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Gift & Loyalty Merchant Services Blog

How Can A Gift and Loyalty Program Help My Business

All you ever wanted to know about gift and loyalty programs

Grab your keys, your purse, your wallet, open your glove compartment or junk drawer – I’d bet my life you have a loyalty card or gift card hanging around somewhere.

Go ahead, I’ll wait…

Did you find one?

I know you did. Whether we’re getting loyalty points from our local supermarket to save money on the gas we buy at our local gas station or Aunt Edna gave us a $15 Dunkin’ Donuts Gift Card for our birthday, we all have them: and we’ve all used them.

They’re ubiquitous (I’ve always wanted to use that word… bucket list – CHECK!) and they’re just as valuable for the company issuing them as they are for the customer using them.

Why do we want to run a loyalty card or gift card program?

Are you and your team trying to figure out how you can increase cash flow and sales? Are you trying to figure out a way to retain the customers you have rather than find new ones? Are you thinking about your customer’s experience and how you can make it better?

Loyalty and gift card programs can answer all these questions and so many more. Below are some of the benefits to your business when running a loyalty card or gift card program:

  • Increased sales
  • Improved cash flow
  • Creating cash flow ahead of sales
  • Acquiring new customers
  • Retaining existing customers
  • Giving your customers a better, personalized experience
  • Branding

Let’s take a proverbial step back to understand what a gift card program and a loyalty program are and the benefits of each.

What is a gift card and how do they work?

While most people know what a gift card is they may not realize there are two different types of gift card. It’s actually quite obvious but most people have never given the topic much thought.

Open Loop Gift Cards

Open loop gift cards usually have the logo of one of the major credit card companies such as Visa or Mastercard, American Express or Discover somewhere on the gift card. They can also be co-branded with a retailer or bank such as an Amazon Visa Card. The advantage to an open loop gift card is they can be used at a variety of different stores accepting that card issuers payment cards. Most open loop cards can occasionally also require a small fee up front for processing.

Other types of open loop cards are credit cards, debit cards, or prepaid cards (used by employers to pay employees lacking a bank account or even federal, state, and local governments for public assistance benefits) but that is a conversation for another day.

Closed Loop Gift Cards

610 Merchant Services Gift cards and Loyalty ProgramsClosed loop gift cards are unique to the retailer, restaurant or business who issues them. They are branded and cannot be used at any other business to make purchases. Most closed loop gift cards are processed just like your regular credit cards and debit cards and are often processed through the same point of sale device, terminal, or card reader.

Another type of closed loop card is your favorite retailers credit card. Take your Target credit card for example. This card is a credit card and functions just like an open loop credit card but can only be used at Target. Again, we’ll tackle this another day.

For the purposes of our conversation today, we will be only be referencing closed loop gift cards. 610 Merchant Services and merchant services companies such as ours, can not issue open loop gift cards for use at your business.

Benefits of having a gift card program for your business.

Building Your Brand

Every year over 90% of US consumers purchase or receive a gift card. Offering branded gift cards is a great way to build and enhance your brand’s visibility and to generate more first-time customers. In addition, branded gift cards are easier to track than traditional advertising practices and ensure customers will visit and spend money in your store.

Incentive to spend money at your business

When someone is given a gift card to use at your business, as opposed to cash, those customers have no choice but to spend it at your business. Plus, after visiting your store, experiencing your customer service and using your products or services, the hope is they will return to spend more.

Generate money ahead of sales

Your business gets paid in advance for any product or service you provide when a gift card is purchased. Better still, consumers often spend more than the value of the card. As an added bonus, that revenue is recorded whether the card is used or not. There are literally billions of dollars (that’s a ‘B’ for BILLIONS) of unused gift cards in the United States alone.

Endless promotional strategies

By using gift cards at your business, it opens the doors to endless promotional strategies. You can give away gift cards on radio station promotions, vendor fairs, contests, charitable fundraisers and so much more. It’s an easy way to get your brand in front of new customers.

Opportunity to create a Loyalty Program

Looking for a great opportunity to create a loyalty program at your business? Gift cards can be the answer. For example, you can integrate a loyalty program with your gift cards and for every $10.00 spent by your customer they’ll receive points. Customers can redeem those points in the form of… you guessed it: a gift card redeemable at your store.

What do I need to start a gift card program?

Starting a gift card program is very easy. In fact, most of the work is done by your processor and all you need do is choose a style or create a custom layout, choose the quantity of cards you’d like to start with (there may be minimum orders but (#shamelessplug) 610 Merchant Services will give you the first 50 for free), then start selling them at your counter or give them away to encourage first time customers… easy peasy.

What is a loyalty program?

Give Your Customers the Gift of Loyalty - 610 Merchant ServicesWe all know how loyalty programs work with large worldwide, nationwide, or even regional brands. Most, if not all of us, have a loyalty card with our favorite supermarket and scan our cards before each purchase redeeming the loyalty points or dollars we earn every time we shop for deeper discounts, savings at sister brands, or even savings at the gas pump.

There is a misconception that loyalty programs are for large corporations only. They’re not.

Here we’ll be studying the smaller service oriented or local retailers. The type of business without the resources or the need for a complicated system. Mom and pops who would like to show loyalty to their customers in return for their continued patronage.

