Why Your Retail Business Should Be Able To Accept Card Payments
Many new businesses tend to only accept cash as a form of payment
. This could be for several reasons. Perhaps you do not feel the cost of a merchant account is warranted. Alternatively, you may think that transacting in cash is a better alternative; however, it is not without its risks. If it becomes known that your business transacts only in cash then you could become an easy target for thieves. Many banks also levy relatively high cash deposit fees which can add up over time. While there are both pros and cons to transacting with cash or credit cards, perhaps the most important thing to consider is what your customers want.The Convenience of Transacting with Credit Cards
Studies show that credit cards have become the most popular form of payment when making retail purchases. Data reveals that as much as 75 percent of all transactions are paid for using credit cards. One of the primary reasons for this is convenience. Put yourselves into your customers' shoes for a moment and think about transacting with cash or credit cards. A credit card fits easily into your wallet so it is easier to carry around. Most times if the correct security procedures are followed, it is also one of the safer ways to transact. Think about when you are making a large purchase of a few thousand dollars. How comfortable would you feel walking around with that amount of money on you in cash? Yet you can easily make a payment for that same amount on your credit card.
The other convenience about paying with a credit card is that your budget is less limited. Perhaps you are out shopping for a clothing item and in your mind you have a budget of $200. In your purse, you have $200 in cash to purchase the item. After shopping for several hours you finally find the perfect item. The only problem is that it costs $250. Now if you have a credit card, you can easily pay for the item right away. If you can only pay with cash, you will first have to go and find an ATM and make a withdrawal which is inconvenient.
Growing Your Sales by Accepting Card Payments
What many business owners don't understand is that the more convenient it is to shop at your store, the more likely customers are to purchase from you. The most difficult part of making a sale is getting customers to decide to make the purchase. Once they have made that decision, the last thing that you want to do is to put a hurdle in the buying process. If a customer is ready to make payment with their credit card and you tell them you do not accept cards, the chances are pretty good that you will lose the sale. Accepting card payments should not just be because of a negative motivation. There are many ways in which you can boost your sales by simply accepting credit card payments. Think of the example in the previous paragraph. Even though the budget was $200 the customer still bought an item for $250. That is a 25 percent increase in revenue, all because payment could be made on a credit card.
Often customers will be less sensitive about the purchase price when paying on credit card. Many times they will also buy more than one item because they are paying by card. In this way, you can run promotions and specials in your store to attract customers. Often when there is a sale, people will end up spending much more just because there is a perception of getting a bargain. If you can also offer your customers the convenience of paying on credit card, the chances are you'll see your revenue increase substantially.
Improve Your Administration by Accepting Credit Card Payments
Most card processing machines are integrated into all-in-one point-of-sale systems. This means that when you ring up a purchase and process the payment on a credit card, the transaction is automatically added to your bookkeeping files. This makes reconciling sales and stock purchases much easier. When you start to process most of your transactions by credit card, you will see that tallying up your cash register and balancing your books is a much simpler task. It will then simply be a case of balancing the card receipts with your bank balance.
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