Summer 2010
Charge Ahead

As a specialty retailer you accept credit and debit cards every day. Here are five important points to remember that will help you get the most out of these transactions.

According to the Nielsen Report, there are currently 576.4 million credit cards in the United States. There are just about as many debit cards, at 507 million.

That’s over 1 billion cards that people use daily to make all kinds of purchases including specialty items. Every day, specialty retailers and kiosk operators across the country accept credit and debit cards at the register and over the phone.

What happens when the credit card is swiped or used to pay through the Internet isn’t something most retailers think about. But the truth is that working with the right partner/vendor to make that transaction smooth, efficient and cost-effective can be a strategic advantage. Making a few simple changes to the way you accept and process credit and debit cards can impact your bottom line.

Here are five pointers that can help:

Debit or Credit?

You’ve probably asked or been asked this question too many times to count. Unfortunately, many retailers don’t know why they ask the question or what the answer means to them. The truth is that every time a customer chooses credit, you as the retailer pay higher fees and therefore lose a few pennies on each transaction. Those pennies can add up to hundreds or even thousands of dollars each year.

In the payment processing business, credit card transactions will always cost the retailer more than debit transactions. This is because debit transactions are processed electronically with the customer’s bank and happen very quickly. They are simple transactions and don’t need to go through a third party, like Visa or MasterCard. When a customer chooses credit, third parties need to get involved and they charge you for their service.

Doing more debit transactions instead of credit transactions can save you a lot of money over time. First, make sure your register or terminal accepts pin pad IDs. Then, instead of asking “Credit or debit?” train your staff to ask “Do you mind if I run this as debit?”

Take Cards, Get Cash

Cash flow is critical to running your business, especially these days. You need it to pay your employees, order inventory, advertise, and make your rent. Every time you do a credit or debit transaction, it takes cash out of your business for a time. In some cases, it’s just a few days, but those few days could make a difference in ordering the new items on time or paying a bill.

Most payment processing companies have found a way to shorten the number of days it takes to get you your money. You should be able to turn most of your card payments into cash no later than the next business day. Take a look at your agreement with your processing company. If you’re not currently getting your money by the next business day, request that your payment processing company offer it. If they don’t, consider looking elsewhere.

Why Lease When You Can Own?

Leasing is a commonplace practice in business. Chances are that you rent or lease the equipment you use to keep your store going. At some point, someone may have told you that it would be cheaper to borrow something monthly and pay a small fee than to buy it for yourself.

That is not always the case for credit card processing terminals, pin pads and mobile units. You can often purchase the machines used to take and process credit and debit transactions for less than the cost of leasing them for one year. That means significant savings over time.

While the idea of changing your payment terminals to new ones may be daunting, it’s actually quite simple. All you need to do is have the vendor/representative come in, close out or “batch” out the current machine, unplug the terminal(s), plug in the replacement and new machines, and test. It takes very little time—and it’s an investment that’s worth it when you consider the savings over the years.

Go Mobile

As a specialty retailer, you’re always on the go—moving locations, attending trade shows, or setting up home parties to sell product. The last thing you want to do, when you finally get home and off your feet, is to manually input all the credit and debit transactions you made during the day. What if one or more of them are declined? Worse yet, what if you input the wrong numbers and then need to call a customer to apologize for your mistake? This takes time and time is money. There is a solution.

Today, mobile payment processing is a reality for retailers in all kinds of situations. A simple, wireless handheld machine can run credit and debit cards no matter where you are. You know in an instant if you’ve received payment and your customers get a real-time receipt. They are reliable and affordable for any specialty retailer who just can’t be tied down.

Be Secure

Small businesses all over the country suffer from data breaches. They then have to send out an alert to their customers letting them know that their credit or debit card numbers were violated. Business reputations get tarnished. What’s worse, these businesses may lose their ability to take credit and debit cards in the future.

No business is immune to data breaches. If your payment processing company isn’t talking to you about the dangers of data breaches, you may have a problem. The Payment Card Industry, made up of companies like Visa, MasterCard, and American Express, has developed data security standards that you must comply with in order to take their cards. Call your payment processor and ask if you are in compliance.

Taking credit and debit cards will help your business. By learning how to manage those transactions you can maximize that benefit and limit costs and payment delay.

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