How can my small business take advantage of a loyalty program?

Customer loyalty programs are a great way for small businesses like yours to engage with customers beyond just the purchase, making them happier and more likely to keep buying from you. And, more importantly, keep them spending their money on your products and services.

Are there repeat purchases of your product or service? If so, you can easily create a loyalty program for your customers. You can offer a gift card on every 12th month of service. You can offer a discount with a strategic partner and they can offer their customers a discount with you.

With a little bit of thought and creativity the possibilities are endless. Even better, why not ask some of your best customers what they would want from a loyalty program. They’ll tell you and you’ll know what you’re offering is of value to them.

How can I keep track of purchases and customer data?

Great question!

If you have a retail business with a Point of Sale (PoS) system all you’d have to do is ask at the time of sale for the customer’s phone number, email, or even just their name and your PoS system will log that sale under your customer’s profile. If you don’t have a PoS system, (#shamelessplug) call 610 Merchant Services and we’ll be glad to get you set up.

If you have a service-based business like an HVAC company or home cleaning service, you can easily track your customer activities through your appointment and bookkeeping software.

For even smaller companies with just a few customers a month or even a year, you can use your bookkeeping software like QuickBooks to track your customers and store their data.

Benefits of a loyalty program for your business.

Collection of data

Information is key. Not just any information but real customer data. Customers today want and expect a more personalized experience. Encouraging customers to complete profiles as part of your loyalty program allows you to gather the information needed to not only personalize the customer experience, but to create more targeted marketing campaigns and build better relationships with your customers.

Save money

Customer data can be used to for small retail stores to understand purchasing trends and help you keep items in stock that sell quickly instead of warehousing items that collect dust and can cost upwards of twenty-five dollars a square foot to stock. For service-based companies, the customer data collected can help you improve your service offerings which in turn will allow you to raise pricing on better services.

Customer appreciation

A personalized loyalty program will make your customers feel like they have an emotional connection with you and your brand and feel appreciated. A little bit of appreciation can increase customer patience in case of mishaps, improve their interactions with you and your employees, and even remove price sensitivities that would otherwise cause them to move to another option. Showing appreciation is as easy as celebrating your customers special day, anniversary, birthdays, etc. with points or rewards or free services.

Increase sales

Using the information you gather about your customers will allow you to make better, targeted purchasing suggestions which will increase the likelihood they will purchase suggested products. A customer who feels they have a more personalized shopping experience will spend more money.

Customer retention

Although creating and rolling out a loyalty program does involve a small investment, customer retention strategies are often seven to ten times less expensive than attracting new customers. Customer retention boosts your profits through savings in marketing and increases in sales to loyal customers.

Brand Advocacy

Showing appreciation for your customers and repaying them with the same loyalty they show you is the easiest way to create brand advocates. Real brand evangelists who will talk about you at every opportunity which translates to more loyal customers and more sales.

Attract new customers

Who doesn’t love a good discount?! If a potential customer sees or hears of a good loyalty program where rewards are easily accessible and redeemable, they’re more likely to abandon a brand with a poor or non-existent loyalty program and try your brand.

How do I start a gift or loyalty program?

Getting started with either of these types of programs is as easy as calling your current merchant services company. If they can’t help you (here comes another #shamelessplug!) give 610 Merchant Services a call and we’d be glad to hook you up.

What do I need to start a loyalty program

Here are few steps you may want to follow when starting your customer loyalty program.

Know your current customers

How to Start a Gift Card and Loyalty Program by 610 Merchant ServicesKnowing as much information on your customers as possible is probably the most important step in starting your loyalty program. Keep these questions in mind when you begin building your program:

  • How much does this customer spend every year?
  • What types of products do they buy and how frequent?
  • How long have they been a customer?
  • Is there an opportunity to offer them upsells or addons?
  • Do we profit from their purchases?
  • Is there an opportunity to improve our business relationship?
  • How satisfied are they with the relationship now?
Plan

Before starting a loyalty program, you should know, or at the very least have an idea of, your customer’s current level of satisfaction with your brand. Send out surveys, read the reviews your customers are posting or even conduct your own customer interview.

Set realistic goals

Set measurable goals for the program and don’t forget to measure them. Simply setting the goals and not knowing if you achieved or even exceeded them defeats the purpose. Using a good PoS System or CRM is very helpful.

Set the budget

Set a budget for managing customer retention and a separate one for developing new customers. To do so, consult your industry average, if you are looking for above‑average growth, increase your budget accordingly.

Choose who to target

Using the information you gathered during your surveys and/or interviews categorize your customers by criteria based on your business objectives. Some criteria could be:

  • Volume of purchases
  • Loyalty of customer over time
  • Willingness to purchase other products or services from you
Use what you have learned

Use what you have learned to find creative ways to build your loyalty program that will entice or enhance your customers relationship. Things like:

  • Monthly customer check-ins
  • Recognizing birthdays
  • A “just for you” gift
  • Private shopping

Let’s get started!

Gift and loyalty programs are a great way to improve sales, improve cash flow retain customers and build a tribe of advocates. I can’t think of a single industry or type of business that wouldn’t benefit from one if not both of these types of programs.

