Turn Payment Processing Problems Into Profit

As a VAR or integrator, it's your job to find a potential customer with a need, propose your solution, and earn the opportunity to make their problem go away. But what if one of your current customers has a problem with the original installation? Do you have the ability to diagnose the problem, resolve it, and gain additional business from that client? AutoClerk (Lafayette, CA) faced this scenario and took the proper steps to not only resolve the problem but also earn future sales from it.

VAR's Track Record Eliminates Technology Angst
In November 2000, AutoClerk, a hotel management software developer and integrator, installed its AutoClerk software at an upscale boutique hotel in Sausalito, CA. The system ran on a Windows 2000 network interfaced to a credit card processor and accounting department. In September 2002, the hotel approached AutoClerk at the Western Lodging show about switching payment processing vendors. "The problem they were having was with charge backs," says Ed Bear, VP of AutoClerk. The hotel was losing hundreds of dollars a month from customer refunds due to customer disputes or no-shows. Also, many of these charge backs were for guests who had already stayed at the hotel, costing the hotel money, time, and resources.

The hotel needed a payment processing vendor that would help eliminate these charge backs by doing more research on the cardholders' complaints before issuing refunds. However, they did have some concerns in switching providers. "Of course, one concern was cost. The hotel would endure a cost from the processor side and from our side for labor. Their second concern was improvement. They did not want to endure the cost if the new processing company was not going to resolve the charge back issues," notes Bear. To overcome these obstacles, AutoClerk presented the hotel with statistics and information on credit card payment processors based on other customers' experiences. In the area of charge backs, the hotel found Heartland Payment Systems (Princeton, NJ) to consistently resolve this particular problem.

Unexpected Integration Perplexity
When AutoClerk went in to switch over credit card processors at the hotel, it faced a problem it had never dealt with before. When interfacing with the credit card processor, the integrator requires information such as merchant numbers and authorization numbers. Authorization codes permit the hotel to put a hold on the estimated amount of money customers will spend during their stay. In the hotel industry, this is important because when guests check in there is no way of telling how much they will spend in the restaurant or gift shop before they leave. So, the hotel puts a hold on customers' credit cards of the estimated amounts. "Heartland gave us a form with the information we needed about the numbers and codes the system required to process the transactions properly. We configured it into a file, set it up on our bench, and remotely installed it into our computer system. At that point the authorization codes from the previous processor were not compatible with Heartland's system - this was a big problem," explains Bear. Without the valid codes, the hotel was unable to put a hold on current customers' cards.

To solve the problem, AutoClerk needed to use Heartland to gain authorization for the hotel's current customers by using their computer system to reauthorize those codes. "It was challenging because it caught us off guard. It also slowed down the integration process. The job took one day when it should have have taken several hours less," says Bear. Despite the challenge, the hotel did get back online, and since the install, they have received zero charge backs.

As a result of the successful follow-up installation, the hotel has brought AutoClerk in to upgrade its current software to include Web-based reservations. This self-managed application will allow the hotel to track how many rooms are available by adding up online and offline sales. Also, since this installation, AutoClerk has run into similar authorization code challenges and has been able to overcome them. AutoClerk now works ahead. When switching a customer's payment processing vendor, Autoclerk obtains and prints the authorization codes needed to make the transition before the switch over. By doing this, AutoClerk is able to cut hours off integration time.