Question

Cash and Credit"

Evaluate the nature of cash transactions and determine where management should focus the most effort on improving efficiencies. Explain your rationale. Determine how you could protect hotels in your area from credit card and check fraud. Please give specifics and explain your rationale.

Answer 1

Cash transaction is where cash is given in exchange of a product or service and It does not delay the exhange of the price for the purchase made. Any transaction that has a future contract will not be considered as cash transaction. It is a payment made immediately in exchange of a received item or goods. For improving efficiencies in cash transactions, many steps can be taken by the management like having a properly trainned and skilled staff for the cash trasaction jobs will help handling of cash easy and systematic, making policies and procedures to handle the cash and implementing them on the cash department efficiently, avoiding counting of cash manually as that increases chances of errors and is time taking, monitoring cash flow and organizing it in a efficient manner so that errors can be avoided and increasing accuracy and efficiency by making cash transactions automated.

Credit card and check frauds are very common and very easily taking place all over the hotel industry. As the bills are charged at the time of checkout so if it is not a immediate cash transaction and a future transaction through credit card or check then the chances of fraud is more because the customer pays and leaves and he is unknown to the hotel so it is difficult to trace him and follow up with him in case of fraud. To protect hotels from such fraudulant activities it is important that the hotels take part or full payment at the time of check-in so that the payment can be cleared and its authenticity can be checked during the stay of the guest. Also other details of the guest like copy of identity card, copy of credit card with the cvv number should be taken with the payment and kept for future references too. If all of these also do not stop or avoid the fraudulant practices then making cash transactions compulsory can be implemented which will leave the guest with no option then to make the genuine cash payment and avoid any risk of frud practices through credit card and check.