~ Merchant Credit ~

Higher Sales and It's Not a Lot of Extra Work 

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(About five years ago some processing units sold for $1800-$2400; one type is called a P.O.S unit, for Point- Of-Sale.) It takes the place of the imprinter, cell-phone and the Tranz or other type modem, and can be used on-the-spot for charge card authorizations.  Since they are used more commonly now, the price is considerably less.

Old Technology:  I had a simple Tranz 330, which didn't have a printer; it plugs into a modular phone jack in the wall, and needs an electrical connection.  About 15 yrs ago I used a pressure imprinter and a cell phone at shows.  Sales were written up at shows, getting authorization for just the higher sales (sales were guaranteed that were under the floor limit - less than $75).  I only got authorization for sales over $75 and I keyed in the rest when I return home. I was comfortable doing it this way, but floor limits disappeared several years ago.  Few (if any) companies provide a guaranty or floor limits today.  Now it's all our responsibility.

P.O.S. units also have a built-in printer: a nice feature at a busy show; this same unit automatically dials out on satellite signals to get a authorization.  There are a wide range of options and you can make choices to suit any budget or need, but no matter which unit you get , make sure you also have a simple pressure imprinter (knuckle-buster) at every show, just in case the high-tech unit's battery ran down!   (Keep it out of sight!  If a scam artist decides you don't have access to immediate authorization for a sale, you may become a target for his theft.  He'll 'charge' items, 'pay' for it with his phone credit card, and know that you can't get authorization until you're back home and he's long gone!)

Since I don't leave the office, I use a virtual terminal on my computer.  This is where I enter mail Order/Telephone Order (MOTO) information to process charges, but I've kept my account with the Tranz unit open, just in case I don't have internet access for some reason.  If I were doing shows now I would use a POS unit.

What has been your experience with merchant credit?  Does offering to take charge cards really increase sales substantially?

Yes, it does increase sales. Most merchant credit companies claim the increase is usually 20-40%, I found that my increase was somewhat higher, probably because I’m a silversmith. What lady can resist looking at jewelry for herself when she shops for a gift? I often sold several pieces to customers who charged their purchases, and walked away without buying the gifts for which they’d budgeted, and for which they had cash or money in their checking accounts. By using plastic, their purchases were off-budget for the moment. Impulse sales account for much of the credit card business; -it’s a good way to increase your gross sales. It’s a tool, like any on your workbench. If you’re serious about your business, you need good tools.

No. It’s not a giant increase at all, but the sales must processed through the imprinter, and then through the modem at home, or transmitted through a P.O.S. unit. If you’re nervous about not getting an authorization on-site for the charge, it’s worth getting the P.O.S.  model that works on satellite signals to have immediate authorization. The bank mails you notification of funds deposited to your account, and the credit card company also sends notification of the same sales. At the end of the month you match up the credit company’s notifications, and your bank statement.

My paper charge slips are separated and filed in chronological order, according to month.  I use an expanding check-file because it's the perfect size, and set it in a drawer.  When I open the drawer, the file is open, and I pop the transactions into the proper opening.

I also list names and sale amounts in a steno book as a cross-check, by date, noting whether they used Visa or MC, or AMEX, etc.  When I reconcile my business account, I have the transactions listed in the steno pad, with the end-of-day totals, and balance my account as I do my checks.

  Since I pay a different discount rate for AMEX transactions, it makes life easier because they are marked in the book so I know which discount rate to use for each sale.  My American Express (AMEX) transactions are processed separately, so the steno pad list is a blessing when reconciling. It’s all one process -not a lot of work, but there are procedures to follow.   

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 copyright 1998, 1999, 2007 Betty Chypre