Some consumers read everything they can get their hands on, including receipts, bills, and contracts. Others shy away from doing so, believing there is no benefit in it. But those in the second camp may want to re-think their approach, because there are several advantages to reading the fine print (and, in the case of agreements, before signing on the dotted line), along with some disadvantages to avoiding this step.
It’s also a good idea for merchants to understand these benefits and drawbacks, and to share them with their customers. This especially important given that consumers’ failure to really read receipts, bills and contracts can have repercussions for businesses.
Why Consumers Should Read Recurring Payment Agreements
There’s no question that recurring payments for goods and services are a convenient option for consumers. However, this doesn’t mean they should merely “set it and forget it.”
Agreements that cover recurring payments contain critical information, such as the effective date of the payment agreement, the amount of the recurring payment, and the day of the month that the payment is due and will be withdrawn from the linked bank account (or charged to the linked credit card). There may also be information on fees for making recurring payments, as well as information on how to cancel an individual recurring payment and/or recurring payment agreement.
With this information in hand, consumers can ensure that they have the necessary funds in their bank account in time to cover a scheduled payment, saving them from insufficient funds fees and ensuring that merchants receive the funds due to them. Consumers won’t initiate unnecessary chargebacks because they don’t recognize the amount of a recurring payment charged by merchants or don’t realize that fees may have been added to the payment amount.
Customers will also know the procedure for canceling a recurring payment or payment agreement, making things easier for themselves and again limiting merchants’ potential for chargebacks. Fewer headaches for merchants—like repeated phone calls from consumers about how to stop recurring payments—will ensue, too.
Why Consumers Should Read Credit Card Bills
Credit card bills contain information whose nature is so critical that card issuers are required to include it. Such information includes, but is not limited to, late payment warnings with a breakout of late fees and minimum payment warnings with a breakout of the interest that will be paid if the cardholder makes only minimum payments over a certain period of time. It is important for consumers to understand the financial obligations they will incur based on their payment habits.
Consumers should also scrutinize credit card bills (and bank statements that reflect their debit card activity, for that matter) carefully to ensure that charges listed for their account align with transactions made. Reading all receipts and comparing them with bills is a wise idea, as there may be fees reflected on receipts that consumers are not aware of until their statements arrive. As is true of reading recurring payment agreements, these reviews and comparisons may save merchants unnecessary chargebacks and inquiries.
Merchants can find out more about how to assist consumers with their payment needs here.