Using Credit to Increase Sales
Many small business owners start out by only using cash or checks from their customers to pay for the merchandise that they have bought. This is a good way to start your business but when you find that you are missing out on sales then it is time that you start letting your customers use their charge cards. The use of a charge card has proven to increase your sales many times over making your profits grow even more. The problem in using charge cards is the cost it becomes to the merchants who put the terminal in their business.
The cost behind using charge cards
You are now wondering if you should consider letting your customers use their charge cards and will it be cost effective or will your business suffer. You should check out the different merchant card companies and select the company that will give you the best deal. You need to make sure there are no hidden costs and that you can control the amount of sales that you are going to be charged. Charge card merchants normally will charge you a monthly fee that covers the price of the equipment. You should make sure that you are actually buying the equipment not leasing it because you will always be stuck with the monthly fee if you are leasing. Next you should make sure that you are being charged for overall sales for the month instead of per customer sales. When you find that you are being charged per customer sales find out how much you are paying per customer. A customer who puts a three dollar item on their card that will cost you five dollars for the sale is costing you. You can control this by requiring that a customer who uses the charge card must spend at least ten dollars.
Customer Care when permitting charges
You do need to make sure that you use great customer care when you start to use the charge card method. You do not want to lose your regular customers because of not permitting them to charge a very in expensive item. Sometimes you may have to bend your rule a bit and let a small purchase pass. In order to prevent having to put a minimum amount on all charges it is best to ask the merchant card processor to put a charge on you based on the total monthly charges rather than by customer usage. In this manner you will not have to post a minimum balance requirement and you are able to accept all purchases with a smile. You should make sure that you do identify your customers with a picture ID in order to prevent a fraudulent purchase from a stolen credit card. Great customer service requires even greater customer care when it comes to using charge cards instead of cash.
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