If you’d like to take your business to the next level, contact your merchant services provider or contact (#shamelessplug) 610 Merchant Services and we’ll talk you through the process and help you figure out the right plan for your business and your goals.

Categories
POS Systems

Why Square May Not Be A Good Choice

Why Square May Not Be A Good Choice

If I had a nickel for every time we’re asked “What’s the difference between 610 Merchant Services and Square?” we would be sitting on an island beach sipping margaritas.

There are some differences between us and Square, but the biggest difference in our payment processing models is 610 Merchant Services is a merchant account provider, whereas Square is a processing aggregator.

610 Merchant Services is a merchant account provider, which sets up merchants with their own dedicated merchant account: a type of account required for businesses to be able to accept payments by debit or credit cards.

Square is a processing aggregator which simply means, merchants are set up to accept credit and debit card without having their own merchant account. Square bunch merchants together into one pool or aggregation, and each merchant processes payments with a joint merchant account.

Square has a quick set-up process and as a result, a low entry barrier for all businesses. This means that they can accept many higher-risk businesses that merchant account providers can’t or simply won’t work with.

Let’s Compare… 

610 Merchant Services Square
Merchants own their own dedicated merchant account. No dedicated merchant account
A longer application process Offers a quick and simple application
Merchant Service Providers gather information for example processing volumes and types of transactions. If there is any unusual behavior with the processing the merchant is notified, rather than finding out when the account is frozen or worse yet, terminated. Processing Aggregators usually experience a higher risk for fraud which means more account freezes, holds or sudden terminations without notice.
Merchant Service Providers are able to customize rates for each business, offering more competitive pricing. Offers fixed pricing. This does become very expensive as merchants process more
Merchant Service Providers provide next-day funding Merchant must rely on the payment aggregator to transfer funds. Payment aggregators can withhold funds if they wish

 

What does that mean for your business?

Both models have their pros and cons – it simply comes down to your unique business needs.

If your business is processing low volumes, or you’re a seasonal business Square is an ideal payment partner. The costs are straightforward and simple-to-understand. However, because aggregators offer fixed rates, businesses processing more than $10,000 will almost always save costs with a merchant account provider’s tailored fee.

For an established or growing business with a higher volume of transactions, a merchant account provider, like 610 Merchant Services will be more beneficial. It requires more time and commitment at the beginning, but once set up, you can rest easy knowing that you are working with a trusted partner.  610 Merchant Services has the tools and resources businesses need to help them grow.

Categories
POS Systems

Why a POS System is The Right Tool for The Right Job

Why a POS System is The Right Tool for The Right Job

One of the many challenges for business owners is finding the right tools to help them manage their businesses. Without the right tools, managing a business can become chaotic and expensive.

Imagine yourself ending the day with a stack of ledgers to account for all the products sold, the inventory that needs to be ordered, the taxes you have to pay, the hours your employees worked and more. Businesses used to hire bookkeepers to do this all day. Now, because business is run on such tight margins, you’re trying to do this yourself in the evenings or on weekends.

All that free time you thought you would have when you started your business gets eaten up by… well, running your business. Never mind the school play your son or daughter is in, squeezing in an occasional round of golf or even spending time with your spouse.

True story…

My husband Michael is an amateur chef and loves to be in the kitchen creating something new and decadent for our family to eat. He tells me all the time “use the right tool for the right job.” One night while trying to help in the kitchen, Michael asked me to chop up some vegetables. Simple enough, right? So, I got started…

I looked over and saw Michael staring at me with mild amusement while dodging vegetable peelings and the occasional errant piece of carrot shooting across the kitchen like a missile. Frankly, I don’t know what was so amusing – I thought I was doing a fine job. He walked over and politely shuffled me to the other side of the counter and said, “Using the right tools for the right job makes everything go smoother”.

Using the right tool for the right job is critical to running your business

I watched as Michael cleared my workspace and meticulously set up his workstation with the proper size cutting board instead of the small 6 inch cheeseboard, a vegetable peeler instead of the paring knife I was using, a chef’s knife rather than a steak knife, and a bowl to catch the peelings. I was admittedly in awe as I watched his precision knife skills and the ease with which he worked using the right tools for the job.

As an added bonus, there were no carrot missiles flying around the kitchen and what would have taken me 15 minutes (and possibly a fingertip or two) to do was done in about 3 minutes.

I tell you this not to give you an idea of the totality of my ineptitude in the kitchen, although that is real 😊, but to offer an example of where having the right tool for the right job creates a better outcome.

Are You Using the Right Tools for Your Business?

What’s true in my kitchen is true in business.

Are your employees still punching a time clock? Are you creating written schedules and tracking with sign in sheets? Wouldn’t it be better to have employees easily sign in and out of their shifts using a system that automatically calculates hours and pay?

610 Merchant Services provides state of the art business management tools

Are you manually counting stock and using spreadsheets to manage inventory and order new stock? Are you analyzing what is or what is not selling? Wouldn’t having a system that automatically kept inventory and let you know what items are not moving well and which are then alert you of low stock quantities and when an order may be necessary be a better way?

