Mommy's card, that is another can of worms. I have seen less of it this year than the last few... 

I agree JB, I want to have the security of having a CC on file.  But in reality, does it really provide such?  How many times have we seen on here where there has been some sort of problem with a card... either the card has expired or declined.   So unless we plan to take 100% of the money up front, we are all running on the gamble that there will be enough money available when the time comes to run the card.  The ODDS are better than no number though, that is for sure! 

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copperhead wrote:

Joey Bloggs wrote:

I think the underlying issue for most innkeepers is that, if these folks have that bad of credit or no credit, we don't really want to take the chance on having them stay at our inn without collateral. To me, that is it in a nutshell.  And then there are those who use someone else's credit card to book the stay, Mommy's card, that is another can of worms. I have seen less of it this year than the last few... 

I agree JB, I want to have the security of having a CC on file.  But in reality, does it really provide such?  How many times have we seen on here where there has been some sort of problem with a card... either the card has expired or declined.   So unless we plan to take 100% of the money up front, we are all running on the gamble that there will be enough money available when the time comes to run the card.  The ODDS are better than no number though, that is for sure! 

 If they have an unpaid balance and the credit card does not go through,  they have the option to pay by other means or be charged with "defrauding an innkeeper" or "theft of services",  which I believe (depending on your state) is a felony.

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Every reservation requires a cc # to be guaranteed. Since I do not charge until arrival, it is not an issue unless it is a no show and then it is charged (I did not see or get the GC).

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We have those, but even the ones that you buy at the drug store allow you to register your name, address, phone number with the card. They are intended to use for online purchases, therefore they need your address associated with them. Take a look at www.iridiumcard.ca/Home.aspx for example and you will see that it says "Register your card". Same with Vancity at www.mybalance.ca/ and the one from the post office www.canadapost.ca/cpo/mc/personal/productsservices/visagiftcard.jsf wher they even say....

 

  1. Buy your card at any participating Canada Post location. Load up to $500 on it. Start using your temporary card immediately.
  2. Receive your permanent card in the mail. Activate it and the funds from your temporary card are transferred automatically to your new card.
  3. Use your card anywhere Visa is accepted.

In some countries, like Italy and France they need to be registered. It's intended to keep the bad guys from using them. There are daily limits, weekly limits, monthly limits and lifetime limits to keep the cards from being abused for money laundering.

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We require a credit card when guests are making a reservation with a gift certificate. CYA

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I think you can also get the kind of card Eric is talking about where you get it at your bank or CU and you reload it as needed. This kind allows the holder to build a credit history where the store ones don't.

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 I hear the VA B & B association is now going to some kind of gift card rather than using the paper gift certificates. Will be interesting to see what this is all about.

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We use Authorize.net in conjunction with Reservation Key.    Their customer support is closed on Sunday, but I did find some information.   Apparently, on pre-paid cards there is no address associated with the card,  so if they try to run a reservation, they will get an AVS mismatch because there is no zipcode present and the card will be declined.  I can apparently opt out of this feature, but why would I.

I'm going to call them tomorrow and verify that this is the case.  If so,  I'm good to go.

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Proud Texan wrote:

We use Authorize.net in conjunction with Reservation Key.    Their customer support is closed on Sunday, but I did find some information.   Apparently, on pre-paid cards there is no address associated with the card,  so if they try to run a reservation, they will get an AVS mismatch because there is no zipcode present and the card will be declined.  I can apparently opt out of this feature, but why would I.

I'm going to call them tomorrow and verify that this is the case.  If so,  I'm good to go.

  I can only speak for Authorize.net,  but a valid transaction requires a zip code to be associated with the card in order for the card to process.  If there is none,  then there will be an AVS mismatch and the card will be declined.   Even if the customer provides their address with a zip code to you,  that zip code will not be associated with the card.  So,  if you take an over-the-phone reservation,  the card will be declined up front if you are using the Authorize.net virtual terminal.

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I know that the ones from some of the banks here require that your register the card. So they do have address on file. BMO certainly makes you fill out a whole application for their prepaid card. And the one from the post office definitely sends you a card in the mail after you register it. And as I said, the prepaid card that I have in Euro has my address associated with it, because they actually send me snail mail.

Of course, we don't have ZIP codes, only postal codes. But I would imagine that they would match.

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I'm not sure that is true with all cards, at least here. All the reloadable cards around here now give you a temporary card, require you to register, send you a personalized card and would therefore have an address associated with it.

