Is your store turning away customers

Posted by: Curtis Stevens on December 30th, 2009

Mike from describes his recent experience in a REI store located in California.  It is a warm 80 degrees on a December day.  He went there looking for some clothing and the first thing he noticed is it was warm in the store.  This definitely did not encourage him to try on any clothing.   I think most business owners would agree, nothing turns a shopper away faster than an uncomfortable experience.  Society as a whole is becoming more picky on what they expect and will tolerate.   It doesn’t matter if you or your employees are comfortable, but your customers.   How can this apply to your business?  I personally go to a local gym here in Denton and at times, it feels like they try to save money by not keeping the place at a cool temperature.  I would think most fitness people would agree, that is one of the most important things for a gym.  Another area that can cause inconveniences for your customers is the speed in which you handle your credit card processing. For example, the speed it takes to process a credit card transaction can be critical for a fast food restaurant. Not so much for a sit down eatery, but is for many types of businesses. Also, older credit card machines process transactions slower than newer units. Such as the Verifone 3200 machine is awfully slow compared to a newer units introduced in the last five years.

2009 holiday ecommerce sales are up 3%

Posted by: Curtis Stevens on December 21st, 2009

It looks like 2009 has been a good holiday sales season for Internet merchants.  From Nov 1 to Dec 11, online stores received a total of 19.9 billion in sales, compared to 19.2 last year.  That is a 3% increase over last year during this tough economy.   According to ComScore, last week was the Internets best opportunity to get the last minute shoppers and receive their finale sales for the holiday season before shoppers direct their focus onto retail stores.  We still have some ways to go.  Compared to 2007, Internet merchants have seen several billion less than just two years ago. A 3% increase is great news for the credit card processing industry as well. That means our merchants have processed more compared to last year, which should result in a slight increase in our processing profit as well. I hope this is a sign of a positive 2010.

Discover reports a Q4 decline, I bet I know why

Posted by: Curtis Stevens on December 17th, 2009

Discover released its fourth quarter financial results and they declined compared to this quarter last year.  I’m guessing this has to do with them becoming an association instead of their traditional role.  For decades, Discover played all parts of the role in credit card processing. They were the card issuer, processor and merchant bank. In other words, they gave out the cards to consumers, approved merchants for acceptance and processed all the transactions. I believe sometime in 2008, they started to become an association like V/MC. Instead of them assuming liability on the merchant’s site, banks such as Wells Fargo & HSBC became acquirers for Discover like they are for Visa/MC. Why would all this matter you ask? Before, Discover charged higher discount rates to merchants and they kept 100% of the profit. Now, they have Interchange like V/MC and that is all they collect. What the merchant pays on top of that goes to other people in the chain. Also, the Interchange rates are quite a bit less than what Discover was charging merchants directly 3 or 4 years ago.

7-Eleven extends processing contract with Heartland

Posted by: Curtis Stevens on December 17th, 2009

7-eleven has extended their current processing agreement with Heartland for another 7 years.  I was a little surprised to hear this.  7 years is a long time.  Plus with Heartland’s breach earlier this year, I was surprised to hear a big company like 7-eleven sticking around.  Just because their network was breached, that doesn’t mean they are not secure now, but generally news like that doesn’t go over well.  However, that is great news for Heartland and I think that is awesome.  I am also guessing that the pricing they are paying is extremely low.  From all the quotes and pricing I have heard of current merchants paying with Heartland, it wouldn’t shock me at all if they gave the pricing away very cheaply.  Other associates I know in the credit card processing business would agree with me on this. Granted, with a merchant this size, they generally demand very low pricing, but I also bet that their pricing is probably so low, it isn’t worth the headaches that come with 5,800 locations.  Before the breach, Heartland claimed to have over 250K locations.  I wonder how many they have now after the breach.

You can still lose on gift cards without expiration dates

Posted by: Curtis Stevens on December 17th, 2009

Consumers have been warned for the longest time about gift cards with expiration dates. With all the publicity, most of your big retailers and chains do not impose any expiration dates anymore. This is all great except apparently some states are now claiming those unused funds if you do not us it in a certain period of time. How can they do this? There seems to be a law called “escheatment,” that says the States have the authority to overtake abandoned property. You may not guess unused gift cards would be considered property, but obviously some states are seeing it that way such as New York and California. NY is 5 years and CA is 3. So you better use those cards or lose it. There are many sites out there that you can sell your gift cards to if you have no interest in the store.  Simply do a search online for them.