Is your capturing of customer data such as email, birthday, buying habits etc. nonexistent? Are you reminding yourself of important customer birthdays with post its strewn around your office? Would a system that captured all of your customer’s data to provide them with incentives to purchase more of what they like and introduce them to new products they may enjoy be a better alternative? Would sending them a post card or email around their birthday increase their loyalty and allow you to market to them more often?

Are you spending your weekends and evenings manually maintaining spreadsheets and combining data to produce reports of dubious accuracy? Are you not producing reports of the information at all? Wouldn’t having multiple, accurate and preset reports with the click of a button be a better way? Would creating custom reporting to reflect the needs of your unique business with a custom report tool be better than no reporting at all?

Exatouch Point of Sale System by 610 Merchant ServicesStreamline your business with a full-featured POS system that keeps you up to date with the latest payment processing technologies, and helps you easily manage your day to day operations.

With a POS system, you can manage employees, improve customer loyalty, improve cash flow and inventory management, understand your customer buying habits and keep what your customers want in stock, create easy to use, one click reports on the health of your business, easily manage vendors, table mapping for your restaurant, manage scheduling for your beauty parlor, and more.

The Right Tool for the Right Job Saves You Time and Money

Whether it’s equipment needed to perform a task or software applications to handle processes and reporting, it’s important for your business to have the right tools.

Having the right tools can save you money in manpower, inventory control and more. It can help you create efficiencies in running your business and help keep you from making poor buying decisions with robust reporting tools.

After all, as business owners, we all want to save some money and be able to enjoy the little things in life again. So talk to your merchant services team today and create the time, the money and the peace of mind to laugh at all the miscues in your child’s first school play, grab some time to decompress and improve your handicap or get in the kitchen and cook that great meal with your spouse.

A POS system can save you money and time and isn’t that what we all want.

If you’d like to get started with a POS system that can save you time and money you can give us a call at (540) 446-0826. We’d be glad to help!

Categories
Credit Card Processing

How To Create A Cash Discount Program For Your Business

Have you ever pulled up to a gas station and see two prices for gas, one for card users and one for cash? I’m sure you have. Gas stations have been using cash discounting for almost ten years now. Finally, store owners and other types of merchants are catching on.

Cash Discounting is becoming more popular with business owners as they discover the benefits of passing credit card processing fees to customers who prefer the convenience of using their credit cards. They’re finding they keep more of their hard-earned money and are able to use reverse cash discounting to grow their businesses.

In addition, surveys have shown, merchants find the loss of some customers negligible. In fact, those surveys report that 99.2% of people asked didn’t mind at all. They understand the cost of using credit cards and accept that small cost for the convenience.

How do I create a cash discount program for my business?

Many naysayers will tell you the process is too complicated. They’re wrong.

The process is easy and, thanks to the Durbin Amendment to the 2010 Dodd-Frank Law, the guidelines are clear. You can read the full bill and amendments if you’d like but be warned, you should be in a place with a soft, pillow lined table or desk – you will fall asleep and fall face-first in a legalese daze.

That’s why you have a professional merchant services provider like 610 Merchant Services. We’re here to protect your beautiful profile and protect you from making costly mistakes with Uncle Sam.

There are a lot of details about posting prices, pricing regulations, and rules about profiting from this sort of program that your credit card processing representative can walk you through. Some of those rules are:

  • Posting cash discount signage at the entrance to your establishment and at the point of sale at the counter
  • Clearly representing the cash discount on your receipts (really bad photoshopped example below)
  • Ensuring your staff is alerting customers of the program verbally
  • Here’s the big kahuna – YOU CAN NOT PROFIT FROM CREDIT CARD FEES. ALL FEES MUST BE PASSED TO THE CREDIT CARD COMPANIES.

Merchant Receipt with and without Cash Discount - 610 Merchant Services

What it comes down to is you shouldn’t try to do this on your own. While the rules and regulations are pretty clear, it’s always best to have a professional merchant services company like 610 Merchant Services work with you.

Can’t I just add a surcharge?

No.

A surcharge is very different than a Cash Discount. A surcharge, which is legal in only ten states, is generally a fee that is added to the price of your product or service and is usually added to an existing tax. For instance, my mobile phone bill has 5 surcharges listed one of them being a State Telecommunications Excise Surcharge (yeah… I’m paying $0.16 for that per phone line!).

A Cash Discount is the elimination of a fee at check out.

Very different.

How do I apply the Cash Discount automatically?

Great question… You should have an up to date POS (Point Of Sale) System or, if you don’t have a POS System, your merchant services provider can have the discount programmed into your card payment machine on your counter.

What are the benefits of a Cash Discounting program?

There are lots of benefits to the merchant as well as the customer. The customer saves money on their purchases and avoids costly interest rates on their credit cards. The merchant avoids paying the processing fee and can reinvest into his or her company, purchase more stock for the shelves or even hire new employees. It’s a win win for everyone except the billion dollar credit card companies.

You’ve convinced me… How do I start?

Simple. Call your merchant services provider. The program should be available through them. Or you can give us a call at (540) 446-0826. We’d be glad to help!

Categories
Credit Card Processing

How Reverse Cash Discounting Can Help You Grow Your Business

How Reverse Cash Discounting Can Help You Grow Your Business

How did business owners get stuck paying the convenience fee for allowing customers to pay with their cards? Why are we paying for the customer’s convenience? It’s just not right!