I have one, from France. I get mail from the company. My address must be associated with the card. And my own bank sells them for travel. You have to register with your personal data to get the card issued.

What may not have the address associated is the cards that you buy at the drug store, like Green Dot. I just don't know if they can or can't be registered. And I'm not paying the $6.95 to find out Smiling

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Our daughter sends us these VS cards - the ones she sends in various amounts are called Vanilla Cards. I do not know if I entered something incorrectly, but tried to use one on Am az on once and it would not take it. Have not tried since. It has been taken at any retail store or restaurant we gave it to. After the purchase, we get a receipt telling us how much is left on the card.

She must be paying the register fee for it because when we get them they are ready to go. She sent one for our anniversary for us to go to Jo e's Cr ab  Sh ack with the instruction I was to order a drink and a dessert! She expected it to take the whole amount based on what it costs when she & her boyfriend go. We had that meal plus 2 visits to Olive Garden!

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gillumhouse wrote:

Our daughter sends us these VS cards - the ones she sends in various amounts are called Vanilla Cards. I do not know if I entered something incorrectly, but tried to use one on Am az on once and it would not take it. Have not tried since. It has been taken at any retail store or restaurant we gave it to. After the purchase, we get a receipt telling us how much is left on the card.

She must be paying the register fee for it because when we get them they are ready to go. She sent one for our anniversary for us to go to Jo e's Cr ab  Sh ack with the instruction I was to order a drink and a dessert! She expected it to take the whole amount based on what it costs when she & her boyfriend go. We had that meal plus 2 visits to Olive Garden!

Our relatives send us Vanilla cards also. I have not been able to use them from online retailers, but have no problem in a store or restaurant.

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We did a package one year where I bought those cards for the guests to use. (Note to self- don't ever do this again!) As far as I could see there were no requirements for registering the card. I could have used it in the store I bought it in right after paying for it.

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Proud Texan wrote:

I'm going to call them tomorrow and verify that this is the case.  If so,  I'm good to go.

Please report here what you find out.

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Proud Texan wrote:

We use Authorize.net in conjunction with Reservation Key.    Their customer support is closed on Sunday, but I did find some information.   Apparently, on pre-paid cards there is no address associated with the card,  so if they try to run a reservation, they will get an AVS mismatch because there is no zipcode present and the card will be declined.  I can apparently opt out of this feature, but why would I.

I'm going to call them tomorrow and verify that this is the case.  If so,  I'm good to go.

Ah ha!

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Well PT as you know you are only allowed to use the card/charge the card for room rentals, anyway. So it is doesn't matter if they have more than enough in an account to cover damages, you can't charge it anyway.

You cannot descriminate against debit cards, as they say they are accepted as visa/mc.

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Some guests tell us what kind of card they are using. Of course, that doesn't help if they book online.

Maybe you should charge the full amount in advance. That at least covers the no shows. Damages, as you know, cannot be collected just by running the card after the fact. The issuer will give the money back to the guest without even contacting you if the guest disputes the charges. You have to have the guest's sig for the actual charges and not just their sig on another form saying they understand they have to pay for damages.

 

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Madeleine wrote:

Some guests tell us what kind of card they are using. Of course, that doesn't help if they book online.

Maybe you should charge the full amount in advance. That at least covers the no shows. Damages, as you know, cannot be collected just by running the card after the fact. The issuer will give the money back to the guest without even contacting you if the guest disputes the charges. You have to have the guest's sig for the actual charges and not just their sig on another form saying they understand they have to pay for damages.

  If that's true,  then all of us are screwed.   How does one collect for damages then?

 I've never heard of anyone taking a damage deposit on top of the room deposit.  I would certainly look elsewhere if the were the case.

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You can take a "hold" but be aware that a hold on debit cards actually claims the money until you pass the transaction. And they can't use the money at all. It can take up to 10 days to clear from what I have been told.

Transactions that are not card-in-hand are going to get more and more difficult. That is where all the crime is, now that most of us have EMV (chip and pin) cards. I've seen B&Bs in France demand to be paid in advance via PayPal with an extra fee to cover their side of the Paypal fees as well. To be honest, we have had three "fraud" transactions, all with card not in hand. That's why I hate transactions where I don't have the physical card.

And here, all MC/Visa transactions are considered CC transactions. MC/Visa are not allowed in the debit card business around here.

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Proud Texan wrote:

If that's true,  then all of us are screwed.