I personally thing this is not right on the State’s part. The credit card processing business has been preaching for years that one of the best benefits of having gift cards is that the unclaimed money is simply yours to keep. It will vary with every merchant, but unclaimed gift card value can be anywhere from 10 to 20%, which is simply extra free cash for the merchant. Apparently, this is no longer the case if you are located in some states.

Lets all give thanks to the POS credit card terminal

Posted by: Curtis Stevens on December 17th, 2009

Being close to the holiday season, I figured it would be a good time to give thanks to the POS.  I feel the payment industry has been very blessed for many years and all of this is due to the POS, also known as the credit card machine.  Who was the very first company to introduce the POS and when exactly was that?  If it wasn’t for credit card machines, this whole industry wouldn’t exist. wouldn’t exist nor the thousands of payment processors out there as well as Internet commerce. 

Now, with all of this, you still need consumers to buy and pay with their plastic.  So we should also give thanks to all the consumers that do use their plastic.  Without them, the industry wouldn’t have grown from something very tiny to the behemoth that it is today.  If we are going to thank these two, we probably should also thank all the technology companies involved as well, as they helped make all of this happen by bring products & solutions to the table that made the acceptance possible.  Such as being created over a decade ago, creating a whole new industry known as Internet commerce.   In short, I’m grateful for the invention of the POS.  Without it, I wouldn’t have a job today with stable income and an opportunity to do something I really love.  So whether you are a merchant, consumer or one in the same industry as us, lets all be grateful and appreciate everything we have today.

4 Steps to avoid deadbeat clients

Posted by: Curtis Stevens on December 17th, 2009

Many small and even large businesses find themselves spending a lot of time on collecting from their clients.  You do not want to lose their business and even though they haven’t made any payments, you may extend them a little bit more.  And then guess what, they don’t make any payments!  First, get strict when lending new credit, especially to new clients.  Insist on some type of credit card payment or guarantee.  Secondly, give more scrutiny when considering new clients.  Do your research thoroughly.  Do a background check on the company and talk to some of their references.

Thirdly, maintain control over account receivables.  If an account is 30 days past due, give the client a call and start letting them know their payment is due and you will insist prompt payment.  Lastly, find a good debt collections agency.  A good agency can do wonders for you.  They will know all the laws they must abide by and are worth their 20% commission.  From my experience, you have better success when going after owners that have semi-good or great credit as those people generally care about their personal credit.  Ones with horrible credit will generally not care as much if any at all.  Interestingly though, most credit card processing service providers will not take debt collection agencies as a merchant so they can accept credit cards from the clients. Their are processors out there that will, but very few do.

Boston merchants are using cash discounts to lower processing fees

Posted by: Curtis Stevens on December 14th, 2009

The Boston Globe reported that a local Japanese restaurant in Boston has started a modest revoke against Visa/MC.  They are offering cash discounts for consumers that pay with cash.  Such as, on Sundays, maki rolls go for 55% off for cash paying customers.   Diane, the owner of the restaurant hopes this inspires more customers to use cash instead of credit and lower their overall credit card processing bill. Diane doesn’t understand why they must give all that money to the credit card companies. She pointed out that during a down economy, the card issuers haven’t lowered their rates, in fact they have increased some. She is in fact correct on this. However, there is a cost to accepting cash as well. It works fine for small business owners that can oversea the business on a daily bases, but for businesses that are company or franchise owned, cash has a big cost as well. You have theft, loss on miscounting, risk of robbery, etc. Think of it this way, you have a store you own in another stay. You have a manager running that store for you. Now, you have that drawer full of cash that must be managed, handled, accounted for on a daily bases. Credit cards makes everything electronic and eliminates many of the issues cash creates. The downside is there is a cost to it. However, if V/MC would stop increasing Interchange completely during these harder times and maybe reduce it some, I think it would make everyone feel a little happier.

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