Who thought up how credit card services were going to be paid for anyway? It sure as heck wasn’t a small business owner!

Being in business is hard enough without worrying about your bottom-line month after month.

The good news: it’s been fixed.

Yep. Reverse Cash Discount is liberating business owners from the incredible burden of large automatic withdrawals from their bank accounts every month. Now those business owners can use their new-found cash flow to invest in their business, get caught up on arrears, hire new employees and so much more.

I know, I know, you’re asking “But, is it legal?”

ABSOLUTELY! (say that in your best Rocky Balboa voice…lol!)

Let me show you how.

What is Reverse Cash Discount?

Great question! The simple way to put it is the reverse cash discount program passes the cost of accepting credit cards to the card holder instead of your business. This is how it should be, right?

Worry no longer about holding cash back for monthly withdrawals. Now the fee is passed on to your customer and all you have to pay for is your account on file fee and possibly some other minor monthly fees.

Here’s the shameless plug for today. 610 Merchant Services only charges $9.99/mo. with no other fees like most merchant services companies. Plus, we can set up your account where most, if not all of the monthly fee is taken care of as well.

Yes. You heard that correctly. 610 Merchant Services can provide, in most circumstances, a zero-fee account. If you’d like to know how, give us a call at (540) 446-0826.

Anyway, enough of the shameless plug… let’s get back to our blog.

How does Reverse Cash Discount Work?

It’s always easier to explain these things using an example. Let’s go back to the G.I. Joe with Kung Fu Grip example we used in an earlier blog about friendly payment card fraud.

Let’s say my husband is in an antique store and he finds his favorite childhood toy, the G.I. Joe with Kung Fu Grip, and it’s in mint condition. He just has to have it. He picks it up and finds it’s only 100 bucks, so he gleefully brings it to the counter and makes the purchase with his credit card.

Happy ending, right?

Well the story’s not over yet.

Stressing over monthly accounting - 610 Merchant ServicesNow the owner of the antique store has to save at least 4% of that purchase in his bank account because he knows that come the end of the month the credit card processing provider is going to take out their share of the sale. Yep. The credit card processor gets up to 4% or 4 bucks for doing nothing. Quite a racket huh?

It’s not really that simple but for the business owner who has to give away 4% of what he’s earned, it’s a lot and it’s annoying as hell. There’s got to be a better way.

There is.

Reverse cash discount solves this problem by charging the customer at the point of sale the 4% or whatever percentage the business owner has decided upon not to exceed 4%.

Here’s the new story with a better happy ending…

Let’s say my husband is in an antique store and he finds his favorite childhood toy, the G.I. Joe with Kung Fu Grip, and it’s in mint condition. He just has to have it. He picks it up and finds it’s only 100 bucks, so he gleefully brings it to the counter where the clerk rings up his purchase for $104.

My husband sees a sign that clearly states “There is a 4% Customer Service Fee applied to all sales. Pay with cash and save!”

He tells the clerk, “Does anyone actually carry cash anymore…? I’m paying with my card.” The clerk hits the appropriate button and the transaction goes through without a hiccup.

My husband is happy he found his favorite childhood toy, G.I. Joe is happy to have found a home, the credit card processing company is happy because they pull the 4% Customer Service Fee from the daily batch and the store owner is happy to have saved himself from the accounting nightmare of holding on to the $4 and he probably made a few extra cents to apply to his monthly merchant services fee.

That’s a happy ending!

Here’s the story with the best happy ending!

Let’s say my husband is in an antique store and he finds his favorite childhood toy, the G.I. Joe with Kung Fu Grip, and it’s in mint condition. He just has to have it. He picks it up and finds it’s only 100 bucks, so he gleefully brings it to the counter where the clerk rings up his purchase for $104.

My husband sees a sign that clearly states “There is a 4% Customer Service Fee applied to all sales. Pay with cash and save!”

He digs deep and he’s amazed to find I haven’t touched his wallet in a few weeks so he actually has the cash on hand. He tells the clerk, “Look at that! I have cash.” The clerk hits the appropriate button and the transaction amount reduces to $100 even.

My husband is happy he found his favorite childhood toy, G.I. Joe is happy to have found a home, and the store owner is happy to have all of his $100.

The best part… the credit card processing company isn’t happy in this scenario because they can’t pull the 4% Customer Service Fee from the daily batch. In other words, they don’t make money from the hard-working business owner or my husband.

Oh yeah, I forgot the happiest person in this whole scenario is me. Now my husband will hide in the basement playing with his favorite childhood toy all weekend instead of bothering me!

That’s the best ending!

How can I get started with Reverse Cash Discount?

Simple. Call your merchant services provider. The program should be available through all of them. But, if you’d like to see if there is a merchant services company out there that can help you bring your fees to zero every month, I may know someone… wink, wink.

With the money you’ll save month after month using reverse cash discounting, you can grow your business by investing back to your company, hire more staff, or buy more stock. The point is, business is hard enough without having to worry about saving money aside for billion dollar credit card companies when you don’t have to.

Categories
Credit Card Processing Security

4 Tips on How to Avoid Friendly Credit Card Fraud

Let’s face it, fraud sucks.