It's true, and all of us are screwed. Big hotels are in the same boat we are. We've discussed it here fairly recently in detail. You were probably, heaven forbid, WORKING when we went through it.

For damages, your options are:

  1. Charge their card and hope they don't question it, because if they do the CC company will side with the guest and tell you to take it to small claims court.
  2. Send them a bill and hope they're honest enough to pay it.
  3. Take them to court.

Yes, screwed. Lucky the problem doesn't come up often. Most people pay when asked.

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Remember to start the letter to them with "Without Prejudice" and even if you win, collecting is something else. Luckily around here, if you can collect, they pay every single penny, from the cost of the registered letter to the cost of the bailiff that shows up to their house to collect a cheque, everything! If you can show a receipt for the paper and envelope, you get that paid as well. Even the cost of public transport to show up to the courthouse.

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Proud Texan wrote:

Madeleine wrote:

Some guests tell us what kind of card they are using. Of course, that doesn't help if they book online.

Maybe you should charge the full amount in advance. That at least covers the no shows. Damages, as you know, cannot be collected just by running the card after the fact. The issuer will give the money back to the guest without even contacting you if the guest disputes the charges. You have to have the guest's sig for the actual charges and not just their sig on another form saying they understand they have to pay for damages.

  If that's true,  then all of us are screwed.   How does one collect for damages then?

 I've never heard of anyone taking a damage deposit on top of the room deposit.  I would certainly look elsewhere if the were the case.

We have collected for damages by telling the guest the item was damaged, this is the replacement cost, how will you be paying for that?

Other than a few broken glasses, some damaged quilts and a broken window blind we haven't had much in the way of damage. Well, there were the TWO nights a couple of weeks ago when TWO guests in a row damaged the dresser with some sort of soda cans. (That took me 30 minutes to repair.)

The only thing we've ever asked the guest to pay for was a mattress. It was beyond negligence on the part of the guest and other members of the family backed us up.

Even the woman who spilled grape soda all over the room wasn't charged for new carpet. I really wanted to charge her, tho, let me tell you. Her whole attitide was one of 'so what, it's just carpet, hire someone to clean it.' Ah, yes, the old 'hire someone' attitude. Save me.

 

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I'm not sure, but I think you can tell your merchant services that you won't take pre-paid cards. Each year I have relatives give me a pre-paid card and there are a lot of merchants online that will reject my payment on these cards. There must be a way to flag these numbers to deny payment.

If someone did want to use a pre-payed card and you knew about it, I would make the entire reservation paid in advance and also hold a deposit of $50-$100 for damage deposit.

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How is a prepaid card different from a debit card MC/Visa? 

You could try going through http://en.wikipedia.org/wiki/List_of_Issuer_Identification_Numbers and looking for the prepaid cards. But if you ask me, it's fruitless. MC/Visa debit cards are no different from a prepaid card, they only work if money is available. 

Maybe this is why Visa/MC debit isn't legal here?

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Eric Arthur Blair wrote:

How is a prepaid card different from a debit card MC/Visa? 

You could try going through http://en.wikipedia.org/wiki/List_of_Issuer_Identification_Numbers and looking for the prepaid cards. But if you ask me, it's fruitless. MC/Visa debit cards are no different from a prepaid card, they only work if money is available. 

Maybe this is why Visa/MC debit isn't legal here?

Good point.   Maybe we should stop taking Debit Cards too.   Actually,   I think if a merchant adds charges to a debit card, and there are insufficient funds to cover the charge, that the charge is held until money has been deposited to cover it.   I may be wrong.

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Proud Texan wrote:

Eric Arthur Blair wrote:

How is a prepaid card different from a debit card MC/Visa? 

You could try going through http://en.wikipedia.org/wiki/List_of_Issuer_Identification_Numbers and looking for the prepaid cards. But if you ask me, it's fruitless. MC/Visa debit cards are no different from a prepaid card, they only work if money is available. 

Maybe this is why Visa/MC debit isn't legal here?

Good point.   Maybe we should stop taking Debit Cards too.   Actually,   I think if a merchant adds charges to a debit card, and there are insufficient funds to cover the charge, that the charge is held until money has been deposited to cover it.   I may be wrong.

I believe you are wrong on this one.  You will get a 'denied' on the screen if there are not enough funds to cover the charge.  That is unless the customer has overdraft protection, then the card would go through and you would have no knowledge of the overdraft. 

As others have said, you can't charge their card for damages, you have to deal with that through sending them a statement and request payment.  No payement, small claims court. 

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 Good question PT.

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