Reduce POS Costs While Customers Swipe and Pay
Posted by Resource Nation on January 13, 2014 in POS Systems, Sales 2.0 [ 0 Comments ]
Check the fine print. This isn’t important just for consumers, and those in the small to midsized business sector have reason to look more closely at the costs associated with point-of-sale systems. Retailers across the country – from small-business owners to large corporations – were recently dealt a blow as the U.S. District Court in New York ruled against imposing a limit on swipe fees, or the costs incurred by companies when customers pay for products and services with a credit or debit card.
Related: Using a Mobile POS…The Secure Way
The National Retail Federation is appealing the decision in the Second U.S. District Court of Appeals, but small-business owners need to take the appropriate steps to ensure they’re keeping their operating costs low – especially at the point of transaction – despite card swipe fees. Citing research from Intuit, Entrepreneur explained companies can save upward of 10 percent by using an integrated POS system.
Why You Should Be Paying Attention
According to a Bloomberg report, the major credit card distributors Visa and MasterCard agreed to the $5.7 billion settlement with U.S. merchants, which also ruled out future court action. As you’d likely assume, not all business owners are pleased with the result. FierceRetail indicated these fees cost retailers roughly $30 billion per year – an expense that has risen threefold during the past decade. As a result, nearly 8,000 businesses have rejected the deal, according to a National Retail Federation press release. U.S. District Judge John Gleeson explained in his ruling that this was a win for retailers because they have gained the right to educate the public and consumers about the cost of credit card swipe fees.
Working to Educate Customers
Admittedly, this may seem like a fairly inconsequential win for small-business owners. However, businesses can think about implementing a public awareness campaign in their brick-and-mortar locations and online. It’s likely the majority of consumers aren’t cognizant of the expenses associated with using a credit card to pay for their purchases, so subtly informing regular customers and clients of costs is a simple place to begin. Obviously, this requires quite a bit of tact.
- Don’t turn customers away
Refusing to accept payment from customers who only have a debit or credit card likely won’t win them over or allow them to understand your perspective.
- Appeal for alternate forms of payment
However, asking customers if they would be willing to pay cash for a transaction is an easy way to get the conversation started. At the same time, signage at your point-of-sale location can also engage consumers in the issue.
- Take your case online
Through your company’s homepage or social media channels, there’s a very real opportunity to illustrate to customers how swipe fees can impact the daily operations of a small business. An engaging infographic can provide consumers with a visual and graphic representation of these expenses. Social media content is very shareable, making it easier to reach a wider audience.
Invest in Low-cost, Integrated POS Systems
In addition to educating customers, small-business owners should be looking at the latest POS systems, as they are increasingly affordable. Entrepreneur magazine said typical computer systems that integrate POS software can cost a small-business owner about $1,500. Usually, these include all equipment necessary to handle transactions – bar code scanners, printers and credit card readers. As your needs change, you can often add to these systems, incorporating more equipment.
Yet, one of the true benefits of computer-integrated POS systems is keeping track of inventory, Entrepreneur explained. By maintaining accurate records of all merchandise and transactions, you’ll be in a better position to adhere to your existing budget.
While SMBs currently can’t escape credit and debit card swipe fees, there are a number of strategies they can put into action that will help keep operating costs low.