Can we say that out loud?

Fraudsters everywhere are making money hand over fist scamming business owners just like you. It’s a game to them. It’s fun. To them, you’re just another faceless small business owner with a fat bank account that can afford it. They don’t care or know if that’s actually true and they don’t give a rat’s nether region either.

Fraud sucks and the worse kind of fraud is friendly fraud.

Friendly Fraud?

Yep. Friendly fraud.

I know the term includes two words you never thought you’d hear in the same sentence, but it’s real. Friendly fraud is when a customer makes a claim that on it’s face seems like a viable claim to the credit card company. And, since the perpetrator of the fraud is a customer of the credit card company, the credit card company does everything in their power to defend the customer.

What’s Friendly Credit Card Fraud?

The easiest way to explain it is to give you an example:

John wants a new G.I. Joe with the kung fu grip. He heads over to your online store where you sell vintage toys and buys one for $125.00. GREAT! You knew someone would want it and they did. It’s off your shelf and the 10 bucks you paid for it at the garage sale was well worth it.

Until it’s not.

You see John had a plan.

He was going to order the G.I. Joe with the kung fu grip and when he received it his plan was to call his credit card company and dispute the charge. You just happened to be the first person he found and now you’re left holding the bag. You see, the credit card company just took back the $125.00 directly from your bank account and charged you a $65 charge back fee that you couldn’t cover so the bank just charged another $29.00 insufficient fund fee.

Yay! Lucky you.

That’s friendly fraud.

Why is it Called Friendly Fraud?

It’s called friendly because any real and loyal customer may have a viable reason to get their money back. Maybe it’s a returned item. Maybe the item never made it. Maybe it was damaged. Maybe the order was canceled and not caught in time. There are any number of reasons.

The point being, it’s hard to determine what a real claim and a fraudulent claim is. After all, there are millions of transactions every year where something goes wrong, and the customer is entitled to a refund.

What Are Common Friendly Fraud Claims?

Some of the claims fraudsters may use when contacting their credit card company include the following:

  • The item wasn’t delivered
  • The item doesn’t match the online description
  • The item was returned but the refund was never processed
  • They canceled the order but the item was sent anyway
  • They don’t remember buying the item so the card must be compromised.

Great. Now that you know what some of the common fraudulent claims are, you probably want to know how to protect yourself. We’re getting to that, but I want to first reiterate that most of the times these claims are valid and that’s what makes this a very difficult type of fraud to combat especially for large merchants.

How Can I Help Prevent Friendly Credit Card Fraud?

Glad you asked!

Here are 4 tips you can use to avoid friendly fraud:

  • Require a signature upon delivery to verify the customer received the order. Having a paper trail that shows the product was ordered and delivered will help when working with the credit card company and hopefully give pause to the fraudsters.
  • Your refund policy should be clearly displayed on your website and be easily available to the customer. Make sure your refund policy states that a refund is issued when the item is returned and specify a period of time for return.
  • For returns, be sure to issue return labels with tracking information so there is a paper trail documenting the return. Providing a paper trail that confirms the customer did or did not return the item is important. You can also include an email and online account order history that clearly shows all transactions.
  • Collect as much customer information as you can. Having a customer database that includes order history, delivery dates, and call logs with your customer service representatives is a great way to deter fraudsters. If they know you’re being vigilant they will look elsewhere for a victim.

Yes. Friendly Credit Card Fraud is a thing and you can help prevent it from happening to you. Follow these simple steps and keep your house in order – fraudsters go after the easy targets.
Now please send me the link to the G.I. Joe with the kung fu grip because my husband is a 55 year old child and would love it.

Categories
Security

How Criminals Are Using Your Website To Verify Stolen Credit Cards

Over our twenty-year history of helping merchants with their payment processing and POS needs, we have found that criminals attempting to verify stolen credit cards has increased as the number of websites accepting credit cards has increased.  While this a serious matter we have found that it’s relatively simple to fix and prevent.

In recent years there were 28 million unauthorized transactions on credit, debit, and pre-paid cards totaling $4 billion in fraudulent charges. We all have a role in preventing this kind of fraud and the damages it inflicts on its victims.

Why criminals use your website to verify stolen cards

Criminals use poorly protected shopping carts on websites to test whether or not the stolen credit card numbers they purchased or are getting ready to sell are valid.
They do this using bots that can create thousands of transactions over several websites within minutes. They use small transactions generally less than $1.00 to avoid suspicion.

This generally happens to merchants because they’re not paying attention to their monthly statements and in an effort to lower as many barriers as possible for customers to easily purchase from them they are in turn decreasing the amount of security measures in place.

This is bad for you because even though it is a fraudulent charge it still counts as a transaction and you have to pay the fees. This may not seem like a big deal on a $1.00 charge but if you multiply that by eight, fifteen, or even 20,000 charges it becomes expensive.

This will cause your merchant account to be suspended and not allow any transactions at all on your website. You may not even know that this has happened for days or sometimes weeks. The loss of revenue could be catastrophic for a small business or an e-commerce store.

To avoid the problem there are some very simple things you can do.

