The most important thing you can do to close sales opportunities at your business is to make it easy for potential customers to purchase your offered goods or services. One way to grease the skids and convert shoppers to cha-ching, is to allow them to use plastic.
If you are not currently accepting credit cards, then you need to ask yourself why. Are you worried about the fees involved taking a bite out of your profits? Maybe you are fearful to venture into unfamiliar territory. Does the thought of setting up a merchant account (necessary to accept plastic) make you want to run with your proverbial tail between your legs? Is having a root canal preferable to completing this somewhat confusing process? Whatever the reason, you need to put your fears aside and take the plunge into accepting credit cards to maximize sales.
Accepting credit will increase your sales for several reasons. First off, paying by credit is the preferred method of payment of today’s consumers. It is necessary that your business is tailor made to meet your customer’s payment choice. If yours is not, you can bet your sweet patootie that your competitors are silently waiting in the wings ready to pounce! Do you run an on-line business? If the answer is “yes”, then accepting credit is even more critical as 88% of Internet shoppers use credit for on-line purchases.
By doing your homework, you may be surprised to discover that the additional sales you gain by accepting plastic will far outweigh the fees involved in setting up a merchant account. There are virtually hundreds to choose from so take the time to compare setup charges, equipment expenses, discount and transaction fees, etc.
You will also find that the charges you will pay and services provided will depend on the way you plan to accept plastic, your monthly sales, your business profile and the provider you select. Make certain to choose a merchant account provider wisely as an informed choice will save you a boatload of money down the road.
Why YOU should take Credit Card Payments
First and foremost, accepting plastic (such as bank cards, ATM cards and credit cards) can increase your sales a whopping 20% - some estimate as high as 400%! It will also give your business an aura of professionalism. Your business must be current and in step with the times. If it appears outdated, you may relinquish any advantage you have over your competitors even if your goods or services are superior!
By accepting credit cards, you are giving your customers a choice regarding their payment options. This will build confidence in your establishment and lead to repeat sales. It has also been shown that those who use credit cards make more frequent purchases than those who pay in cash. Even the amount in a given credit card transaction tends to be larger than if cash is the coin of currency as it is more difficult for people to part with Benjamin Franklin and his Presidential counterparts than to sign a receipt or punch in their credit card information.
Accepting plastic also ensures your customer’s ability to pay. It takes only seconds to verify if funds are available and the money is deposited in your account within 2-3 business days.
Another exciting benefit – the world becomes your oyster, as you would now have the ability to accept purchases from all four corners of the globe! This could potentially increase your profits 10 fold.
Chargebacks & Fraud: Sidetrack a Major Pitfall
Although accepting plastic can significantly increase your sales, it is not without its pitfalls. One of the most significant disadvantages is chargebacks or disputes initiated by a customer with their card-issuing bank.
While some chargebacks would be beyond your control, it is important to take certain precautions to try to reduce their frequency (e.g., verify the authenticity of purchases when possible, exercise caution with certain International orders, have a liberal return policy, etc.). Even if chargebacks arise, you can still win and retain the funds of the sale if you complied with the credit card associations’ established criteria. (Business owners are still liable for associated chargeback fees, generally about $25 in the merchant account field.)
Of course, accepting credit cards can also open Pandora’s Box of fraudulent transactions. Again, it is imperative for you to exercise fraud preventative measures such as matching the customer’s billing address with the address listed on the cardholder’s account and verifying codes on the card, ensuring that the customer is actually the same person as the cardholder.
The best defense against credit card fraud and chargebacks is to be aware of the latest credit card scams as well as knowing all the details concerning credit card purchases. Before choosing a particular merchant account provider (MAP) and acquiring bank, know what security measures they have in place, attached penalties, if any, and recourse available if credit card fraud were to take place.
Despite the associated risks of accepting credit cards, you can ill-afford to have a policy of non-acceptance. Obtaining credit card processing capability maximizes your profitability, eliminates potential lost sales, enhances your business’s credibility and professionalism, and broadcasts to the world that your business is open for business!