Are you offering free shipping

Posted by: Curtis Stevens on January 15th, 2010

FreeShippingOffered In today’s market place more and more consumers are expecting Internet merchants to offer free shipping.  If you currently do not, isn’t it time you consider doing so?  A recent report by an analyst showed that free shipping remains an important factoring in normal online sales.   What I found interesting was that the average order amount was higher for merchants that offered free shipping.  When an Internet store offers free shipping for purchases over $75 for example, it encourages consumers to spend more to receive the incentive.  People like to receive free stuff.  This encourages them to continue shopping to see if there is anything else they may like to buy.  Merchants do have a cost by absorbing the shipping cost, but if it were to increase your average sale amount, that would very well pay for it.  Plus, the extra bonus is you landed a customer that could very well come back many more times in the future.  Look at Amazon, their profit margins are very slim, but they have a ton of repeat customers.  Having larger sales does increase your merchant account fees, but then that is also something you must expect too.

Pin-based debit used to be FREE

Posted by: Curtis Stevens on January 11th, 2010


NY Times released a very interesting article last week about pin-based debit transactions.  I have been in this business for years and even I learned a few things about the history of pin-debit.  Pin-debit is starting to become very big business, a big percentage of all electronic transactions.  With the whole economy down and consumers trying to avoid creating themselves more debt, more consumers are starting to use debit cards more frequently than ever before.  When debit cards first started gaining traction in the 1980′s, the small debit networks didn’t charge any fees to process the cards using a pin number.    Sometimes, merchants even received a small kick back as the banks saved money by not having to process a check.  That all changed when Visa entered into the market with their Visa debit card that could be signed for and still attached to their checking account.  This then made the banks money and become appealing to all of them.

As you can see in the chart, the fees for pin debit has been steadily climbing.  You will notice the huge spike in 2007 and that is because Visa’s network (Interlink) removed the cap that debit networks always had.  The cap was a set amount that all transaction costs would not exceed, such as 55 cents, regardless of transaction amount.  By looking at the price in the late 90′s, you can see that they do not have very much cost to process pin-debit transactions. The big reason is they are tied to a checking account, which only gets authorized based on available funds.  Whereas credit cards are attached to lines of credit and consumers can default on that.  Debit cards however isn’t debt, but the same thing as writing a check and ut 100% secure for the bank.  If you do not take advantage of pin-debit transactions, why not call your credit card processing to set that up?  If they cannot handle this for you, then give us a call.

Is it time to wean consumers off huge discounts in 2010

Posted by: Curtis Stevens on January 11th, 2010

This year may look very different for consumers in terms of big discounts.  Many large merchants are reporting that they plan on keeping their inventories low to cut operating costs.   It is different for each industry though.  For example, take the auto industry.  They are slowly seeing a 15% increase in auto sales.   The clothing store on the other hand, maybe one of the few markets that will still be heavily discounting to encourage consumers to keep shopping.  However, the discounts may not be as big as last year.  Deep discounts is a result of overstocking and big chain merchants should do a much better job this year controlling it.  The economy doesn’t seem to be dropping anymore, but it will definitely take time for consumers to feel confident enough to start spending big bucks again.  Business for us in the credit card processing industry took a big drop in December, but things seem to have picked back up after the new year.  This is the main reason for such a delay in posting a new topic.  We are seeing more merchants calling us that are interested in switching processors to save a little bit on their processing fees.

Merchant Accounts | Credit Card Logos | Ecommerce Blog
Merchant Account Articles | Resources | Link-to-Us | Privacy Policy