  • Use human verification. This type of application is necessary to avoid bots from being able to make transactions on your shopping cart. You can go to Google reCAPTCHA to get a free human verification app. Be sure to have the human verification located at time of payment.
  • Enable Velocity Filters. With a Velocity Filter, you can prevent thieves from rapidly testing multiple credit card numbers against your business’s merchant account. This tool will reject transactions made based on specific filters you set. Some filter parameters are credit limit, sale amount or transaction count.

Preventing this kind of fraud on your website is not difficult. Simply make sure you’re checking your statements on a regular basis, limiting the number of transactions, and use human verification at checkout.

If you need some help or some free advice please feel free to give me a call at (540) 446-0826 or email me at [email protected]

Categories
Credit Card Processing

How COVID-19 may change how your business takes payments

Before COVID-19 your customers never gave a second thought about entering their PIN number on your credit card terminal or grabbing the pen from your store’s clerk to sign a receipt.

Now consumers are anxious about the spread of COVID-19 and are being cautious about what they touch in public. Even though you may have instituted new policies around cleaning your credit card machines and screens, according to a Mastercard study, 50% of consumers worry about touching these devices.

From IBM’s creation of the Magstripe in 1960 to EMV in 1994, advances in payment technology have always played a big role in how consumers interact with businesses. In fact, just over the last 5 years, innovation and technological advances have again drastically changed how you accept payments.

From digital wallets and wearables such as smart watches to ‘tap and go’ (Near Field Communication or NFC) cards there has been a huge shift in how consumers purchase goods and services. And, while the United States has been slow to adopt contactless payments, the international market has been full speed ahead for over a decade.

How COVID-19 is changing the way customers pay you.

In a recent study conducted by American Express, the impact on in-store purchases shows 58% of consumers who have used a contactless payment method state they are more likely to continue this form of payment now.

Further, the study shows that the handling of cash is down as well. According to the study, more than 16% of consumers no longer wish to partake in cash transactions. The study also found 15% of consumers say they no longer wish to insert or swipe their credit or debit cards.

Fifty percent of consumers also agree that using contactless is safer for personal health than using cash or swiping a card and it is more convenient and faster with both bolstering an almost 10% increase in the past 8 months.

What can you do to keep your business current with consumer desires

Below are some of the easy things you can do right now to keep your business up to date with today’s consumer

Upgrade payment processing equipment

  • Call your merchant service provider to see if they can provide an upgrade to your credit card terminal for NFC or ‘tap and go’ transactions
  • Upgrade your POS (point of sale) equipment to utilize NFC transactions
  • If you have age-appropriate wares upgrade to a digital scanner to confirm the age of your customer

Improve your online store

  • Make it easier for people to shop and pay online so they can pick up at your store
  • If you don’t have a website with eCommerce ability contact Stafford Technologies to help you move your inventory online
  • For the foodservice industry, be sure your menu is online and interactive
  • Make it easy for people to understand the number they need to call to order and pay over the phone

Advertise contactless payment at your business

  • Put signage in your windows letting people know you have contactless payment options
  • Ensure your website reflects all your contactless payment and pickup options
  • Include a banner in all your advertising alerting consumers you have contactless payment options

COVID-19 has created a change for the better in how consumers and businesses interact

Consumers are seeing the benefits of interacting with your business through contactless payment and, this form of payment is quickly becoming the consumer’s favorite way of paying for goods and services.

As a business owner, while you do want to remove as many hurdles as you can to make visiting your business and buying from you as easy as possible, there is the added benefit of lower costs in labor, increased productivity, and more efficient payments.

Improve the way you take payments today.

Categories
Business Credit Card Processing

How To Keep Your Hard-Earned Money

Let’s face it, the way we do business has changed and you may be accepting more payments without a card present.  A card-not-present (CNP) transaction is when a customer buys something online or over the phone and you don’t have access to the card used. From curbside to online, here are a few ways to help prevent card not present disputes no matter how you’re doing business.

You can prevent disputes and fraud with these handy tips


Online Orders:

  • Cancellation and Return Policies: Clearly display your policies. Provide tracking once order ships and use an “I agree” checkbox prompting policy acknowledgment during the order process.
  • Confirm Identity: Confirm the customer’s identity by asking for the complete billing address and the CVV code on the card.
  • Tracking: When shipping products, send tracking information once the order ships.
  • Recurring Transactions/Subscriptions – Send an email reminder before each cycle

Telephone Orders:

  • Cancellation and Return Policies: Clearly communicate your policies with your customers.
  • Verify Shipping Information: Confirm you are shipping to your customer’s billing address. If not shipping to the billing address, ask for a “ship to” address and send tracking information once the order ships.
  • Shipping & Delivery Expectations: Set clear expectations on delivery time frames and update customers if there are changes.
  • Send Order Confirmation: Includes details of the order and relevant policies. For services, be sure you clearly communicate your terms & conditions and cancellation policy.

Curbside Pickup Orders and Deliveries:

  • Order Confirmation: Send confirmation as soon as the order is completed that includes your policies and pick-up instructions. If someone other than the Card Member is picking up the order, be sure to note this on the order invoice and confirmation.
  • Get Receipt Acknowledgment: Have the customer sign the credit card receipt when the order is picked up or delivered. If the customer’s email address was captured when the order is placed, send an order status with pickup details such as the date, time, and person who received the order. NOTE: This can act as a supporting document in case of a dispute.

Best Practices for Managing Disputes with Card Not Present Purchases

There are three types of chargebacks where the customer calls his or her credit card company or bank to reverse a charge. Below we’ll look at all three and ways you can insolate yourself from giving back your hard-earned money.

No knowledge on the part of the Card Member

  • Use the name your customers know your business by on your merchant account. This way your customer recognizes the charge on their card statement.
  • Include the customer service phone number on statements
  • Explain auto-renewal and auto-shipment terms for free trials, reiterate your cancellation policy in your confirmation emails and include the steps the cardmember should take once their trial ends

The Card Member claims that the transaction was returned or canceled

  • Clearly display return and cancellation policies
  • Note “non-cancellable” or “non-refundable” purchases
  • Call out advance payments that are billed immediately
  • Send a reminder 10–30 days before auto-renewals or recurring billing
  • Issue refund credits promptly

The Card Member claims that the goods/services were not received

  • Hold the charge until shipping or service date
  • Notify customers about delays in fulfillment
  • Confirm when subscriptions will begin
Categories
Business

Online Meeting Fatigue – It a real thing

We need to get back to normal

Maybe we need to have everyone make their broomsticks defy the laws of physics and close whatever otherworldly portals they opened. As millions of people stay indoors due to the COVID-19 outbreak, we moved our way of connecting to a virtual world.

During this time of social distancing and self-isolating video conferencing has allowed our lives to adapt. Businesses are having employees check in remotely with their teams, schools have gone digital even our grandparents are participating online.

Who is with me when I say “I am so over this”?

Thank goodness for the people who can cut through the bullshit and find the ridiculousness during these stressful times. The COVID-19 pandemic has given many joke makers and meme creators a plethora of material to turn lemons into lemonade, and online meetings have provided their share of opportunities to provide us with the comedy relief we so desperately need right now. From people being stuck as images of potatoes to intentionally using green screens or dressing up as different characters, these virtual times are redefining business casual in hilarious ways.

As fun as it is to laugh about people who enter our homes accidentally by walking in the background of important meetings in their robes or our children asking for yet another snack, these virtual meetings are causing exhaustion. The fatigue you are feeling from a day of these types of meetings is real. If you are sick of your online workspace, you are not alone.

While technology has been very effective in keeping us connected, there is also a loss of connection, just ask any extrovert. My husband, for example, a business owner/salesperson, a person who is always on-the-go looking to meet or talk to anyone is now forced to stay stationary. While we continue to be on webinars or virtual meetings his superhuman ability to read the room is limited.

Needless to say, in-person all-day meetings are exhausting but there is always a few minutes in between each to stretch or walk to the next conference room, and you were in a physical place with other people where you can see facial expressions, collaborate ideas or feel the energy of the space and read body language. All of that gives us the insight needed on how to move forward. We simply don’t get that from video calls, especially if one of your colleagues or meeting attendees suddenly and “magically” morph themselves into a freaking half human half-cat creature.

With online meetings it is hard to know when to speak – this simple cue is easy enough to pick up in a physical meeting. Some attendees just aren’t forward enough to just “jump in”. In addition, And if we are trying to cram in as many people as possible simply for ease of it all we are taxing ourselves to the limit.

It’s Fight Or Flight

We are hyper-focused on not only navigating this new work environment but all the external things as well. Where are the kids? I hope they don’t interrupt me…again! How do I change the background? How in the world do I share my screen? Shit, what if I’m called on and my mic doesn’t work – I don’t know how to troubleshoot? Crap, my internet is not stable, what the hell do I do now? Why is my freaking cat screaming at me? Crap what did they say? Do I respond or simply smile and nod? What is she talking about? Can this person just shut-up? SERENITY NOW! Dear heavens is that what I really look like, when did I start looking like my mother?

We are physically and mentally over all of this

Our bodies are looking, no screaming, for relief. Not everyone has a home office that actually resembles the office environment. We are hunched over tables, curled up on couches, sitting on beds, porches/patios – heck, if you’re like me you’re in the bathroom hoping to get a moment of silence or a stronger internet connection. Our bodies are sore, eyes hurt and our vision is blurred. Our new work environment certainly does not look like anything we had before. We aren’t stretching our legs in between meetings and we certainly are not following any regular eating habits.

Our eyes are overworked and strained as a result of all the extra screen time we are enduring. Excessive overuse of our computers, smartphones, and tablets suppresses our naturally produced melatonin; this, in turn, affects our ability to fall asleep and enjoy a very peaceful night’s sleep. Instead, we are going to bed sore, restless and our brains still wired. There are some things we can do to relieve the strain, fatigue, and frustration of online life.

It’s important to remind yourself that you are living in your workspace, and that doesn’t give you a chance to unwind during a commute home. You can’t just leave work behind, because that counter where you are prepping dinner is where you had seven Zoom calls and will need to catch up on emails after the kids are in bed. Work is always present, and so is the stress. Stacia D. Kelly, Ph.D. suggests “create a few rituals to help you step away from the work. If you can, get out for a walk, do something creative (that doesn’t involve the computer screen), and remember to look up from your computer/device every 20 minutes or so.”